Lessons of Trade Policy and Economic Reform in China
The Open Door Policy was a key element in China’s economic reforms. But its success can only be understood in the context of the other main areas of reform. Without the success of agricultural and rural enterprise liberalization, much of the impact of trade policy would have been lost. But equally, the trading opportunities, the foreign exchange earned, management know-how, technology transfers, and jobs created through the Open Door Policy have brought about dynamic change in China. Explaining China’s success in exporting and attracting foreign investment requires at least a minimal grasp of reform in other sectors. This chapter looks first at China’s economic performance before and after the pivotal year 1978, when reform began. Next, the main reforms in agriculture, industry, pricing and other changes in commodity and factor markets are set out. These are then related to the principal reforms in international economic policies in trade and finance. Finally, some implications are drawn for further reform in China and Eastern Europe.
KeywordsForeign Investment Foreign Exchange Foreign Trade Trade Policy Cultural Revolution
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