The feudal serfdom in old Tibet seriously handicapped the development of the social productive forces. The economy in Tibet was in a state of extreme backwardness for a long time. Wooden ploughs were the basic tools for agricultural production and yaks were employed for threshing. Slash and burn cultivation and the burning of grass to fertilize land were still customs retained in a few localities. In 1952, each mu of land (15 mu equal to 1 hectare) could only produce 80 kg of grain on the average and the per-capita share of grain came to 125 kg. Livestock breeding hinged on climatic conditions and frequent natural calamities often caused the deaths of large numbers of animals. In 1952, the region had only 9.74 million head of livestock. The handicrafts industry was also extremely backward and modern industry was nonexistent in old Tibet. Dangerous and difficult roads made it hard to travel in the region. The transport of goods and the delivery of mail had to depend on human and animal power. There were no bridges on the Yarlung Zangbo River that dissects Tibet, except for a few chain constructions left over from the Ming Dynasty. Since there were no highways in Tibet, the car given to the Dalai Lama by the British had to be dismantled and carried to Lhasa by draught animals. Tibet was also backward in regard to sources of energy. In 1950, on the eve of Tibet's peaceful liberation, there was only one 125-kw hydropower station in the region, which supplied electricity only intermittently. The backward economy and the cruel exploitation by the serf-owners kept the people in dire poverty and misery. As far as Lhasa, the capital of Tibet, was concerned, there were only 20,000 residents in the city proper before the Democratic Reform in 1959, and close to 1,000 tattered tents thrown together for the poor and beggars could be seen on the outskirts of the city. Prison authorities offered no food to the convicts, and "prisoners" in handcuffs and wooden cangues begged in the streets. And the pathetic remains of those homeless people who died of frost and hunger could be spotted anywhere in the city.

The Democratic Reform has greatly fired the enthusiasm of farmers and herdsmen for production. In the past four decades, particularly since the reform and opening up of the last ten years and more, earth-shaking changes have taken place in Tibet. With the support of the central government and people throughout the country, the Tibetan people have developed production, alleviated poverty and built up family fortunes.

The development of agriculture and animal husbandry has been given top priority in the Tibetan economy. During the early stage of the Democratic Reform, the central government and the Tibetan local government formulated a series of policies and principles for the development of agriculture and animal husbandry which were compatible with the local conditions. Financial and material support was also provided. As a result, Tibet's production levels of agriculture and animal husbandry increased greatly. Total grain output rose from 180 million kg in 1959 to 315 million kg in 1966, registering an average growth rate of 8.3 percent a year. Cattle soared from 9.556 million head in 1959 to 18.175 million head, a rise of 90.2 percent. The living standards of the people took the first step towards improvement.

Since 1980, the government has imposed no levies on farmers and herdsmen, with both agricultural and livestock taxes exempted. In 1984, in addition to continuing the practice of interest exemption for agricultural and livestock loans, the government annulled repayment of pre-1980 collective loans used for the building of water conservancy projects and purchasing machinery for agriculture and animal husbandry. Agricultural and pastoral areas have introduced various forms of contracted production responsibility systems on a household basis, developed household sideline occupations, restored open markets and conducted large-scale capital construction of farmland and grassland. Before the liberation of Tibet, there was no farm machinery or chemical fertilizer in Tibet. Nowadays, farming households own tractors. Scientific farming and breeding of cattle has become highly valued and welcomed. Introduction of modern tools for production and the application of science and technology have boosted overall production. In 1991, the total output value of agriculture reached 2.046 billion yuan in Tibet, 4.4 times higher than in 1952. Grain output came to 580 million kg and the average per-mu yield was 224 kg, showing rises of 3.7 times and 2.8 times respectively over 1952. Although the 1991 population of Tibet was almost double that in 1952, the per-capita share of grain in 1991 came to 290.5 kg, or an increase of 2.2 times that of 1952. The output of animal by-products rose by a substantial margin. In 1991, the total meat output stood at 91,000 tons and the total output of milk reached 177,000 tons.

Modern industry started after the Democratic Reform of Tibet. In 1965, 80 industrial enterprises were established in Tibet. Employing close to 10,000 workers, they covered the building, power, motor vehicle repair, lumber, tanning, borax and coal industries. The total industrial output value reached 28.83 million yuan that year. The government has paid close attention to the development of the national handicrafts. In 1965, it had widened to encompass 33 trades and its total annual output value rose from 1.24 million yuan before the Democratic Reform to 8.9 million yuan, showing a 7.2-fold rise. Tibet was short of petroleum and coal, and energy supply was inadequate in the past. To change the situation, a power station was built in Lhasa in 1956. It was the first public power enterprise in Tibet. Tibet is rich in geothermal resources and the state invested in building a geothermal power station in Yangbajain with the biggest generating capacity in China. In 1991, the installed power generating capacity of Tibet reached 140,000 kw and the annual output of generated electricity came to 400 million kwh. After 40 years of construction, Tibet boasts a dozen or so modern industries such as power, mining, building materials, lumber, wool textile, printing and food. Employees of state-owned enterprises total 51,000. In 1991, the total industrial output value came to 403 million yuan, a rise of 5.3 times that of 1959. The output value of the handicrafts stood at 46 million yuan.

Tibet had no regular highways in the past. After the peaceful liberation of Tibet, the first large-scale construction project was to build highways from Sichuan and Qinghai to Lhasa on the high mountain ridges with an average elevation of 3,000 meters. The Sichuan-Tibet Highway is 2,413 km long and the Qinghai-Tibet Highway 2,122 km long. Since then, the Xinjiang-Tibet, Yunnan-Tibet and China-Nepal highways have been built one after another. Currently, there are 15 arterial highways and 315 feeder roads, with a total length of 21,842 km, throughout Tibet. Except for Medog County which is located deep in the mountains, highways provide access to all the counties and 77 percent of the townships in Tibet. A highway network, with Lhasa at the center, consisting mainly of the Qinghai-Tibet, Sichuan-Tibet, Yunnan-Tibet and China-Nepal highways, has taken shape. In order to solve Tibet's fuel supply problem, the state allocated funds to build a refined oil transmission pipeline from Golmud in Qinghai Province to Lhasa. This 1,080-km-long pipeline has played an important role in guaranteeing energy supplies for Tibet in its economic construction. To meet Tibet's need to open to the outside world, since the start of an air route from Lhasa to Beijing in 1956, domestic airlines have offered services from Lhasa to Chengdu, Xian, Lanzhou, Shanghai and Guangzhou. International air links have been inaugurated between Lhasa and Kathmandu, Nepal.

Modern science and technology did not exist in old Tibet. The period since the Democratic Reform has seen the establishment of agricultural, animal husbandry, communications, power, construction, geological, water conservancy, meteorological, public health, pharmaceutical and educational research institutions in Tibet. They have trained Tibetan scientific and technical personnel. The Academy of Social Sciences of the Tibet Autonomous Region was set up in 1985. Currently, Tibet has 17 special scientific research institutions with 26,900 technical personnel. Over the past 40 years, 347 scientific and technological achievements have been awarded prizes at the autonomous regional level. Of these, 21 scientific research achievements such as "the comprehensive development and utilization of solar energy resources in Tibet" have been honored by state prizes.

The snowy peaks, famous monasteries and relics of historical interest on the Tibetan Plateau have attracted many adventurers and tourists from other countries. In opening up, Tibet's tourism industry has gradually flourished. At present, Tibet has 11 travel agencies and 19 tourist hotels and guesthouses with 3,600 beds for foreign guests. The autonomous region has opened over 60 scenic spots to the public. Between 1980 and 1991, Tibet received 150,900 overseas tourists.

Due to efforts made in the past 40-odd years the living standards of the Tibetan people have improved markedly. Most farmers and herdsmen have adequate food and clothing and some have attained relative affluence. In 1991, the average net income of farmers and herdsmen in the region was 455 yuan. Allowing for price increases, the figure was 2.6 times higher than the 159 yuan of 1979. In the Zholgyur Village, Yadong County at the foot of the Himalayas, the annual income of the 75 households was 361,600 yuan in 1986 and 74 households have built new dwellings. The per-capita income of residents in cities and towns is 2,120 yuan a year, 3.3 times higher than in 1981. By the end of 1991, savings deposits of city and township residents totalled 492.4 million yuan, over 500 times more than in 1959. Farmers and herdsmen have obtained considerable amount of means of production. Each household owns 6,021 yuan worth of fixed assets for production purposes and 75 head of cattle. For every 100 households, there are nine motor vehicles, six tractors, three power-driven threshers, and 12 horse-drawn carts. The average per-capita material consumption of farmers and herdsmen has increased enormously compared with the period before the liberation of Tibet. In 1991, the per-capita consumption of grain was 183.6 kg. Other figures were 3.6 kg for edible oil, 14.7 kg for meat and 50 kg for milk. While retaining their traditional diet, Tibetans have expanded it to also include more vegetables, eggs, wine, sweets and pastries. The living conditions of the people have improved markedly. According to statistics produced by the local government of old Tibet, of a population of 1 million in Tibet in 1950, some 900,000 lacked real housing. Currently, except for the pastoral areas, all households have fixed housing. In 1991, the per-capita floor space of city and township residents reached 13.7 square meters. In Gyangze County of Xigaze Prefecture, which has a population of 56,700, over 80 percent have moved into new dwellings, with a per-capita floor space of 40 square meters. The traditional way of life of the Tibetan people has been somewhat modernized. A sample survey shows that for every 100 urban households, there are 212 bicycles, 88 color televisions, 84 radio cassette recorders, 42 washing machines, 24 refrigerators and 26 cameras. The construction of various cultural facilities has increasingly enriched the ethical outlook and cultural life of Tibetan people.

Due to Tibet's extremely harsh natural conditions and its extremely backward social development in history, the level of economic development and the living standards of the people are still lower than the nation's average. In 1989, the government of Tibet Autonomous Region formulated the Strategic Ideas for the Economic and Social Development of Tibet. It has implemented the policy of opening up to the rest part of China and the outside world as well; exploring the regional, domestic and foreign markets; developing advantageous resources and stepping up development of key areas and key industries. The goal is to narrow as soon as possible the gap in economic development between Tibet and other areas of the nation in order to lay a solid foundation for the common prosperity of Tibetan and other ethnic groups.