The paper "China and Soviet Union Economic Reforms Compared" is a perfect example of a macro and microeconomic case study. Reforms in China kicked off towards the end of 1978 following government decentralization of economic decision-making. Before 1978 regional as well as local levels were allowed to control and share revenue. However, by 1978 communism had totally failed and there were enough reasons for the government to seriously embark on the reform process. At this point in time, there was a general feeling that reforms were needed in China. The transition of China from central planning to a market economy has been gradual and is not yet over.
Analysts refer to the strategy used by China as a “ dual-track approach” : this is where a market orientation is allowed to grow along with a centrally planned economy (Huang, 2012). China embarked on a series of reforms as discussed below; Agricultural Reform Agricultural reforms were the first to be undertaken. Attention to the agricultural sector was key at this time given that it had stagnated from the time when the Communist Party ascended to power and there were periodic food shortages.
The key policy that was developed at this time was referred to as the “ household responsibility system. ” This system was designed such that communal farming was abolished by giving individual households responsibility for particular plots of land. This was an experimental system where communal land was subdivided and given individual families who were then given targets to meet. Massive farming improvement was observed as individual families not only fulfilled a part of their pledge to the government but also exceeded their quota. The families could dispose of the surplus in whatever way they wanted, but they had no right to dispose of the land itself since they were given contracts over the land (Li, 2012). Owing to the observed results, this practice in due course spread.
This system was noticed and with time the leaders began to see that agricultural output was going up. Given the pragmatic mood and interest in doing what worked, the authorities might have opted to take no notice of it, but the Communist Party started to formally recommend the household responsibility system in early 1982.
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