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Economic Transformations in China: From Mao to Deng Era

Explore the shifts in economic activities in urban China over the last 30 years, from Mao's era to Deng Xiaoping's reforms. Understand the transition from agrarian to industrial focus, the development of communes, impact of SEZs, and changes in state-owned enterprises.

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Economic Transformations in China: From Mao to Deng Era

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  1. Tom Faherty Changes in the organisation of economic activities in urban areas

  2. The Mao era • 5 year plans • Economic growth model/guidelines • Great Leap Forward • Second 5 year plan • 1958 onwards • Movement from Agrarian to Industrial • Development of communes • Communes • A group of people living together and sharing possessions and responsibilities • The cultural revolution • 1966-76 • Failure of the great leap forward

  3. Changes in the last 30 years • Changing political structure (Mao to Deng) • Open Door Policy • Introduction of SEZs • Changes to SOEs • Growth of new industries • Population growth

  4. Open door policy • Implemented in 1978 as a response to previous economic disasters of the Mao era • Chairman Deng Xiaoping implemented this policy to drive towards state-governed capitalism • To get China to look outwards for investment and for a marketplace • Allowing and encouraging FDI

  5. Special Economic Zones • SEZs are areas politically adapted for economic growth • The goal of an SEZ is to attract Foreign direct investment (FDI) because of: • Low tax levels to attract business • Planning regulations are relaxed allowing easy building of factories etc

  6. Shenzhen – The first SEZ • In the 1970s, just a small coastal village in the Guangdong province • On August 26th 1980 it became China's first SEZ • Over 30 years later it is now one of China's fastest growing cities, home to major Chinese enterprises, a stock exchange, libraries, and universities • Now a rich mix of foreign and domestic investment

  7. Shenzhen before Shenzhen after

  8. Changes to SOEs • Move to a more socialist market based economy • This includes the growth of new industries • Move away from heavy industry • High tech light industry • High profit margins due to the nature of high tech goods • Example: Sinopec, a succesful SOE which is company owned by the government but subject to company law

  9. Changes in Industry • Movement from heavy industry to light industry • Introduction of electronics industries because of their high profit margins • Movement from primary and secondary industry to tertiary and quaternary • Foreign investment in the service industry has increased by 66.3 • Sinopec, a petrochemicals energy company. A registered capital of £18.2 billion. A successful tertiary and quaternary industry

  10. Changes in Industry

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