chapter  1
6 Pages

Introduction and Evaluation Criteria

ByJonathan Leightner

In 1949, China was one of the most backward agrarian countries in the world and had suffered international defeat after defeat for the previous hundred years, a decade of devastating civil war, and a cruel occupation by Japan. From 1980 to 2007, China grew tremendously due largely to the gains from international trade. China became an export powerhouse. Market efficient means that the sum of consumer-plus-producer surplus value is maximized. Consumer surplus value can be defined as the difference between the maximum price a consumer would pay minus the actual price they do pay summed over all units purchased. China's primary flaw is her lack of ethics. Every administration between Mao Zedong and Xi Jinping has sacrificed ethics in order to promote either macroeconomic performance or microeconomic efficiency. Free markets tend to create greater microeconomic efficiency, and central planning has some key advantages with promoting macroeconomic performance.