The impact of the initial phase of reforms and transition to openness in China on the family budget decision-making mechanism

Abstract

Subject. This article discusses the issues of construction of a socialist market economy in China, as well the problems of labor movement and a family budget formation. Objectives. The article aims to analyze the changes in the structure of income, expenditure and investment of Chinese households in the initial period of the reform and opening-up policy (1979–1999), and justify the need to continue reforms. Methods. For the study, I used a statistical analysis. Results. The article finds that at the first stage of the reform and opening-up policy, household consumption and investment returned to normal gradually, becoming free from the negative impact of the planned economy. In modern China, the coexistence of different forms of ownership is allowed. Conclusions. Economic reforms have laid the foundations for transforming household budget decision-making, but at the same time they have exposed the shortcomings of the citizen registration system hindering urbanization and the labor market development. Problems in the field of healthcare, education, financial organization, urban planning, and environmental protection have become more acute.