IGCSE History

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• Introduction to IGCSE
• The Road to Affluence: USA 1917 - 1941 (A9)
  • 1917 - 1929
    • The impact of the First World War
    • Immigration
    • Henry Ford and mass production
    • Farming in the 1920s
    • The Stock Market Boom
  • 1929 - 1941
    • The Wall Street Crash
    • The Depression
    • The policies of Hoover
    • Roosevelt and the New Deal
    • Reactions to the New Deal
• International Relations 1919-1939 (A8)
  • Collective Security
    • The Versailles Settlement
    • The Foundation of the League of Nations
    • Strengths and weaknesses of the League of Nations
    • Successes and failures of the League of Nations
    • Locarno and the Kellogg-Briand Pact
  • Appeasement
    • Manchuria
    • The Disarmament Conference
    • Abyssinia
    • Hitler and the League
    • Appeasement in action
• Revolution in China 1949 - 1996 (A14)
  • 1949 - 1976
    • China under Mao
    • Reform under Liu and Deng
    • The reasons for the Cultural Revolution
    • The impact of the Cultural Revolution
    • China 1971 - 1976
  • 1976 - 1996
    • The defeat of the Gang of Four
    • China under Deng Xiaoping
    • Reforms of the economy
    • The Democracy Movement
    • China in the 1990s
• South-East Asia 1945 - 1900 (A15)
  • Indo-China
    • The end of the French Empire
    • Vietnam 1954 - 1965
    • US involvement in Vietnam
    • The unification of Vietnam
    • Laos and Cambodia
  • South-East Asia
    • The struggle for control of Malaya
    • The creation of Malaysia
    • Singapore
    • Suharto and Indonesia
    • Sukarno and Pancasila
• Conflict and Crisis is the Middle East 1946 - 1996 (A16)
  • Unit overview
  • 1946 - 1967
    • The creation of Israel
    • The impact of the war of 1948 - 1949
    • The Suez Crisis
    • Superpower involvement in the Middle East
    • The Six Day War
  • 1967 - 1996
    • International terrorism
    • The war of Yom Kippur
    • The Palestinian Liberation Organisation
    • Lebanon and the occupied territories
    • Successes and failures from Camp David to Oslo
• The First World War (B4)
  • The Schlieffen Plan
  • Deadlock on the Western Front
  • Gallipoli
  • The Somme and Passchendaele
  • The War at Sea
  • The defeat of Germany
• The USA 1917-1929 (B7)
  • The Roaring Twenties
  • Advertising and consumerism
  • New forms of entertainment
  • Prohibition
  • Gangsterism
  • Hollywood
• China under Mao Zedong 1949 - 1959 (B10)
  • The creation of the Communist State
  • Land Reform
  • Communist society
  • The First Five Year Pan
  • The 100 Flowers
  • The Great Leap Forward
• The Changing Nature of Warfare (C3)
  • Unit overview
  • Warfare at the beginning of the 20th Century
  • Land warfare
  • Sea and aerial warfare
  • Atomic and nuclear weapons
  • Warfare at the end of the 20th Century
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Reforms of the economy

Deng was prepared to allow the market into the Chinese economy. He said, ‘If the market worked, let it’. ‘The aim of socialism is to make people prosperous, not create extremes.’ State Owned Enterprises (SOEs) would remain the basic way of organising business, but administrative structures would serve business, rather than control it. Practical decisions would take precedence over dogma (communist ideas).
Deng also opened China up to foreign trade, ending Mao’s belief in self-sufficiency.
From 1978-84 the rural economy was reformed and then from 1984 Deng turned his attention to industry and commerce.

In the rural economy, the Commune was replaced by the Xiang, which was in fact the local village or township. Each Xiang was given a quota by the government. Each family in the Xiang would have to contribute a share of the quota. This was called the ‘responsibility system’. As long as quotas were met and taxes were paid, the rest of the produce could be sold for a profit. 15 percent of all land was made available for private plots. In 1984 restrictions on commerce were relaxed so that peasants could buy produce from one another to resell it. This had been banned before.

In the early 1980s the reforms were very successful and grain production rose by 5 percent per annum from 1978-1984. But from 1984 the reforms were less successful. One reason was that peasants were still only allowed 15 year leases on their land. This meant that long term improvements were rare.

To modernise industry and commerce, Deng planned to train 1,000,000 technical students. Thousands of students were sent abroad to study. Special Economic Zones were set up. The first four were Shantou, Xiamen, Shenzen and Zhuhai. These contained China’s export industries and foreign-owned companies. The SEZs were modelled, unofficially, upon Hong Kong. They had regional autonomy, tax concessions and financial freedom. The results were impressive. From 1981-1991 Chinese exports rose by 500% and inward investment rose by 400 percent.

Deng then began to apply the new methods to the SOEs. In 1981 some urban workers were allowed to look for jobs for the first time. Before all people had been allotted jobs by the government. Contracting out of some services was also allowed for the first time. This was a major change from the policies of Mao. He believed that workers should sacrifice themselves for the good of the country. Under Mao, SOEs were completely controlled by the government. Prices, targets and pay were all set centrally. There were no rewards and therefore no initiative. In return, SOEs gave workers jobs for life and also provided houses, medical facilities and education.
Deng wanted SOEs to become efficient and competitive He wanted to provide inducements to work harder and believed that higher living standards would raise the morale of workers.

In 1986 a labour contract scheme was introduced which awarded short term contracts for workers. This was to encourage hard work and greater profits. They would only be re-appointed if they worked hard and were efficient. But this led to opposition from workers as their security was threatened. And so by 1992 only 20 percent of the workers in SOEs (about 16,000,000 people) were covered by the new contracts. Nevertheless, Gross Domestic Product (the country’s income from all its industries) had risen from 732.6 million yuan in 1979 to 2004 million yuan in 1991. Manufacturing output had increased by 9 percent a year on average.

Until the mid-1980s the economic reforms were successful, after 1986 they did not go so well. The reforms in the countryside were held up by an unwillingness on the part of peasants to improve their farms because they only had 15 year leases. Inflation also began to rise and, with the population increase, prevented the standard of living from improving. The weakening of central control led to a revival of traditional values and practices, for example, male control. There were some instances of women being sold.
In the cities, there was a shortage of jobs and many of the newly qualified university graduates could not find employment. This led to unrest on university campuses and the growth of the Democracy Movement.

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