The buoyant growth of Chinese industry is an economic miracle for lack of a better word. Strong preconditions had been created for this leap forward:
Specifically:
- Reforms focused on human needs from the setout. The tasks of satisfying the population’s basic needs for food and consumer goods dominated the operation of newly creased economic entities. This ensured broad-based support for reforms at their initial stages;
- China focused its efforts on generating a new economic system instead of dismantling the old one;
- The key aspect of reforms has been recognized as evolutionary, phased movement to market economy with experimental testing, instead of indiscriminate economic liberalization. This reform algorithm is metaphorically expressed as follows: “When crossing the river, feel for stones”.
- The practice of the early years of reforms showed that the most natural way toward the market economy is developing economic entities of various ownership forms: collective, individual, private, joint (with foreign capital). Progress along this path can both ensure rapid growth for market participants and, through changes to the structure of the natural economy in terms of ownership forms, adapt the structure of investments and output toward real needs of the economy and social sphere;
- By stimulating economic initiative at the micro level, the country’s management did not relax control of the macroeconomic situation, responding with prompt countermeasures in cases of growing imbalance;
- Market players formed by filling vacant niches in the economy with new commercial structures instead of destroying existing state structures. This means that from day one the reforms were aimed at reducing the deficit of the economy. To this end, both internal reserves have been mobilized and foreign capital was actively attracted;
- After studying own and foreign experience, the Chinese government concluded it was necessary to implement reforms not using foreign recipes, but based on the country’s specifics. The government adopted a decisive policy toward “building socialism with Chinese specifics”. This required taking into account such a core factor as the huge population in the conditions of limited resources.