CBSE 2025, Compartment, Set 1

Question

"China has experienced rapid economic growth owing to the introduction of economic reforms in 1978."
Elaborate any two economic reforms introduced by China.

Edvaya · Accepted Answer

The correct answer is Subjective. The rapid and sustained economic growth in China was catalyzed by the strategic reforms introduced in 1978. Two critical reforms were: 1. **Agricultural Reforms (Initial Phase):** In agriculture, the previous communal lands were meticulously divided into smaller plots. These plots were allocated to individual households for their direct use (though not ultimate ownership). The households were highly incentivized as they were allowed to keep all the residual income generated from the land after paying the stipulated government taxes, which dramatically boosted productivity. 2. **Industrial Reforms (Subsequent Phase):** Reforms were aggressively extended to the industrial sector. Private sector firms, and notably Township and Village Enterprises (TVEs), were permitted and encouraged to produce goods independently. At this stage, the monolithic State-Owned Enterprises (SOEs) were deliberately exposed to market forces and made to face stiff competition to enhance their overall efficiency.

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Economics > Indian Economic Development > Comparative Development Experiences

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