ABSTRACT
Since the People's Republic of China was founded in 1949, it has restructured and reformed its economic institutions several times and in many aspects. This chapter aims to familiarize readers with the underlying political and economic context. From 1949 to 1978, the Chinese economy was largely a Soviet-style planned economy. In 1949, the Ministry of Fuel Industry was established to be in charge of planning and production of fuels, and the Ministry of Water Resources was in charge of hydropower. The centerpiece of the First Five-Year Plan was the construction of 156 large industrial projects, with technologies and equipment imported from the Soviet Union and Eastern Europe. The Great Leap Forward triggered the Sino-Soviet split, which was the sudden deterioration of China-Soviet Union relation. The Great Leap Forward core was steel production. Deng Xiaoping initiated the "Reform and Opening Up" policy, which was to introduce market mechanisms into the Chinese economy and open up to international trade and foreign investments.
