Explain the factors responsible for accelerated growth in China.

Factors responsible for accelerated growth in China:

1. Government control : People’s Republic of China was established in 1949 under one party rule. All the critical sectors of the economy, land and enterprises owned and operated by individuals were brought under government control. There was monopoly of government. The government of China undertook many measures to develop the country.

2. Great Leap Forward (GLF) : This campaign was initiated in 1959 to industrialise the country on a massive scale. People were encouraged to set up industries in their backyards. Communes were started in rural areas. Under commune system, land was collectively cultivated. In 1958, there were 26,000 communes covering almost all farmers.

3. Great Proletarian Cultural Revolution (1966-76) : In 1965, Mao introduced the Great Proletarian Cultural Revolution. Under this revolution, students and professionals were sent to work and learn from the countryside.

4. Economic Reforms in 1978 : China introduced many economic reforms in 1978. These reforms resulted in fast economic growth. These reforms were introduced in phases.

In the initial phase, reforms were initiated in agriculture, foreign trade and investment sector. In agriculture, commune lands were divided in to small plots which were allocated to individual households for use and not for

ownership. They were allowed to keep all income from the land after paying stipulated taxes.

In the later phase, reforms were initiated in the industrial sector. Private sector firms, in general and township and village enterprises i.e. those enterprises which were owned and operated by local authorities, in particular, were allowed to produce good.

At this stage, enterprises owned by the government were made to face competition.

The reform process also involved dual pricing.