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.
‘Open Door policy’ was related to-
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Generating higher productivity by investments of capital and technology from abroad.
Option (1) Higher investments in the banking sector. — Incorrect. The policy invited investment from abroad to raise productivity across the economy; the passage does not tie it to banking.
Option (2) Export of technology — Incorrect. The direction is reversed: the open door policy brought technology into China from abroad; it did not send technology out.
Option (3) Eliminating China’s Communist character completely. — Incorrect. The reforms did not end the role of the state: the state played and continues to play a central role in setting up the market economy.
Option (4) Generating higher productivity by investments of capital and technology from abroad. — Correct. By 1978 Deng Xiaoping announced the ‘open door’ policy; the policy was to generate higher productivity by investments of capital and technology from abroad.
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.” |