The importance of foreign economic relations to the economy of the People’s Republic of China from 1949 to 1976

Abstract

From 1949 to 1976, the economy of the people's republic of China is constantly affected by its foreign economic relations. However, economic historians have been arguing about how vital foreign economic relationship is to China's economy. This paper aims to demonstrate that China’s foreign economic relations were essential to its economy from 1949 to 1976. The Cobb Douglas function will be used to analyse how foreign economic relations influence the Chinese economy. And the Chinese economy’s performance is measured by real GDP per capita and total industrial and agricultural outputs. The importance of foreign economic relations to China’s economy during this period will be assessed firstly by how the Soviet economic conceptions, mainly Stalinist, influenced the Chinese domestic economy. Secondly, by the different trading partners China held and how they affected its economic performance.