China used the market system without losing political commitment and succeeded in raising the level of growth along with alleviation of poverty. Unlike India and Pakistan, which are attempting to privatise their PSEs, China has used the market mechanisnm to create additional social and economic opportunities. By retaining collective ownership of the land and allowing individual to cultivate lands, China has ensured social security in rural areas.

Which of the following policy was introduced in China to encourage industrialisation?

Dual price policy

The reform process also involved "Dual pricing". This means fixing the prices in two ways; farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs on the basis of prices fixed by the government and the rest were purchased and sold at market prices. The government wanted to build a free market system alongside its existing planned economy.