Question

China's transition to market capitalism has been characterized by:

Select one:

a. gradual change.

b. free market exchanges for all production.

c. very slow economic growth.

d. increasingly centralized decision making.

Answer 1

The Chinese economy was basically a Command economy. It was basically a capitalist economy due to which it had faced a slow growth in the early years of 20th century. But in the year 1978 the Chinese government opened it's market to foreigners. That is they promoted free market. Starting in December 1978 the Chinese government introduced a number of economic reforms. This transition has brought a number of changes in the economy. It is considered as one of the fastest growing economy the GDP of the country has improved drastically in last 4 decades.

This transition was done in two phases first in 1978 in this stage the government opened up their market for foreign investment and allowed people to start their businesses. In the second stage the government lifted price control, privatized a number of institutions, contracting state owend industries etc.

I feel option B is correct.

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