Here presents you major economic events of the past 60 years that shed light on China's economic miracle.
In the years between the foundation of the People's Republic of China and 1956, the economic system changed from a mixed economy with a dominant public sector into a highly centralized planned economy.
The Soviet model was once adopted in China in the 1950s, and agriculture, handicrafts, capitalist industry and commerce were mobilized for the task of high-speed industrial development. The system of central planning initially restored the health of the national economy and promoted industrialization, but its disadvantages were increasingly exposed as industrial productivity lagged. The system also failed to provide incentives to farmers, which resulted in a long-term relative decline of agriculture.
Following the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China (CPC) in 1978, different forms of economic organization were allowed develop side by side. Since then, China has adopted the reform and opening-up policy. The planned economy was transformed into a system in which plan and market co-existed. In rural areas, the household contract responsibility system and the encouragement of rural industry gave a powerful impetus to development. In the cities, diverse forms of ownership were permitted, companies were restructured, and the management model transformed to separate government functions from enterprise management. These measures increased the freedom of individual enterprises to take initiatives and injected dynamism into the economy.
From the 1990s, the economic system shifted again in the direction of a socialist market economy. Enterprises were pushed to undertake market reforms. The Shanghai and Shenzhen Stock Exchanges were established and state-owned enterprises were transformed into joint-stock companies. In 1999, the Second Session of the Ninth National People Congress (NPC) acknowledged the private sector as a major component of the socialist market economy.
Since the turn of the century, a series of significant events have further boosted economic progress. China joined the WTO; the legal status of private property was formally recognized; the ancient agricultural tax that had burdened farmers for thousands of years was abolished, and the mechanism for managing the exchange rate of the yuan was reformed.
The effects of the global economic crisis that started in 2008 are still being felt worldwide. But the perception of China as a major economic power that has acted responsibly in the crisis has enhanced its image overseas. Other countries are increasingly willing to look to China for lessons on how to find a way out of the crisis, and on broader issues of economic management.
(China.org.cn by Zhou Jing, September 17, 2009)