Why did the Chinese government reduce its control over some parts of the economy?

The Chinese government reduced its control over parts of the economy primarily to improve efficiency, spur growth, and move away from the rigid, centralized planning models that had previously led to economic stagnation and crises.123

Following the death of Mao Zedong and the end of the Cultural Revolution, reformers led by Deng Xiaoping recognized that the existing system—which relied on mandatory planning and collective management—was ineffective. Key reasons for the shift included:134

• Efficiency and Incentives: The government sought to replace bureaucratic control with market forces, assuming they could allocate resources more efficiently. By granting enterprises more autonomy and allowing for material incentives, such as bonuses and profit retention, the state aimed to encourage individual effort and managerial accountability.1523
• Agricultural Reform: To address low productivity, the state dismantled the collective farming system in favor of family-based contracting, allowing farmers greater freedom to choose crops and sell surplus goods on the free market.125
• Modernization: The government shifted its priority to economic development, integrating China into the international economy to attract foreign capital and technology.23