Privatisation Essay Example | Topics and Well Written Essays - 750 words

Privatisation - Essay ExampleHowever, it can be argued that since 1978, the country is experiencing tardy process of transition from importantly planned economy to an economy where the resources are allocated through market instrument (Kikeri & Kolo, 2005). Nonetheless, the economic reform in China has had a profound impact on the economic body of the nation over the last two decades but the nature of the transition is still identified to be incomplete. It has been observed that prior to price reform in China, it acted as an instrument for states redistribution policies. Correspondingly, it has been observed that during the regime, central government control conduct the process of all the major commodities. However, the price reform in China has led to the commencement of freely-operating market signals almost in all the sectors of the economy. The price liberalisation facilitated in responsive offer towards the consumers demand as well as downstream producers which dramatical ly resulted in greater allocative efficiency. The price deregulating reduced the states role in fixing and guiding prices to a substantial extent. Besides, prior to 1978, the policies of the Chinese government have been firmly based on the principle of self-efficiency while importing merely those commodities that could not be produced and at the same time exporting goods only to pay for imports. Notably, trade make up only a small proportion of the Chinese economy. In other words, trade was monopolised and predominately controlled by the central Government ministries. The trade liberalisation policy in China has dramatically led towards encouraging extraneous investment and trade while it also resulted in determining the increasing imports and exports by market forces decrease the States control over the international trade. Correspondingly, this process led to the increased participation of personal firms thus reducing the State dominance (Mina & Perkins, 1997).The