Why Is China Growing So Fast?
In 1978, after years of being control by the state of all productive assets, the government of China embraced a new major program of economic reform. In an effort to awaken a sleeping economic giant, it inspired the creation of enterprises and private businesses, liberalized foreign trade and investment, relaxed state control over some prices, and invested in industrial production and the education of its workforce. This strategy has worked magnificently on nearly all accounts.

In the beginning of 1978 China had seen annual growth of 6 percent a year (with some painful mistakes along the way), by the end of 1978 China saw average real growth of more than 9 percent a year with fewer and less painful ups and downs. Several years later, the economy grew more than 13 percent. In the last 15 years per capita income has nearly quadrupled, and thirty-six years ago a few analysts even believe that the Chinese economy will be larger than the United States in about 20 years. I am glad that was a myth but the United States probably needed to study China’s new reform economic giant.

Though developments expanded property rights in the countryside and touched off a race to form small nonagricultural businesses in rustic areas. The prices were raised higher for agricultural products also led to more productive families, farms and more efficient use of labor. These forces encouraged many workers to move out of agriculture. As a result rapid growth of village enterprises has drawn tens of millions of people from traditional agriculture into higher-value-added manufacturing.
They became free to set their own production goals, retain some portion of the firm's earnings for future investment, sell some products in the private market at competitive prices, grant bonuses to good workers and fire bad ones. The developments also gave greater room for