China And The Keynesian Theory Essay Example | Topics and Well Written Essays - 1250 words

China And The Keynesian Theory - Essay Example For purposes of regulating their markets, the majority of states were able to adopt the principles contained in the Keynesian theory. This principle advocate for the intervention of the government, in the economic system of the state. China is one of the countries that advocated for the use of the concepts of the Keynesian theory, for purposes of controlling its national economy. This is until 1978, with the market reforms of Deng Xiaoping, in China. This is because of the failures of the Keynesian theory to protect the market economies of the majority of the developed states. This includes the United States. These countries were only able to experience economic growth, during the 1950s, to the 1960s. However, after the 1960s, the economies of these countries began to collapse, experiencing an increase in unemployment, and stagflation. This made economic experts, and policy formulators to demand a new economic system. Neo-liberalism was a preferable theoretical framework, and it advo cates for a minimum intervention by the government, in the economic affairs of the state. Deng Xiaoping supported neo-liberalism, and he led this movement in China, and this is through the market reforms that he had begun in the country. Furthermore, his visit to the United States in 1979 was in a bid to understand the manner in which a neo-liberal state was able to function. The United States was one of the leading neo-liberal states, and its economy was improving because of the adoption of the principles of neo-liberalism.