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Econ 2073: Introduction to the Chinese Economy (Spring 2020)

Assignment #2 covers Topics 3 & 4 and is worth 40 points.

Name_____________________________  Section ______________________________

1.      Briefly describe how land ownership in rural China had changed during 1942-1956.

2.      Which of the following about rural China during the Great Leap Forward (GLF) movement (circa 1957-62) are correct? (Note there is more than one correct answer)

A.    GLF famine is natural disaster that was unavoidable.

B.     GLF famine is man-made disaster that should have never happened.

C.     Drastic farming practice during GLF greatly improved agricultural output.

D.    Some peasants were diverted to non-farm activities such as steel production.

E.     Communes had no control over non-farming aspect of rural life.

3.      After the GLF famine, rural China was allowed a relative long period of restoration. Which of the following manifests this restoration? (Note there is more than one correct answer)

A.    Communes stopped playing any role in rural life.

B.     Communal dining was discontinued.

C.     Non-agricultural activities grew and provided jobs.

D. Farm management was switched to smaller production teams.

E. Markets for farm products were re-opened, though still tightly controlled.

4.      During 1949-78, peasants must sell their grains to the government at a price lower than the market equilibirum price. Which of the following about this policy are correct? (Note there is more than one correct answer)

A. It hurt the peasants.

B. It benefited urban residents.

C. There was a loss in total social welfare.

D. Agriculture was suppressed and agricultural output plummeted.

E.  It helped greatly promote Chinese industrialization and urbanization.

5.      Which of the following about urban Chinese economy during 1949-78 are correct? (Note there is more than one correct answer)

A.    The Party took over all urban businesses, previously private or not, with little cost.

B.     China adopted the Big Push industrialization strategy focusing on heavy industries.

C.     GLF in urban China was largely an irrational intensification of heavy industrialization.

D.    China launched multiple military projects in inland China in the early 1960s.

E.     Industrial labor productivity was significantly improved.

6.      Circle words and fill in blanks to complete the following statement.

The “Big Push” development strategy prioritized (heavy   light) industry that requires relatively (large   small) amount of capital and (more   less) labor that must also be better educated; as compared to (heavy   light) industry that requires (large   small) amount of capital and (large  small) amount of labor that need not to be as well educated. The rationale of adopting this strategy is that (heavy  light) industries have (more  less) _________ with the rest of the economy. This strategy is (appropriate   inappropriate) because it (complied with   violated) China’s (comparative advantage   absolute advantage), which means ______________________

_____________________________________________________________________________.

7.      The Chinese also experienced a series of ideological campaigns during the Mao period. Name three ideological campaigns. What impacts do you think these campaigns had on Chinese economy and society as a whole?

8.      By the end of the Mao years, China was finally ready for a change in its course of development because  (Note there is more than one correct answer)

A. Multiple food crises suggested that agriculture must be developed first.

B. Heavy industrialization led to little improvement in the standard of living.

C. People wanted a diversion from the Maoist orthodoxy.

D. The country had developed a stronger labor force ready for a new course.

E. The United States would sanction China if it did not change its course.

9.      Which of the following Chinese leaders were actively involved in launching China’s transition to a market economy in 1978? (Note there is more than one correct answer)

A.    DENG Xiaoping

B.     HUA Guofeng

C.     ZHOU Enlai

D.    HU Yaobang

E.     LIN Biao

10.  Circle words and fill in blanks to complete the following statement.

Then central issue of China’s economic reform is a shift from _______________ to _______________________. To this end, the reform must include (1) a shift from _______________________ to ______________________________ property rights structure; (2) a shift from ___________________________to _______________________ price system; (3) a shift from _____________________ to _________________ foreign trade and investment; and (4) and reforming other market-supporting institutions such as _________________, ______________________, and _____________________.

11.  Which of the following about China’s economic reform are correct? (Note there is more than one correct answer)

A.    It started with introducing a Household Responsibility System in rural China.

B.     It started with opening Special Economic Zones in urban China.

C.     It includes a very successful privatization of urban State-Owned Enterprises.

D.    It includes financial and fiscal reforms.

E.     It experienced no political setbacks.  

12.  Circle words and fill in blanks to complete the following statement.

During 1978-1993, Chinese per capita GDP (in 2010 USD) grew at an annual average rate of ____; as opposed to ___ during 1960-1978. China achieved an even faster annual average growth rate of ____ during 1993-2010; though it slowed down to ____ during 2010-2018. Growth accounting suggested that during 1952-78, much of China’s growth came from growth in _____________________ while growth from technological advancement and institutional progress was ________. In contrast, during 1978-2012, ______ of China GDP growth came from progress in technologies and institutions; though growth in ______________________ remained important, contributing to almost two-thirds of China’s GDP growth in the said period.