The Chinese civilisation, which developed along the muddy, fertile banks and in the wet lowlands of the Changjiang, was chiefly an agricultural culture. Recent excavations have revealed that even 3000 to 4000 years ago millet and rice were cultivated and advanced methods of land use and irrigation were already in use.
But it would be wrong to say that China was only an agrarian society, as it was producing hand-made consumer goods long before other cultures and also quarrying raw materials. Silk, porcelain, tea plantations, salt and coal mines are just a few examples of how China was able to diversify in the past.
The progressive economic structure that Western visitors encountered in the 13th and 14th c. started to decay in the following centuries. This reversal in fortunes, in the view of several historians, had two causes. One was objective – an excess of manpower which discouraged the development of new, time-saving methods and one was subjective -the strict control of the imperial bureaucracy which suppressed individual freedom and personal initiative. Also important was the indisputable fact that farming had priority over every other productive occupation and for it to continue successfully, assistance from a strong political central source was essential as the hydraulic systems necessary to combat geological and climatic conditions had to be co-ordinated.
Between the 14th and 18th c. China took a more prominent position on the world stage, but because of its economic and political weakness, it easily fell prey to the European powers who were mainly interested in its locally produced goods and raw materials. However, Western imperialist expansion also brought industrial technology to the country and the infrastructure was improved. The ports of Shanghai, Canton and Tianjin were created or enlarged. In 1876 the first railway line was built and steel plants, mechanical engineering and light industry developed.
When the Chinese set about the reconstruction of their country after 1949, the economy lay in tatters. China map for travel The role of industry was not significant as what little industrial plant existed was in a poor condition. All factories were mainly concentrated in the coastal regions around the four ports of Tianjin, Qingdao, Shanghai and Canton (where foreign companies were based) and in Manchuria, where the Japanese had developed a number of industrial projects during the civil war. In the interior, industrial development had been centred on Chongqing, Wuhan and Taiyuan. The situation in the rural areas was certainly not flourishing either. After the wars the hydraulic systems which were essential for irrigation and for the control of the rivers were no longer functioning properly.
The economic policies adopted after 1949 were based on a number of principles. Firstly it was vital to strengthen the key role of agriculture in the interior and secondly the industrial imbalance between the coastal regions and the interior had to be rectified. This involved building new plant and infrastructure in towns without any industry and close to the areas where the raw materials originated. Further improvements such as land drainage, forestation, river control, dam construction and extension of the road and rail network were to lay the foundations for opening up the desert areas and also achieving better returns on agricultural land.
After the death of Mao Zedong the 5th five-year plan of 1976 set about changing the direction of economic policy. Reforms were Working in the fields introduced from 1978, first in agriculture and then in 1984 under the 6th five-year plan for industry. The reforms, which brought about far-reaching changes to the economic system, were designed to encourage private, profit-oriented entrepreneurs in agriculture and light industry. Moves were also made to attract foreign companies in order to take advantage of new technologies. In 1980 a number of Special Economic Zones (Shenzhen, Zhuhai, Shantou, Xiamen and in 1988 Hainan) were set up with capitalist objectives.
Under the 7th five-year plan (1986-90), the economy was to be regulated with prices, taxation, credit, wages and exchange rates rather than with administrative measures. Several coastal regions and a number of towns were granted economic privileges including favourable working conditions and special fiscal and currency regulations. All these measures led not only to an enormous increase in gross national product, but also to higher levels of inflation and an increasing budget deficit. The aim of the 8th five-year plan (1991-95) is to continue the process of structural economic change by improving raw material production and processing and by extending the infrastructure more rapidly.