Title: China - The role of the government | Britannica
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The role of the government
Content: China - The role of the government | Britannica
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The role of the government
China has been a socialist country since 1949, and, for nearly all of that time, the government has played a predominant role in the economy. In the industrial sector, for example, the state long owned outright nearly all of the firms producing China’s manufacturing output. The proportion of overall industrial capacity controlled by the government has gradually declined, although heavy industries have remained largely state owned. In the urban sector the government has set the prices for key commodities, determined the level and general distribution of investment funds, prescribed output targets for major enterprises and branches, allocated energy resources, set wage levels and employment targets, run the wholesale and retail networks, and controlled financial policy and the banking system. The foreign trade system became a government monopoly in the early 1950s. In the countryside from the mid-1950s, the government prescribed cropping patterns, set the level of prices, and fixed output targets for all major crops. By the early 21st century much of the above system was in the process of changing, as the role of the central government in managing the economy was reduced and the role of both private initiative and market forces increased. Nevertheless, the government continued to play a dominant role in the urban economy, and its policies on such issues as agricultural procurement still exerted a major influence on performance in the rural sector. The effective exercise of control over the economy requires an army of bureaucrats and a highly complicated chain of command, stretching from the top down to the level of individual enterprise. The Chinese Communist Party reserves the right to make broad decisions on economic priorities and policies, but the government apparatus headed by the State Council assumes the major burden of running the economy.