ing power was being transferred from collective production units (communes, brigades, and teams) to the family" (38); purchase prices for major farm products were increased (39). In 1985, further reforms were introduced. For example, long-term sales contracts between farmers and the government were established. In addition, in an effort to allow the market to determine prices, "city prices of fruit and vegetables, fish, meat, and eggs, were freed from government controls so they could respond to market demand" (Shirk 39). Most importantly, "a surge of private and collective industry and commerce in the countryside" (Shirk 39) occurred. This allowed a great percentage of the populace to become involved in private enterprise and investment in family or group ventures. The conditions also allowed rural Chinese to leave the villages and become involved in industry in urban centers (Shirk 40). The economy grew so quickly that inflation occurred and the government had to reinstitute price controls. China's economy retains these characteristics of potential for growth--and inflation--to this day. Another important aspect of Chinese economic reform was the decision of China to join the world economy. Deng Xiaoping and his allies hoped to effect this 1979 resolution in two ways: by expanding foreign trade, and by encouraging foreign companies to invest in Chinese enterprises. This policy--denoted the "Open Policy" (Shirk 47)--was a drastic removal from the policies of Mao Zedong and, in fact, from centuries of Chinese political culture. The Open Policy, which designated limited areas in China "as places with preferential conditions for foreign investment and bases for the development of exports" (Nathan 99), was extremely successful in the areas where it was implemented (Shirk 47). However, it was looked upon by many Chinese as nothing less than an avenue to "economic dependency" (Nathan 50). Indeed, when the policy was first implemented, many C...
