Question

State any three major differences between the economic policies followed by China before and after 1970.

Hint:

Use keywords like 'Soviet Model', 'Open Door Policy (1978)', and 'Special Economic Zones (SEZs)' to clearly distinguish between the two eras of Chinese economic history.

Answer 1

Step 1: Understanding the Question:
The question asks for a comparison of China's economic strategies during its orthodox communist phase (Mao era) versus its reformist phase (post-1978, under Deng Xiaoping), which is broadly categorized as before and after the 1970s.
Step 3: Detailed Explanation:
1. Command Economy vs. Market Socialism: Before the 1970s, China followed a strict Soviet-style command economy where the state owned all resources, and heavy industries were centrally planned.
After the 1970s, China introduced "market socialism," allowing market forces, private enterprise, and profit motives to operate alongside state control.
2. Isolation vs. Open Door Policy: Prior to the reforms, China's economy was highly isolated from the global market, relying heavily on self-reliance and minimal foreign trade.
In 1978, China adopted the 'Open Door Policy', actively inviting Foreign Direct Investment (FDI), integrating into the global economy, and creating Special Economic Zones (SEZs).
3. Agricultural Collectivization vs. Privatization: Under Mao, agriculture was strictly collectivized into large communes where peasants worked for the state.
After the 1970s, agriculture was the first sector to be reformed; communes were dismantled, and land was leased to individual households, which dramatically increased agricultural production and rural incomes.
Step 4: Final Answer:
The major differences revolve around the shift from a closed, state-controlled command economy with collectivized agriculture to an open, market-oriented economy with privatized farming and foreign investment.