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Extra resources for How the Chinese Economy Works: A Multiregional Overview

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32 Nevertheless, the regional differences in educational attainment are greater in rural areas than in urban areas. 29). 910 in rural area, almost three times that in urban area. 4 POLICY IMPLICAnONS The ultimate goal of any economic system is the allocation of scarce resources among competing factions. To accomplish this goal, the economic system must explicitly deal with the supply and demand of goods and services as well as the interaction between the two. There is no exception for the Chinese economy.

China's modestly high illiteracy has been decided by both historic and institutional factors. Before 1949, China's education was China's Economic Resource Base 33 very backward and had been seriously damaged by the long-lasting wars. 23 During the GCR period (1966-76), China's education system which, to a large extent, had represented Confucianism was effectively reformed. Primary school education was reduced from six years to five years and junior and senior middle school education were each cut by one year.

During this period, the GLF movement was effectively launched by setting up a series 44 How the Chinese Economy Works of high targets within a given period, most of which, however, were impossible to be fulfilled due to the limitation of resources and production capacities. ll To accomplish its ambitious target for an overnight entrance to the 'communist heaven', large quantities of raw materials and labour force were diverted toward heavy industry while, in contrast, the development of agriculture and light industry received less attention.

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