Brief review of the Chinese economic system
To describe the economy of China we start with the pre‐reform period, before 1979, that was under the plan of the central government. The central government controlled more than 90 percent of trade by monopolizing the imports and exports of over 3,000 kinds of commodities[1]. By 1979, China has been engaged in an effort to reform its economy. The Chinese leadership has adopted a pragmatic perspective on many political and socioeconomic problems, and has sharply reduced the role of ideology in economic policy. Consumer welfare, economic productivity, and political stability are considered indivisible. The government has emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government has also focused on foreign trade as a major vehicle for economic growth. While in pre‐reform China, the imports were mainly controlled through high tariffs. Considering Kanbur and Zhang (2005), in the pre‐reform period, we get four sub‐periods:
1. Revolution and Land reform (1949‐1956).
2. The Great Leap Forward and the Great Famine (1957‐1961), that is, “between the spring of 1959 and the end of 1961 some 30 million Chinese started to death and about the same number of births were lost or postponed”. According to Smil (1999), the origins of the Famine can be traced to Mao Zedong's decision, supported by the leadership of China's communist party, to launch the Great Leap Forward. Mao, beholden to Stalinist ideology that stressed the key role of heavy industry, made steel production the centerpiece of this deluded effort. Instead of working in the fields.
3. The post Famine recovery (1961‐1965).
4. Cultural revolution and transitional reform (1966‐1978). Maoism developed a critique of the Soviet model as “revisionist” and articulating a separate model he deemed more suited to China, which depended more on human willpower, called “unbalanced development,” and on political mobilization (1966‐1969). China found itself in international isolation, on terms of enmity with both superpowers, and driven even further into the need for self‐reliant economic development. Mao died in 1976, and then Deng Xiaoping acquired the leading role in Chinese politics in 1978. Chinese communism under Deng could no longer be called totalitarian, because it substantially relaxed political mobilization and gave citizens more individual freedom, and to some extent limited the exercise of power and made it more predictable. But still, it was not a democratic regime because of the monopoly of power in the hands of a single political party, indeed, in the hands of a few top leaders.