1 markMCQSection A

Which measure was adopted by China to solve its economic crisis ?

Q: Which measure was adopted by China to solve its economic crisis ?

The correct answer is **(C) China opened its economy for privatisation step by step for the development of its economy.** Unlike the USSR's abrupt 'shock therapy', China followed a gradual, phased approach — first decollectivising agriculture, then opening select coastal regions as Special Economic Zones, and progressively allowing private enterprise, while retaining Communist Party control over the political system.

Contemporary Centres of Power

China's Response to its Economic Crisis

Options

(A)Like USSR, China also followed `Shock Therapy'.

(B)China ended its economic isolation with the establishment of relations with most of the developing countries of the World.

(C)China opened its economy for privatisation step by step for the development of its economy.

(D)Chine focused more on export as compared to import.

Official Answer

The correct answer is (C) China opened its economy for privatisation step by step for the development of its economy.

Unlike the USSR's abrupt 'shock therapy', China followed a gradual, phased approach — first decollectivising agriculture, then opening select coastal regions as Special Economic Zones, and progressively allowing private enterprise, while retaining Communist Party control over the political system.

China economic reformsgradual privatisationshock therapySpecial Economic ZonesOpen Door PolicyDeng Xiaopingmarket economy

Marking Scheme

11 mark for correctly choosing option (C).

Hint

The key contrast tested here is 'gradual, step-by-step reform' (China) versus 'shock therapy' (Russia/USSR).

Quick Oral Answer

China solved its economic crisis through gradual, step-by-step privatisation and market opening, unlike the USSR's abrupt shock therapy.

Analysis & Explanation

This question distinguishes China's gradualist reform path from Russia's sudden 'shock therapy', a key comparison in the chapter on alternative/contemporary centres of power.

Why (C) is correct

NCERT explicitly contrasts China's step-by-step, sequenced economic liberalisation (agriculture first, industry and trade later) with sudden, comprehensive marketisation.

Why the distractors are wrong

(A) is the opposite of the truth: China deliberately avoided the shock therapy method used by the USSR/Russia, choosing gradual reform instead.
(B) is only partially true and not the defining 'measure' — China's key reform was internal economic restructuring, not merely diplomatic outreach to developing countries.
(D) is too narrow and not the core measure being tested; export orientation was a result of reforms, not the defining structural measure that solved the crisis.

Common Mistakes

1Confusing China's gradual approach with Russia's shock therapy and selecting option (A).
2Picking a partially true but non-defining option like (B) or (D) instead of the core structural reform in (C).

Interesting Facts

China's first Special Economic Zone was established in Shenzhen in 1980, transforming it from a fishing village into a major global manufacturing hub.

China's gradualist reforms are often called 'crossing the river by feeling the stones', reflecting the step-by-step, experimental approach.

By contrast, Russia's shock therapy in the early 1990s caused a sharp economic contraction and hyperinflation before recovery.

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Frequently Asked Questions

What is 'shock therapy' and did China use it?

Shock therapy refers to the rapid, sweeping shift from a command economy to a market economy, as used in Russia. China explicitly rejected this method, choosing instead a slow, sequenced approach to reform.

What was the first sector China reformed?

China began its reforms with agriculture in 1978, decollectivising farms and allowing farmers to sell surplus produce in the market, before extending reforms to industry and trade.