To introduce a market economy in 1970s, China did not adopt :
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → The USSR model of Shock therapy
Option (1) Open door policy — Adopted. By 1978 Deng Xiaoping announced the ‘open door’ policy and economic reforms, to raise productivity through investment of capital and technology from abroad.
Option (2) Privatisation of Agriculture & Industry — Adopted. China opened its economy step by step: the privatisation of agriculture in 1982 was followed by the privatisation of industry in 1998.
Option (3) Foreign direct investments & creation of special economic zones — Adopted. Trade barriers were removed in Special Economic Zones (SEZs), where foreign investors could set up enterprises, and China became the most important destination for foreign direct investment.
Option (4) The USSR model of Shock therapy — Not adopted. The Chinese did not go for ‘shock therapy’, the sudden change to a capitalist economy that Russia and the other former Soviet republics went through; China followed its own path and the state kept a central role in setting up the market economy.
NCERT (2026-27): “The Rise of the Chinese Economy … 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.…” |