AG china questions - and importing high technology products...

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Jennifer Dinan 12/8/06 AG week 16 1. China maintained a centrally planned economy prior to 1979. A large share of the country's economic output was directed and controlled by the state, which set production goals, controlled prices, and allocated resources throughout most of the economy. Foreign trade was generally limited to obtaining only those goods that could not be made or obtained in China. There were few profit incentives for firms and farmers, competition was virtually nonexistent, and price and production controls caused widespread distortions in the economy. Chinese living standards were substantially lower than those of many other developing countries. 2. The economic reforms started by the central government initiating price and ownership incentives for farmers, which enabled them to sell a portion of their crops on the free market. The government also established four special economic zones for the purpose of attracting foreign investment, boosting exports,
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Unformatted text preview: and importing high technology products into China. Coastal regions and cities were allowed to experiment with free market reforms and offer tax and trade incentives to attract foreign investment. State price controls on a wide range of products were gradually eliminated. 3. China's economy has grown substantially faster since the economic reform. China has become one the world's fastest growing economies. China's rapid development has raised nearly 200 million people out of extreme poverty. 4. Chinas two main causes of economic growth were large-scale capital investment and rapid productivity growth. Large-scale capital investment was financed by large domestic savings and foreign investment. China's trade and investment reforms and incentives led to a surge in foreign direct investment (FDI), which has been a major source of China's capital growth. Productivity gains came from an increase in the efficiency in which inputs were used....
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This note was uploaded on 04/18/2008 for the course AG 201 taught by Professor Dillivan during the Spring '08 term at Southeast Missori State University.

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