When the communists took over in 1949 Chinese society was reorganized into work units. People lived where they worked and all of life was spent within the walls of the communist work unit. The system is often referred to as the 'iron rice bowl', which means that everything that was needed from birth till death was provided for by the state. No one had much but everyone had the basics. Unemployment did not exist.
China has changed a lot after opening up in 1978, but in many cases the work unit somehow still exists, be it in a totally different version. The Communist Party is still in reign and China is still a communist country. Sometimes we tend to forget that with the economic booming, but when you look underneath the surface you will discover the communist institutions are still there. The 'socialist economy with Chinese characteristics' means that the government and the Communist Party stay in control of the economy in a way westerners are not used to and often even tend to ignore.
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