- Basic conditions
- Market structure
- The strategies
- Government Policy
- Performance and policy
The Cultural Revolution launched by Mao Zedong in 1966 had disastrous consequences: the country's economy was badly conducted, the country was repeatedly on the brink of civil war, and the historical and cultural heritage of the country decreased substantially.
With the death of Mao Zedong and the rise to power of Deng Xiaoping, a new era began in China: the Socialist Market Economy (cohabitation between economic liberalism and political authoritarianism). This policy has enabled the country to gradually open up to others, especially economically. It became one of the largest reserves of manpower in the 1980s, and one of the largest manufacturers of textiles. It keeps prices low by a large and cheap workforce, from which comes the nickname 'The workshop of the world'.
Economic openness is also marked with the birth of SEZs (Special Economic Zone) which offer very attractive conditions for multinationals. However, these firms, in case of relocation, are forced to leave their technology in place.
The real integration of China into the global economy comes upon its entry into the WTO, on January 1st, 2002. Currently, China is the second largest economy in the world behind the United States. Some even say that in 2015, it will become the largest world power.
China has been, for the past 20 centuries, the greatest civilization of the world. It began to decline during the first industrial revolution. In the early nineteenth century, China accounted for 30% of the global GDP.
But, at this time China began to experience economic stagnation and a high population growth. Moreover, Western powers were suspicious of China.
Tags: Chinese Cultural Revolution, Chinese leadership, China's global position