abhishreshthaa
Abhijeet S
CAUSES OF LIBERALIZATION IN CHINA
In the early 1990s was that after Tiananmen Square in 1989, the conservative economic planners took control of the country. At that time the State Owned Enterprises (SOEs) ie. China’s PSUs were virtually bankrupt because of the tight economic controls that the central planners imposed on the country.
In the 1980s, there was some private sector activity, but when these activities became politically and ideologically problematic for the leadership after Tiananmen, they cracked down on private firms.
So in 1991 there was a substantial reduction of economic growth and the Chinese external sector ran into difficulty. It was this difficulty that prompted the leadership to open up the Chinese economy to FDIs.
In the early 1990s was that after Tiananmen Square in 1989, the conservative economic planners took control of the country. At that time the State Owned Enterprises (SOEs) ie. China’s PSUs were virtually bankrupt because of the tight economic controls that the central planners imposed on the country.
In the 1980s, there was some private sector activity, but when these activities became politically and ideologically problematic for the leadership after Tiananmen, they cracked down on private firms.
So in 1991 there was a substantial reduction of economic growth and the Chinese external sector ran into difficulty. It was this difficulty that prompted the leadership to open up the Chinese economy to FDIs.