Under the current socialist system, land, natural resources, and most industrial enterprises are state property. Land reforms were completed in the Han area in 1952 and later among minorities. Between 1949 and the late 1970s, the government encouraged or established various forms of cooperative or collective management and organization of agriculture, industry, and services.
During the land reform, household ownership of land, towing animals, and equipment were essentially the same. Between 1952 and 1954, households were encouraged to combine their labor and means of production into relief teams of four or five households.
These organizations were voluntary, as was the case with the early agricultural cooperatives (sometimes referred to as low-level agricultural producers' cooperatives), which began to form in 1954. Payments to member households were based on a combination of labor inputs and ownership of productive resources.
However, in 1956 whole village collectives (cooperatives of high-level agricultural producers) became mandatory, and compensation shifted to labor input only. After 1958, villages (renamed "brigades") were combined into units of an average of twenty villages, known as People's Communes. Each brigade and its component teams manage day-to-day work tasks and have autonomy in developing secondary industries and determining wage levels, but most major decisions are made by the commune or higher levels of government.
Commune centers are usually located in market towns; after 1966, local free markets were abolished and continued in the late 1970s. Commune centers typically include a secondary school, a small hospital and outpatient clinic, several small factories and repair services devoted to agriculture, postal and banking services, and state-owned shops catering to local needs.
Commune cadres (officials and technicians) were usually assigned from elsewhere and were paid by the state. During the years of the Great Proletarian Cultural Revolution (1966-1976), the brigades were restricted in their economic activity, and general conditions in the countryside failed to improve.
During the years of experimentation with various forms of collective labor in agriculture, there was some growth in urban centers. The rural population fell from nearly 90 percent in 1949 to 80 percent in 1961. But in the late 1950s, the government began closely monitoring movement from rural areas to cities. State control over the assignment of urban jobs, housing, ration cards, and residence permits restricts rural-to-urban migration. At the same time, millions of urban youth are voluntarily or assigned to work in rural areas to reduce urban population pressures.
Since the late 1970s, many important changes have taken place, starting with reopening free markets for groceries and small homemade goods in rural and urban areas. The government allowed some of the youth who had been demoted to return to towns and cities.
In the early 1980s, the state pushed for dismantling the collective system in the countryside, leaving time and procedures for local decisions. Households can now lease land and other productive resources, keeping most of the profits to themselves. The authorities encourage farmers to develop new businesses on a household basis or in collaboration with others. Average income increased rapidly. A parallel development in cities is the emergence of free market entrepreneurs who provide various goods and services.
Travel and transportation restrictions have been relaxed. There is also permanent population movement: in the mid-1980s, less than 70 percent of the population could still be counted as rural due to the growth of established cities and new towns. As of 1986, there were at least forty cities with populations over one million, excluding suburban counties under municipal administration.
Other urban growth stems from establishing five Special Economic Zones and many Development Zones, where the state welcomes foreign investment and joint ventures. This new zone has much higher wages, living conditions, and general quality of life.
Since 1980, the standard of living has improved greatly in inner China. However, the increase was much slower in areas populated by various national minorities. Regarding per capita income, Tibet, Ningxia, Xinjiang, Gansu, Yunnan, and Guizhou rank the lowest in revenue and consumption of goods. This situation has only begun to change recently, with the development of cross-border trade with countries of the former Soviet Union or with mainland Southeast Asia and the Middle East.
In recent decades, China's economic development has been slowed by population growth. This problem led to current measures trying to limit urban families with one child and rural families to two. The policy has some flexibility: for example, a rural couple with two daughters will usually be allowed to try again in the hope of having a son.
Penalties for having additional children vary locally; they include fines, pay reductions, free medical care withdrawal, and or denial of admission to state-run nurseries and kindergartens. For successful farming families or free market entrepreneurs, this economic punishment is not a problem. Most national minorities are still exempt from family size restrictions but are encouraged to practice birth control. The national birth rate fell to around 20 or 21 births per 1000 people in the late 1980s.
Increased foreign contacts through trade, tourism, and scientific exchange have impacted people's lives, especially in cities and their surroundings. Western-style clothing and home furnishings have become popular, along with modern conveniences such as color televisions, stereo tape recorders, CD players, refrigerators, and washing machines.
Popular music has been influenced by western rock and classical music; Modern dance now finds audiences in cities, graphic arts exhibit a strong European influence, and contemporary European-American literary traditions have influenced some popular fiction or drama writers.
Even foreign foods such as bread and dairy products are finding a market, and restaurants serving ethnic cuisine are growing in popularity. Apart from the Marxist school of thought, Western political and economic ideas also found support among intellectuals. There has been some liberalization of the political system since the late 1970s, with the election of delegates to the National People's Congress and local representative bodies.
However, the Communist Party's control of society remains strong, and political dissent continues to threaten national security.