Why did the USSR collapse and China succeed? Explain
What will be an ideal response?
In contrast to the Russian experience, the Chinese economy did not decline at all during its transition from communism to capitalism. The proponents of rapid reform see China as a special case. First, central planning was less extensive in China, with the result that its economy was less distorted and less overconcentrated on heavy industry. Second, and most importantly, China's economy is much more agricultural. In 1978, when China began its reforms, 71 percent of the labor force was in agriculture. The figure for Russia in 1990 at the beginning of its transition was 13 percent. China's heavier concentration in agriculture gives it a large rural labor force with very low productivity. If these workers leave the countryside, the resulting loss of output is small, while the offsetting productivity gains from employment in urban and village industrial enterprises are significant. Hence, China can move labor from agriculture into the new enterprises, but Russia had to take labor out of heavy industry to staff the new enterprises.
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A country will be able to consume a combination of goods that is not attainable solely from domestic production if
A) the world terms of trade differ from its domestic relative costs. B) the country specializes in one product. C) the country avoids international trade. D) the world terms of trade equal the domestic relative costs. E) the country's domestic production value equals world relative value.
What result of the Uruguay Round was the most significant for global trade?
What will be an ideal response?