Use a major case to show how politics has affected Chinas economy or economic policies post-1978

By: Jonathan K Kush

In 1978, the Chinese government under Deng Xiaoping launched the Open Door Policy, ending more than two decades of Maoist international isolation and setting in motion regulatory reforms that transformed both Chinas economy and political landscape. Over the next three decades, the post-1978 period saw China transform itself from a broken economy following Maoist policies that had banned the market and entrepreneurship, to one that was vibrant and allowed market forces and private enterprise to blossom and prevail. But despite the Chinese government relinquishing control over certain sectors of the industry to allow private investment and FDI, China today still remains committed to socialism, calling itself a "socialist market economy with Chinese characteristics". The result is a market economy that is "a function of a political balance between two Chinas-the entrepreneurial, market-driven China vis-à-vis the state-led China, a form of "state-guided capitalism (Coase and Wang 2012). Using a case study in the telecoms services sector, this essay will show how politics of the state affects economic policies post-1978.

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