Then and Now China

China’s Economy has been booming dating back to 1978 despite it being a communist state. China businesses were ran under the theory of a planned economy is communism prior to the 1930s. The theory suggests all property is shared equally by the people under a strong government. The economic system has no private ownership instead they are classified as public owners. The government decides what businesses can purchase and sell and how much they can stock, supply, and trade. In the late 1930s, China moved into the market socialism. Market socialism is the practice that a political philosophy advocating substantial public involvement through government ownership in the means of production and distribution. (Hill, 46)

In 1978, China started an economic reform. Late 1970s to the early 1980s trades were opened to the outside world. The agriculture divisions was now run under the contract responsibilities system. Contract responsibilities system is also known as household responsibility system gave farmers quotas for production. When the farmer met the quota they received compensation. In the 1980s these quotas were reduced. The reduction of the quotas permitted the farmers to increase the products to be sold in the free market. As a result of the farmers being able to sell the products new found income was introduced which in turn increased the standard of living. The growth sparked the desire to have more so the people were purchasing things they may never have had under the old economic system. The economy starting growing bringing the sales of products to a level that was beyond their expectations.

Between the times of 1989-1991, a series of democratic revolutions swept the Communist world. (Hill, 24) Times were changing and the nations began embracing the free market economics and changing their communist ways to more democratic. China moved quickly into the free market reform in attempts to grow the GDP into the world leader in international...