ABSTRACT
Since the advent of economic reform in China have witnessed a revolutionary pace of change. This chapter deals with a review of the major economic developments of 1988, in which a sustained strong rate of economic growth was undermined by problems with agriculture and inflation. In industry, reform combined two strategies: first, reforms within the context of state ownership, and second, the encouragement of private and collective ownership in industry. The central government's surrender of control over the use of investment funds marked the last major change in the management of the Chinese economy. Since 1978, the Chinese have stated their determination to use prices and markets to guide the economy. The policy speeches of early 1988 show little sign of the dramatic steps to be taken by the People's Republic of China leadership in May. Rapid modernization such as China is experiencing necessarily creates losers as well as winners, political tension along with public applause.
