2 shows the per capita annual incomes of urban households in municipalities and provinces where incomes are relatively high, and those of peasant households in relatively poor provinces.
The result was a huge wealth disparity between coastal and inland regions, and between the cities and rural areas. With the shift to the open-door policy, however, Deng Xiaoping indicated that it was acceptable for some regions to become wealthy before others. The idea, taken from the writings of Mencius, that inequality is more lamentable than poverty, has applied throughout society. Under the socialist controlled economy, living standards were relatively low, but there was no big gap between rich and poor. The problems outlined below are closely linked to the living standards of people in China.įirst, there is now regional disparities in income levels, and the gap between rich and poor is now extremely wide. Naturally, there have also been negative effects, and these have become increasingly obvious over the years. The positive consequences of the reform and open-door policy have been economic development and rising national incomes. Therefore, it seems reasonable to conclude that Deng Xiaoping's first goal, which was to improve the economic status of the people, has been accomplished. In 1998, per capita income, though still only about US$770, was 14 times higher than in 1980. Rapid economic growth was accompanied by a rise in per capita GDP (Fig. The economy stagnated around the time of the Tiananmen Square Incident in 1989, but in the first half of the 1990s, China was again boasting high growth rates. The shift to an open-door economic policy ushered in a period of high economic growth in the first half of the 1980s. Inflows of foreign capital, technology, and management knowhow enabled China to turn its vast labor resources and space to rapid economic growth. The changes brought an entrepreneurial boom that resulted in the emergence of huge numbers of entrepreneurs and venture businesses within China. At the same time, China promoted its socialist market economy concept. The establishment of these zones provided the trigger for massive inflows of foreign investment, primarily from companies in Hong Kong and Taiwan. The government subsequently established a number of areas for foreign investment, including the special economic zones, open coastal cities, the economic and technology development zones, the delta open zones, the peninsula open zones, the open border citiees, and the high-tech industry development zones.
The policy shift also appears to have been prompted by recognition that the incomes of ordinary Chinese were so low, in comparison with incomes in other Asian economies, that the future of the Chinese state and the communist regime would be in jeopardy unless something was done to raise living standards of its people through economic growth.
The obvious aim of this policy shift was to rebuild its economy and society that were devastated by the Cultural Revolution. Under the leadership of Deng Xiaoping, who had returned to the political arena after his three previous defeats, the Chinese government began to pursue an open-door policy, in which it adopted a stance to achieve economic growth through the active introduction of foreign capital and technology while maintaining its commitment to socialism. The reform and open-door policy of China began with the adoption of a new economic development strategy at the Third Plenary Session of the 11th Central Committee of the Chinese Communist Party (CCPCC) in late 1978. The Chinese Economy since the Start of the Reform and Open-door Policy Shigeo Kobayashi, Jia Baobo and Junya Sanoġ.
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