Question

reasons why China is turning away from socialism and accepting capitalism

Answer 1

China has socialism feature. It means all sorts of economic and business activities are controlled by the country’s government. There is no absolute privatization; but may joint ownership or absolute ownership by the government.   

The economy of the country is growing fast; and it is the 2^nd largest (after the US) in the world. It has a growth rate of 10% in terms of GDP.

All these happen although staying in the socialism character; but still the country is accepting capitalism because of the following reason:

1) The country wants to increase the growth rate further, somewhere near to 18% to 20%. It requires the foreign direct investment (FDI), which is a feature of capitalism and can’t be performed by staying in socialism.

2) The government creates so many economic zones within the country, like export processing zone, 100% EOU, etc. These require foreign participation, like skilled labor, technical know-how, foreign market, etc. Socialism can’t fulfill all these; therefore, the capitalism requires.