Chapter 19, Problem 25AA

To determine

To explain: The lesson that can be learnt by other developing nations from China.

Explanation of Solution

China is one of the fastest-growing economies in the world. Once China was also slow in its development but with time it introduced many reforms which helped its economy grow.

The economic system of China has progressed a lot after the Second World War. This happened due to the start of five-year plans in 1953 by the Chinese Communist government. This was a centralized planning system that transformed the regional planning system to a limited free enterprise.

Further, in 1957, decision-making powers were provided to the local governments. In 1978, reforms were made by leaders to motivate people to work harder. Many new authorities were given to people like individuals who can rent their land for up to 15 years and the house of a peasant can become responsible for their own land. This caused a dramatic increase in farming productivity.

In the 2000s, rural residents moved to cities and started working in factories and offices. Many foreign companies invested in new ventures of China and the economic growth increased. China has made itself a mixed economy and has an open market system. The other developing nations can learn from China as to how with the introduction of reforms and policies, a country can change its economy.