China Economic Growth Flashcards
(138 cards)
1
Q
In what year did the PRC get established by Mao
A
1949
2
Q
What was the broad theme of 1978-1982
A
Readjustment
3
Q
What was the broad theme of 1982-89 (hint its to do with the beginning of an ideology)
A
Beginning of market socialism
4
Q
What was the broad theme of 1989 to 1991
A
Rectification (Tiananmen and macro contraction)
5
Q
What was the broad theme of 1991-1996 (hint its relevant to the ideology set out from 1982 to 1989)
A
Completion of the market socialism project
6
Q
From which year to which year did Deng Xiao ping lead
A
1979 to 1997
7
Q
Who was Hu Yao bang
A
General secretary of ccp in 1980s, inaugurated reforms
8
Q
What are economic indicators for Chinese economic transformation (3)
A
- growth rates (GDP)
- increased labour productivity
- promotion of free trade
9
Q
What was the nature of economic growth in China in the pre-reform period of 1954-77 (volatile or steady), what did growth figures range from
A
Volatile, ranged form 20% to -20%
10
Q
What was the average growth rate of GDP from 1978 onwards
A
9.2%
11
Q
What was the GDP growth rate in the 1990s
A
12.1%
12
Q
Which sector (secondary or primary) was the primary driver of productive growth
A
Secondary
13
Q
By what multiple did Chinese exports increase from 1978 to 1995
A
14x
14
Q
What are the factors (domestic - 4) that caused the economic transformation of china
A
Domestic:
1. Problems of the Maoist economy
2. State intervention
3. Market oriented reforms
4. Open door policy
15
Q
What were the 2 ways in which the Maoist industrial sector was weak
A
- Too small to supply the producer and consumer goods needed for the world and its own population
- Industry was inefficient
16
Q
What were the 4 features of Maoism (and each’s brief details)
A
- Peasants as a source of revolution
- People’s war - strength of the struggle of the vast majority of people vs the exploiting class (industrial rural divide)
- New democracy
- Continuous class struggle - against bourgeois ideology, traditional cultural values and social roots
17
Q
What was mao’s new democracy opposed to (2)
A
- Old democracy of the west
- Soviet style dictatorship
18
Q
What were the 3 factors (one domestic one external) that led to the stifling of economic growth in china during the Mao era
A
- Isolation from international trade
- Autarchic tendencies of Beijing
- US trade embargo
19
Q
Which area was Chinese industrial production spent on, instead of civilian purposes
A
Military
20
Q
What were the 4 limitations of china’s state ownership and central planning
A
- Profit rates decreased due to absence of competition
- FDI non existent
- Incorrect view that granting SOE factory directors more autonomy would lead to improved performance
- Scale of production too small to allow effective exploitation of EOS
21
Q
When did the Great Leap Forward occur
A
1958
22
Q
What was the Great Leap Forward (process, production focus, implementation and methods etc) - in general
A
- Rural area organised in large scale rural communities
- Targets were grain and steel production
- Labour intensive methods — emphasise manpower rather than machines
- Hoped that it could bypass the slower process of industrialisation
23
Q
What were the 2 areas/measures for the agricultural sector during the Great Leap Forward
A
- Private glow farming was abolished
- Large scale irrigation projects
24
Q
Why did the agricultural sector fail during the Great Leap Forward (stratagems, government propaganda)
A
Large scale irrigation projects lacked input from trained engineers, experimental
-> led to decreasing crop yields from failed experiments and improperly constructed water projects
-> nationwide campaign to exterminate sparrows — massive locust swarms
-> unreasonable quotas
Government controlled media reported great increases in grain production (untrue)
— food shortages, famine
25
Why did industrialisation fail together with agriculture
- existing metal equipment, tools, and household goods confiscated and melted down to fuel extra production
- surplus labourers (millions) moved from farms to steel making, leaving Agri sector for women, children and older adults - additional strain on food distribution sector
- collective farms falsified harvest figures
26
What was the impact of the Great Leap Forward
- 3 bitter years
- massive quantities of capital goods and raw materials consumed in projects that yielded no additional output of final goods
- huge wage bill, no corresponding increase in production
27
How many milllion Chinese died during the period of the Great Leap Forward before the country began to recover
30 mil
28
When did the cultural revolution occur
1966-76
29
What was the main objective for the cultural revolution
- preserve Chinese communism - purging remnants of capitalist and traditional elements from Chinese society
30
What were the 4 goals of the cultural revolution
1. Replace designated successors with leaders more faithful to Mao’s current thinking
2. Rectify the Chinese communist party
3. Provide Chinese youths with some form of revolutionary experience
4. Policy changes to make the educational, healthcare and cultural systems less elitist
31
What were the revolutionary groups during the cultural revolution called, and what were their purpose (and who did they comprise of)
Red guards
- youth
- root out those who weren’t “sufficiently revolutionary” and those suspected of being “bourgeois”
32
What was the negative impact of the red guards
- little oversight, led to anarchy and terror as those who weren’t suspect were persecuted and killed
33
How many people died from torture during the cultural revolution
0.5 - 2 mil
34
What were the 2 negative impacts of the cultural revolution
1. Loss of intellect and lives - traditionalists, educators, intellectuals persecuted and killed
2. Economic damage - urban areas suffered as workers spent their time in political struggle instead of working
35
What was the end effect of the cultural revolution
Opposite effect from intended - led to china embracing capitalism
36
What was the response to pressures for economic reform in 1977-78
- realisation of agricultural bottleneck, focus on mechanisation of the agricultural industry
- first response not to engage in economic reform, but build back the planned economy
37
At what event in which year did Deng lay out the basis for china’s future post-Mao (and what year)
3rd plenum of the 11th central committee, Dec 1978
38
What was deng’s programme/idoelogy termed as
Socialism with Chinese characteristics
39
What was the deficit (in billions of yuan) when Deng took over
6.5 billion
40
How many Chinese were unemployed when Deng took over
20 million
41
Who announced the 4 modernisations (and in which year) and who championed it
Zhou enlai, 1963
Championed by Deng Xiaoping, 1978
42
What areas did the 4 modernisations focus on
1. Agriculture
2. Industry
3. National defense
4. Science and technology
43
How was agriculture gong to be strengthened by the 4 modernisations
- increased agricultural productivity through new farming methods an technologies
44
How was industry planned to be strengthened by the 4 modernisations
- shift in focus from heavy industry to light industry and consumer goods - stimulate economic growth and raise living standards
45
How was national defence planned to e strengthened with the 4 modernisations (hint, consider Cold War context)
Modernise military and enhance defense capabilities
- importance of nuclear power recognised vs manpower war, development of its own ICBMs
46
How was science and technology planned to be strengthened by the 4 modernisations
- training and research programme for priority areas - energy production, computers, optics, space, tech, physics, genetics
47
How did socialism with Chinese characteristics integrate capitalism in its economic reforms
- opening up of china to foreign investment
- encouraging private entrepreneurship
- experimenting with market oriented policies in certain sectors
48
How was communism and socialism still protected under deng’s socialism with Chinese characteristics (consider state ownership)
- communist party retained monopoly on political power, key sectors such as banking, energy, telecommunications remained under state control
49
What were the nature of deng’s reforms throughout 1980-90s (quick or incremental)
Incremental
50
From 1950 to when did china’s banking sector only consist of one bank
1978
51
What was the people’s bank of china originally under (up till 1978)
Ministry of finance
52
When did the PBOC become separate from the ministry of finance
1979
53
What were the 3 state owned commercial banks that took over the banking sector from 1979, what were their separate purposes
1. BOC - manage foreign investment and trade
2. People’s construction bank of china (PCBC) - manage transactions related to fixed investments (manufacturing)
3. ABC - agriculture bank of china - manage all banking services in rural areas
54
What bank was formed in 1984 that took over operations from the PBOC
ICBC - industrial and commercial bank of china
55
Where were the special economic zones located inn china (which regions)
Coastal regions
56
How was credit managed in the rural and urban areas (under what network name)
Credit cooperatives; rural (RCC) and urban (UCC)
57
What were the non-bank financial intermediaries that emerged (and their abbreviation)
Trust and investment corporations (TICs)
58
What was the most significant event for the growth of the Chinese financial system inn the 1990s
Inception and growth of the Chinese stock market
59
What were the 2 stock exchanges established in 1990
SHSE (shanghai) and SZSE (shenzhen)
60
How did china’s old baking and credit system function vs the new one
Old: lending controlled by credit quotas determined by Beijing and disaggregated to local banks, little incentives
New: each local bank now treated as its own economic entity, loan able funds determined by bank’s own deposits
61
What announcement was made by teh central bank in 1984 with regards to the definition of local bank assets and liabilities, what impact did it have
Local bank assets and liabilities now based on the loans and deposits each bank had
- greater incentive to expand lending as outstanding loans would be counted as assets
62
How many years was higher education shutdown during the cultural revolution
6 years
63
What was the law created regarding education (and when) and what was its purpose
Education law, 1995: government commitmen too equality of educational opportunity regardless of nationality, race etc.
64
What was the name of the action plan created for education (and in what year) and what was its primary objective
1999 action plan for revitalising education: implementing compulsory education across the country
65
What are the 3 aspects of education that were improved under Deng
1. Upgrading of teacher’s skills
2. Overseas study
3. Access to education
66
What was the increase in inflation from 1979 to 1980 (% to %)
2% to 6%
67
What did the government do in 1981 to combat inflation (2)
1. Stopped borrowing from central bank, drastically reduced spending on enterprise investments
2. Forced purchase of government bonds to finance debt (instead of borrowing from overseas)
68
How much was the government budget deficit cut by in 1981
2/3
69
What was the change in inflation from 1980 to 1981 (% to %)
6% to 2.4%
70
From what percent to what percent did inflation rise by from 1981-83 to 1985
2% average to 8.8%
71
What did the government do to combat inflation in 1985 (4)
- slashed government expenditure
- raised interest rates
- enforced stricter credit controls
- restrictions on investments
72
What was the rate of inflation in 1987 and 1988
9%, 27%
73
How did the government respond to the high inflation in 1988 (4)
- tightened credit control
- raised interest rates
- drastic cutbacks in investment
- re-imposed price controls
74
We’re the measures take in 1988 to combat inflation effective? What was the inflation rate in 1990
Yes in the short term, 0.6% in 1990
75
What was the rate of inflation in 1994
24%
76
What were the measures taken by the government to reduce inflation in 1994 (2)
- Credit expansion reduced
- investment curtailed
77
Were the measures taken in 1994 to control inflation effective?
Yes
78
From what percent to what percent did the rate of consumer price increase fall from 1994 to 1995, was growth affected
24.1% to 17.1%
Growth affected, but only slightly
79
When did Deng conduct his southern tour, and was he still in power
1992, retired from all political positions
80
What did Deng advocate during his southern tour
Greater economic liberalisation and foreign investment
81
How was the southern tour received, and by whom
- Chinese people, foreign investors
- met with enthusiasm
82
What was the impact of deng’s southern tour (policies, successor, china’s overall economic direction)
- Increased support for Deng and his market oriented policies
- aided reformist allies’ climb to power (Zhu Rong Ji)
- permanently changed the course of Chinese direction towards economic development
83
When did the CCP formally adopt deng’s concept of a socialist market economy, during what event
1992, 14th congress
84
When did china become a part of the WTO
2001
85
What was the meaning of “household responsibility” in the Agri sector, when was it implemented
1978, farmers had control over decision making on planting and cultivation, once set quota was met the farmers could sell/use the rest
- incentivised increased production
86
By which year was the “household responsibility reform” fully implemented and adopted
1984
87
In the 1989s, by how much (on average) did agricultural production rise by
9%
88
By how much did total grain production rise by from 1978 to 1984
33.6%
89
How did the success of the agricultural reforms from 1978 impact the economy
- accelerated economic growth (as a key component of national output)
- provided powerful support for reform in the non-agricultural economy
90
What were the 5 types of market oriented reforms carried out during deng’s time in power
1. Introduction of household responsibility in agriculture
2. Creation of dual-track system reforms for state owned enterprises
3. Creation of township and village enterprises (TVEs)
4. Development of private enterprises
5. Wage reforms
91
What was ther target of Deng’s dual track SOE reforms
Reform poorly managed, inefficient SOEs
92
What were the 3 stages of economic reform for SOEs, what years did they take place, what did each stage do
1st stage: management reform (1978-84) - give management greater autonomy, allowed to keep excess production as profits to reinvest
2nd stage: dual track system (1984-92) - allowed to sell excess outside of state plan 20% higher than state price
- allowed to fire and hire staff, offer bonuses, and establish links with suppliers
3rd stage: ownership reform (post 1992)
- allowed underperforming SOEs to be leased or sold to the public
93
What are TVEs (and characteristics)
- under purview of government
- collectively owned by local residents in rural areas or owned/controlled by peasants
- small in size
- high degree of autonomy
- more outward oriented than SOE’s
- subject to harsh budget constraints
94
How much of total industrial output was comprised off by industrial value added from TVEs
47%
95
How many firms in foreign countries have township enterprises opened by which year
400 firms, by 1994
96
In 1999, how much of total exports were accounted for by TVE exports
50%
97
What percentage of total labor force was comprised off by TVEs in 1994
18%
98
What was the predecessor to TVE’s, what was their principle they adhered to (hint its in 3 parts), why was TVE’s more successful
CBEs (commune and brigade enterprises)
- obtain raw arterials locally
- process locally
- market products locally
-> not market oriented, confined in self-contained economy
99
Why were TVE’s successful (7 factors)
1. Small, flexible, market driven
2.
100
Why were TVE’s successful (7 factors)
1. Small, flexible, market driven
2. Appropriate production technology (had to find productively efficient ways to produce to stay profitable)
3. Distortions, market opportunities, and rural saving - manufacturing profit margins alr established as high by SOEs
4. Low taxation
5. Autonomous decision making
6. Dedication to human resource, innovation, and quality
7. International orientation (pursuit of joint ventures with other corporations)
101
What was the interlink between TVEs and household responsibility (3)
- together, prevented the state from retracing reform policies and enroaching on farmer’s contractual rights
- TVEs provided bulk of agricultural investment when state resources were shrinking
- TVE’s benefited from the capital through savings from the profits of the household responsibility system
102
When did the state focus on development of private enterprises
1995
103
What was the 2 prong approach towards private enterprises
- privatised, merge, or close most of china’s smaller SOE and TVEs
- channel state support in the direction of larger private enterprises
104
In what year was wage reform initiated
1978
105
When was the first stage of wage reforms, what did they do (2)
1978-84
1. Financed 4 rounds of promotion to make up for 2 decades of wage freeze
2. Bonus and piece rate system in place
106
When was the second stage of reforms for wages, what did they do
1985-91
- linked wage bills with economic performance
107
From 1989 to 91, by how much did wages increase annually (average)
6%
108
What were the types of china’s open door policies under Deng (3)
1. Creation of special economic zones to encourage FDI and tech transfer
2. Provision of special tax incentives for foreing investments
3. Preparation to join WTO
109
When were the first 4 SEZs set up
1980
110
What benefits did the first 4 SEZs enjoy
Imports for self use by SEZs not subject to tariffs and taxes
111
In 1984 how many coastal port cities were opened
14
112
In 1990 what was the proportion of total exports that came from the 12 coastal provinces
2/3
113
What were the 4 alongs in the 1990s as part of SEZ and open door policies
1. Along the coast
2. Along the border
3. Along the river
4. Along the railway
114
What were the tax incentives implemented as part of the open door policies
15% tax waived for first 2 years of profitability, 50% tax exemption for 3-4th year, no import duties for imported production materials
115
When did china apply to restore its status as a founding member of GATT
1986
116
What were the broad institutional reform measures related to trade that china implemented prior to being added to the WTO (3)
1. Tariff barriers significantly lowered
2. Most import quotas abolished
3. Laws and law enforcement system for trade improved (transparency, discriminatory safeguard)
117
118
When did premiership change from Li Peng to Zhu Rong ji
1998
119
What did china do to the unprofitable state owned enterprises after the AFC
Merged/solf off
120
What are the 3 international developments of note for China’s economic development
1. Impact of Sino-American rapprochement
2. Impact of japan and the Asian tigers’ economic development
3. Role of FDI from western countries and overseas Chinese communities
121
What agreement was negotiated between us and China as part of the Sino-American rapprochement, what did it consist of
Shanghai communique;
- normalisation of relations, trade opportunities
- Taiwan dispute put off for the future
122
When did US (and under which president) grant china full diplomatic recognition, in which agreement (hint it has the same name as the 1972 one)
1979, jimmy carter - 2nd communique
123
When was the third US China communique and under which president (and what did it achieve)
1982, Reagan
- reaffirmed china’s one-china policy
124
What was the impact of the Sino-America rapprochement on Chinese economic transformation
- US lifted 20 year trade embargo with china, opened china to foreign trade and investment
- US gained access to new market of cheap foreign labour
125
What is teh paradigm needed to be considered when discussing the impact of japan and the Asian tigers
Flying geese paradigm (catching up of industrialisation in late-comer countries, comparative advantage)
126
What were the 2 major treaties signed between japan and china in 1978, what did each one represent/do
1. Sino Japanese treaty of peace and friendship
2. Sino-Japanese long term agreement
- japan increase oil imports from china, while exporting industrial plants, equipment etc to china
- Beijing eager to expand trade in its quest for advanced technologies and industrial hardware
127
What was the amount of 2 way trade promised in the Sino-Japanese trade agreement of 1978
20 billion
128
How was the 1978 Sino Japanese trade agreement beneficial for both countries
Japan: lacking in raw materials, japan could export finished capital goods at competitive prices
China: eager to export primary products and natural resources in exchange for industrial hardware and equipment
129
How much economic aid did japan provide to China, and in which year, and for what purpose
1984, 2.1 billion usd to help finance 7 of 13 modernisation projects in China
130
How much did Sino-Japanese trade increase from 1977 to 1978 (Raw number in billions)
3.5 billion to over 5 billion
131
By how much did asean FDI into china increase by from 1993 to 1997 (multiple), which country was the largest contributor
3x, Singapore
132
From what to what did FDI into china increase by from the start of reforms in the late 1970s to 1990s (number in billions)
0 to 40-50 billion a year
133
What were the 3 areas of impact stemming from an increase in FDI into china
1. Increase in GDP growth
2. Increase in employment opportunities
3. Increase in competitiveness for exports
134
By how many percentage points did FDI contribute to annual gdp growth by in the 1990s
0.4
135
By what factor is employment increase by in the urban areas from 1991 to 1999, what was the biggest contributing factor for this
4x, FDI
136
By the 1990s, by what factor had Chinese global trade grown by since 1978
4.5x
137
What does Chinese economic transformation indicate about the gradual transition from a command economy, which historian said this (and what year)
Feasible, and also a resilient, natural way to transform an economy (Naughton, 2010)
138
