Read the passage and answer the questions:
China’s Economic Trajectory
The Chinese leadership took major policy decisions in the 1970s. China ended its political and economic isolation with the establishment of relations with the United States in 1972. Premier Zhou Enlai proposed the ‘four modernisations’ (agriculture, industry, science and technology and military) in 1973. By 1978, the then leader Deng Xiaoping announced the ‘open door’ policy and economic reforms in China. The policy was to generate higher productivity by investments of capital and technology from abroad. China followed its own path in introducing a market economy. The Chinese did not go for ‘shock therapy’ but opened their economy step by step. The privatisation of agriculture in 1982 was followed by the privatisation of industry in 1998. Trade barriers were eliminated only in Special Economic Zones (SEZs) where foreign investors could set up enterprises. In China, the state played and continues to play a central role in setting up a market economy. The new economic policies helped the Chinese economy to break from stagnation.
What prompted China to bring changes in their economic understanding?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Ending of political and economic isolation after establishing relation with USA
Option (1) Privatisation of industry — Incorrect. The privatisation of industry came in 1998, after the privatisation of agriculture in 1982. It was a result of the new policy, not what set it off.
Option (2) To follow Soviet Model of growth — Incorrect. The Soviet model was a state-controlled economy. The decisions of the 1970s took China towards a market economy on its own path, away from that model.
Option (3) Ending of political and economic isolation after establishing relation with USA — Correct. The passage begins China’s major policy decisions with this step: China ended its political and economic isolation with the establishment of relations with the United States in 1972; the four modernisations and the open door policy followed.
Option (4) Their agricultural growth was very high. — Incorrect. High farm growth would be a reason to keep the old system, not to change it; the reforms aimed at higher productivity and helped the economy break from stagnation.
Note: This passage is taken word for word from the NCERT chapter ‘Contemporary Centres of Power’, from the section ‘The Rise of the Chinese Economy’; NTA gave it the title ‘China’s Economic Trajectory’. The paragraph on China is short, so learn its years: 1972, 1973, 1978, 1982 and 1998.
NCERT (2025-26): “The Rise of the Chinese Economy … The Chinese leadership took major policy decisions in the 1970s. China ended its political and economic isolation with the establishment of relations with the United States in 1972. Premier Zhou Enlai proposed the ‘four modernisations’ (agriculture, industry, science and technology and military) in 1973. By 1978, the then leader Deng Xiaoping announced the ‘open door’ policy and economic reforms in China. The policy was to generate higher productivity by investments of capital and technology from abroad. China followed its own path in introducing a market economy. The Chinese did not go for ‘shock therapy’ but opened their economy step by step. The privatisation of agriculture in 1982 was followed by the privatisation of industry in 1998. Trade barriers were eliminated only in Special Economic Zones (SEZs) where foreign investors could set up enterprises. In China, the state played and continues to play a central role in setting up a market economy. The new economic policies helped the Chinese economy to break from stagnation.” |