Deng Xiao-Pings Economic Reform
After the socio-economic drawbacks of Maos Culture Revolutions, the replacement of open-minded cadres Deng Xiao-Ping and his followers was eager to raise living standards and to restore political order. In 1978, economic reform was introduced to readjust, restructure and consolidate China. If compare to the Maoist period, Dengs economic reform was successful because it really improved the living standard. There was a rapid economic growth in China. The real GDP grew by 6.1 0uring 1953-1992 to 10.4 0uring 1980-1988, and real GNP increased by 233%. But for long term, the reform caused a lot of serious problems that are difficult to solve in China.
Economic inequality
The most serious problem is economic inequality between coastal and western areas. According to a report by the French bank, a place which is more dependent on farming, its people will get poorer.1 In the coastal areas where Special Economic Zones were set up, per capita income is the highest. For example, the income per capita in Zhujiang Delta is about 28000 yuen in 2001. The average per capita income of urban households is 6280 yuan in 2000. However, in the west where agriculture accounts for more than half rural incomes, average per capita income is only 2253 yuen. City residents earn three times as much as those in the countryside. Moreover, the difference of annual per capita consumption between urban and rural residents is increasing from RMB455 yuen in 1985 to RMB3440 yuen in 1995. In 1980s, Gini Coeffient which measures income inequality was just 0.28. But in 1999, Gini Coeffient was 0.456, which is in a danger level of the income gap. According to The Economist's reporter, Chinas income distribution is slightly more uneven than India's. The urban-rural economic inequality became wider and wider in China.
Corruption
Chinas current corruption problem is the lack of separation between business and government brought about by efforts to open...
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