{{Short description|Economic reforms in China since 1978}} {{Infobox Chinese | order = st | s = 改革开放 | t = 改革開放 | p = Gǎigé kāifàng | w = Kai<sup>3</sup>-ko<sup>2</sup> k'ai<sup>1</sup>-fang<sup>4</sup> | mi = {{IPAc-cmn|g|ai|3|g|e|2|-|k|ai|1|f|ang|4}} | j = Goi2-gaak3 hoi1-fong3 | y = Góigaak hōifong | ci = {{IPAc-yue|g|oi|2|g|aak|3|-|h|oi|1|f|ong|3}} | pic = 2011 深圳 莲花山顶－邓小平头像 - panoramio.jpg | piccap = Statue of Deng Xiaoping in [[Lianhuashan Park]] in [[Shenzhen]] }}
{{History of the People's Republic of China}}{{Neoconservatism in China|History}} '''Reform and opening-up''', also known as the '''Chinese economic reform''' or '''Chinese economic miracle''',<ref name=":28">{{cite journal |last1=Ray |first1=Alok |year=2002 |title=The Chinese Economic Miracle: Lessons to Be Learnt |url=https://www.jstor.org/stable/4412606 |journal=Economic and Political Weekly |volume=37 |issue=37 |pages=3835–3848 |issn=0012-9976 |jstor=4412606}}</ref><ref name=":29">{{cite web |last1=Harrison |first1=Virginia |last2=Palumbo |first2=Daniele |date=30 September 2019 |title=China anniversary: How the country became the world's 'economic miracle' |url=https://www.bbc.com/news/business-49806247 |access-date=26 December 2022 |website=BBC News}}</ref> refers to a variety of [[microeconomic reform|economic reforms]] in the [[People's Republic of China]] (PRC) that began in the late 20th century, after [[Mao Zedong]]'s death in 1976.
Guided by [[Deng Xiaoping]], who is often credited as the "General Architect", the reforms were launched by the ruling [[Chinese Communist Party]] (CCP) on December 18, 1978 at the [[third plenary session of the 11th Central Committee of the Chinese Communist Party|third plenary session of the 11th CCP Central Committee]], during the ''[[Boluan Fanzheng]]'' period. In 1979, Deng launched the [[Four Modernizations]], aiming to modernize [[Economy of China|China's economy]]. [[History of the People's Republic of China#Political reforms|A parallel set of political reforms]] were launched by Deng and his allies in the 1980s, but ended with the [[1989 Tiananmen Square protests and massacre]], halting further political liberalization. The economic reforms were revived after [[Deng Xiaoping's southern tour]] in 1992.<ref name=":31">{{Cite web |date=2018-11-14 |author-last1=Guo |author-first1=Rui|author-first2=Josephine |author-last2=Ma|title=The inside story of the propaganda fightback for Deng's reforms |url=https://www.scmp.com/news/china/politics/article/2173020/inside-story-propaganda-fightback-deng-xiaopings-market-reforms |url-status=live |archive-url=https://web.archive.org/web/20181113163123/https://www.scmp.com/news/china/politics/article/2173020/inside-story-propaganda-fightback-deng-xiaopings-market-reforms |archive-date=2018-11-13 |access-date=2020-05-01 |website=[[South China Morning Post]] |language=en}}</ref> Reform and opening up gradually became the main component of [[socialism with Chinese characteristics]], constituting [[Deng Xiaoping Theory]], and was incorporated into the [[Constitution of the Chinese Communist Party|CCP constitution]] in 1997 and written into the [[Constitution of China|state constitution]] in 1999.
Reform and opening up is a major decision and turning point in the [[history of the People's Republic of China]]. It began after the [[Cultural Revolution]], and changed the planned economic model of China to what is officially termed as a [[socialist market economy]]. The reforms de-[[Collective farming|collectivized agriculture]], abolished the [[People's commune|people's communes]], relaxed price controls, allowed [[Foreign direct investment in China|foreign direct investment]] into China, and led to the creation of [[Special economic zones of China|special economic zones]], most prominently the [[Shenzhen Special Economic Zone]] and the [[Pudong|Shanghai Pudong New Area]]. Private enterprises were allowed to grow, while many [[State-owned enterprises of China|state-owned enterprises]] were scaled down or privatized. [[Shanghai Stock Exchange]] and the [[Shenzhen Stock Exchange]] were established in 1990, allowing a [[capital market]] system, while China joined the [[Asia-Pacific Economic Cooperation]] in 1991 and the [[World Trade Organization]] in 2001.
The reforms led to significant economic growth for China within the successive decades; this phenomenon has since been seen as an "economic miracle".<ref name=":28" /><ref name=":29" /><ref>{{Cite book |last1=Lin |first1=Justin Yifu |url=https://www.jstor.org/stable/j.ctv1fj84hd |title=The China Miracle: Development Strategy and Economic Reform |last2=Cai |first2=Fang |last3=Li |first3=Zhou |date=2003 |edition=Revised |publisher=The Chinese University of Hong Kong Press |jstor=j.ctv1fj84hd |isbn=978-962-201-985-0}}</ref><ref>{{Cite book |last=Nayar |first=Baldev Raj |author-link=Baldev Raj Nayar |url=https://academic.oup.com/book/7636/chapter-abstract/152671355?redirectedFrom=fulltext |title=The Geopolitics of Globalization: The Consequences for Development |date=December 2007 |publisher=[[Oxford University Press]] |isbn=9780195672022 |pages=181–216 |language=en |chapter=Chapter 10 China's Economic Miracle}}</ref> The reforms turned China from one of the poorest countries in the world to an [[Upper middle income country|upper-middle income country]], while significantly reducing poverty and increasing wealth; between 1978 and 2018, China reduced extreme poverty by 800 million. The economic growth resulting from the reforms also significantly increased China's global political and economic power, while establishing the country as the world's leading manufacturing power. China's economy has grown from $150 billion in 1978 to $18.74 trillion by 2024. In 2010, China overtook Japan as the [[List of countries by GDP (nominal)|world's second-largest economy]] by [[nominal GDP]],<ref>{{Cite news |last1=Barboza |first1=David |date=2010-08-15 |title=China Passes Japan as Second-Largest Economy |url=https://www.nytimes.com/2010/08/16/business/global/16yuan.html |access-date=2020-05-03 |work=The New York Times |language=en |issn=0362-4331}}</ref><ref>{{Cite news |date=2010-08-16 |title=China overtakes Japan as world's second-largest economy |url=https://www.theguardian.com/business/2010/aug/16/china-overtakes-japan-second-largest-economy |access-date=2020-05-03 |work=The Guardian |language=en |issn=0261-3077 |agency=Associated Press}}</ref> before overtaking the United States in 2016 as the [[List of countries by GDP (PPP)|world's largest economy]] by [[GDP (PPP)]].<ref>{{Cite book |last=Bergsten |first=C. Fred |author-link=C. Fred Bergsten |title=The United States vs. China : the quest for global economic leadership |date=2022 |isbn=978-1-5095-4735-7 |location=Cambridge |pages=86 |oclc=1255691875}}</ref>
== History of the reforms == The [[Chinese Communist Party]] (CCP) carried out the market reforms in two stages. The first stage, in the late 1970s and early 1980s, involved the de-[[Collective farming|collectivization of agriculture]], the opening up of the country to [[Foreign direct investment|foreign investment]], and permission for entrepreneurs to start businesses. However, a large percentage of industries remained state-owned. The second stage of reform, in the late 1980s and 1990s, involved the [[privatization]] and [[Chengbao system|contracting out]] of much state-owned industry. The 1985 lifting of [[price controls]] was a major reform,<ref name="longworth01">{{cite book |last1=Longworth |first1=John William |url=https://books.google.com/books?id=BcDCVX2w-7IC&pg=PA248 |title=Beef in China: Agribusiness Opportunities and Challenges |last2=Brown |first2=Colin G. |last3=Waldron |first3=Scott A. |date=2001 |publisher=University of Queensland Press |isbn=9780702232312 |page=248}}</ref> and the lifting of [[Protectionism|protectionist]] policies and regulations soon followed, although [[state monopolies]] in the [[commanding heights of the economy]] such as [[Banking in China|banking]] and [[Petroleum industry in China|petroleum]] remained.
In 2001, [[China and the World Trade Organization|China joined]] the [[World Trade Organization]] (WTO). Not long after, the [[private sector]] grew remarkably, accounting for as much as 70 percent of [[Historical GDP of the People's Republic of China|China's gross domestic product]] (GDP) by 2005.<ref name="Businessweek">{{cite news|last1= Engardio|first1= Peter|title= China Is a Private-Sector Economy|url= http://www.businessweek.com/stories/2005-08-21/online-extra-china-is-a-private-sector-economy|work= [[Bloomberg Businessweek]]|date= 21 August 2005|access-date= 30 September 2014|archive-url= https://web.archive.org/web/20140129143156/http://www.businessweek.com/stories/2005-08-21/online-extra-china-is-a-private-sector-economy|archive-date= 29 January 2014|url-status= dead}}</ref> From 1978 until 2013, significant growth occurred, with the economy increasing by 9.5% a year. [[Hu Jintao]] and [[Wen Jiabao]]'s [[Hu–Wen Administration|administration]] took a more conservative approach towards reforms, regulated and controlled the economy more heavily after 2005, reversing some reforms.<ref name="scissors">{{cite journal|last1= Scissors|first1= Derek|title= Deng Undone: The Costs of Halting Market Reform in China|journal= [[Foreign Affairs]]|date= May–June 2009|volume= 88|issue= 3|url= http://www.foreignaffairs.com/articles/64947/derek-scissors/deng-undone|access-date= 2014-09-30|archive-url= https://web.archive.org/web/20150421035402/http://www.foreignaffairs.com/articles/64947/derek-scissors/deng-undone|archive-date= 2015-04-21|url-status= live}}</ref>
=== Origin === Before Deng Xiaoping's reforms, China's economy suffered due to centrally planned policies, such as the [[Great Leap Forward]] and the [[Cultural Revolution]], resulting in stagnation, inefficiency, and poverty.<ref>{{Cite web|date=12 July 2023|title=Политика реформ и открытости в Китае |url=https://svoivkitae.com/politika-reform-i-otkrytosti|access-date=2023-07-12|website=Свои в Китае|language=ru}}</ref> Prior to the reforms, the Chinese economy was dominated by [[state ownership]] and central planning. From 1950 to 1973, Chinese real GDP per capita grew at a rate of 2.9% per year on average, albeit with major fluctuations.<ref name=":1">{{Cite book|title=The Chinese economy : transitions and growth|url=https://archive.org/details/chineseeconomytr00bnau|url-access=limited|last=Naughton|first=Barry|date=2007|publisher=MIT Press|isbn=978-0262640640|location=Cambridge, Mass.|pages=[https://archive.org/details/chineseeconomytr00bnau/page/n19 3]–5|oclc=70839809}}</ref> This placed it near the middle of the Asian nations during the same period,{{sfn|Walder|2015|pp=321}} with neighboring countries such as Japan, South Korea, Singapore and then rival [[Chiang Kai-shek]]'s Republic of China (ROC) outstripping mainland China's rate of growth.{{sfn|Brandt|2008|p=8}} Starting in 1970, the economy entered into a period of stagnation,{{sfn|Walder|2015|pp=322}} and after the death of [[Mao Zedong]], the CCP leadership decided to abandon [[Maoism]] and turn to market-oriented reforms to salvage the stagnant economy.{{sfn|Brandt|2008|pp=7–8}} In September 1976, [[Mao Zedong]] died, and in October, [[Hua Guofeng]] together with [[Ye Jianying]] and [[Wang Dongxing]] arrested the [[Gang of Four]], putting an end to the [[Cultural Revolution]]. Hua's break with Cultural Revolution era economic policies were consistent with the 1975 reform agenda of [[Deng Xiaoping]].<ref name="guofeng">{{Cite book |last=Weber |first=Isabella |author-link=Isabella Weber |doi=10.4324/9780429490125 |title=How China escaped shock therapy : the market reform debate |date=2021 |publisher=[[Routledge]] |isbn=978-0-429-49012-5 |location=Abingdon, Oxon |pages=106 |oclc=1228187814}}</ref> Hua made national economic development a matter of the highest priority and emphasized the need to achieve "liberation of productive forces".<ref name="guofeng" /> He "combined [[Industrialization in the Soviet Union|Soviet-style big push industrialization]] with an opening up to the capitalist world" and under his leadership, China opened its first [[Special economic zones of China|Special Economic Zone]] and launched major efforts to attract foreign direct investment.<ref name="guofeng" />
Economic reforms began in earnest during the "[[Boluan Fanzheng]]" period, especially after Deng and his reformist allies rose to power with Deng replacing Hua Guofeng as the [[paramount leader]] in December 1978.<ref>{{Cite news |last=Faison |first=Seth |date=1997-02-20 |title=DENG XIAOPING IS DEAD AT 92; ARCHITECT OF MODERN CHINA (Published 1997) |url=https://www.nytimes.com/1997/02/20/world/deng-xiaoping-is-dead-at-92-architect-of-modern-china.html |access-date=2021-01-12 |work=The New York Times |language=en-US |issn=0362-4331}}</ref><ref>{{Cite news |last=Eisenman |first=Joshua |title=Analysis {{!}} What we really know about China's Reform and Opening Up |url=https://www.washingtonpost.com/news/monkey-cage/wp/2018/11/15/what-we-really-know-about-chinas-reform-and-opening-up/ |access-date=2021-01-12 |newspaper=[[The Washington Post]] |language=en-US |issn=0190-8286}}</ref><ref>[[Ezra F. Vogel]], ''[[Deng Xiaoping and the Transformation of China]]'' (2011).</ref><ref>{{Cite web |date=2016-06-30 |title=关于"总设计师"称谓提法的来龙去脉 |trans-title=Details regarding the name of "General Architect" |url=http://cpc.people.com.cn/n1/2016/0630/c69113-28510283.html |url-status=live |archive-url=https://web.archive.org/web/20200712172334/http://cpc.people.com.cn/n1/2016/0630/c69113-28510283.html |archive-date=2020-07-12 |access-date=2021-01-12 |website=[[People's Daily|People's Net]] |language=zh}}</ref> By the time Deng took power, there was widespread support among the elite for economic reforms.<ref>{{Cite book |last1=Marquis |first1=Christopher |title=Mao and Markets: The Communist Roots of Chinese Enterprise |last2=Qiao |first2=Kunyuan |date=2022-11-15 |publisher=[[Yale University Press]] |isbn=978-0-300-26883-6 |doi=10.2307/j.ctv3006z6k |jstor=j.ctv3006z6k |s2cid=253067190 |author-link=Christopher Marquis}}</ref> From 1978 to 1992, Deng described reform and opening up as a "large scale experiment" requiring thorough "experimentation in practice" instead of textbook knowledge.<ref name=":42">{{Cite book |last=Heilmann |first=Sebastian |url= |title=Red Swan: How Unorthodox Policy-Making Facilitated China's Rise |date=2018 |publisher=[[The Chinese University of Hong Kong Press]] |isbn=978-962-996-827-4 |author-link=Sebastian Heilmann}}</ref>{{Rp|page=65}} As the ''de facto'' leader, Deng's policies faced [[1978 Truth Criterion Controversy|opposition from party conservatives]] but were extremely successful in increasing the country's wealth. Major reforms (including rural decollectivization, SOE reform, and rural health care reform) almost always began first as decentralized local experiments subject to intervention from high level Communist Party officials before they were more widely adopted.<ref name=":42" />{{Rp|page=6}}
===1979–1984=== {{See also|History of the People's Republic of China#Political reforms}} In 1979, Deng Xiaoping emphasized the goal of "[[Four Modernizations]]" and further proposed the idea of [[moderately prosperous society]].<ref>{{Cite web|date=21 November 2019|title=Meet "moderately prosperous" China|url=https://worldin.economist.com/article/17353/edition2020meet-moderately-prosperous-china|url-status=live|archive-url=https://web.archive.org/web/20200604040502/https://worldin.economist.com/article/17353/edition2020meet-moderately-prosperous-china |archive-date=2020-06-04 |access-date=2020-05-26|website=Economist|language=en}}</ref><ref>{{Cite web|date=2019-03-04|title=Commentary: Sprinting toward a moderately prosperous society|url=http://www.xinhuanet.com/english/2019-03/04/c_137868580.htm|url-status=dead|archive-url=https://web.archive.org/web/20190304175320/http://www.xinhuanet.com/english/2019-03/04/c_137868580.htm |archive-date=2019-03-04 |access-date=2020-05-26|website=[[Xinhuanet]]}}</ref><ref>{{Cite journal|last=Wong|first=John|date=1998-03-01|title=Xiao-kang: Deng Xiaoping's socio-economic development target for China|url=https://doi.org/10.1080/10670569808724309|journal=Journal of Contemporary China|volume=7|issue=17|pages=141–152|doi=10.1080/10670569808724309|issn=1067-0564|url-access=subscription}}</ref> The achievements of [[Lee Kuan Yew]] to create an economic success in [[History of Singapore|Singapore]] had a profound effect on the CCP leadership in China. Leaders in China made a major effort, especially under Deng Xiaoping, to emulate his policies of economic growth, entrepreneurship, and subtle suppression of dissent. Over the years, more than 22,000 Chinese officials were sent to Singapore to study its methods.<ref>{{cite news|first=C.|last=Buckley|title=In Lee Kuan Yew, China Saw a Leader to Emulate|url=https://sinosphere.blogs.nytimes.com/2015/03/23/in-lee-kuan-yew-china-saw-a-leader-to-emulate/|work=The New York Times|url-access=subscription|archive-date=March 24, 2015|archive-url=https://web.archive.org/web/20150324185135/https://sinosphere.blogs.nytimes.com/2015/03/23/in-lee-kuan-yew-china-saw-a-leader-to-emulate/|date=March 23, 2015}}</ref>
Generally, reforms in this period started with local experiments that were adopted and expanded elsewhere once their success had been demonstrated.<ref name=":0242">{{Cite book |last=Jin |first=Keyu |title=The New China Playbook: Beyond Socialism and Capitalism |date=2023 |publisher=Viking |isbn=978-1-9848-7828-1 |location=New York |author-link=Keyu Jin}}</ref>{{Rp|page=127}} Officials generally faced few penalties for experimenting and failing and those who developed successful programs received nation-wide praise and recognition.<ref name=":0242" />{{Rp|page=127}} The bottom-up approach of the reforms promoted by Deng, in contrast to the top-down approach of the [[Perestroika]] in the Soviet Union, is considered an important factor contributing to the success of China's economic transition.<ref>Cited by Susan L. Shirk in ''The Political Logic of Economic Reform in China'', University of California, Berkeley and Los Angeles, 1993. {{ISBN|0-520-07706-7}}</ref>
The first reforms [[History of agriculture in the People's Republic of China|began in agriculture]]. By the late 1970s, food supplies and production had become so deficient that government officials were warning that China was about to repeat the "[[Great Chinese Famine|disaster of 1959]]", the famines which killed tens of millions during the [[Great Leap Forward]].<ref>{{harvnb|Brandt|2008|p=8}}</ref> Deng responded by decollectivizing agriculture and emphasizing the [[household-responsibility system]], which divided the land of the [[people's commune]]s into private plots. Under the new policy, peasants were able to exercise formal control of their land as long as they sold a contracted portion of their crops to the government.<ref name="auto">{{Cite book|title=The World Transformed: 1945 to the Present|last1=Hunt|first1=Michael H.|isbn=9780312245832|pages=355|ol=OL3695802M|oclc=1151774819|lccn=2003101700|year=2004|url=https://archive.org/details/worldtransformed0000hunt/page/n5/mode/1up|location=Boston|publisher=Bedford/St. Martin's}}</ref> This move increased agricultural production by 25 percent between 1975 and 1985, setting a precedent for privatizing other parts of the economy.<ref name="auto" />
Reforms were also implemented in urban industry to increase productivity. A dual-price system was introduced, in which (State-owned enterprise reform 1979) state-owned industries were allowed to sell any production above the plan quota, and commodities were sold at both plan and market prices, allowing citizens to avoid the [[shortages]] of the Maoist era. Moreover, the adoption of Industrial Responsibility System 1980s further promote the development of state-owned enterprise by allowing individuals or groups to manage the enterprise by contract. Private businesses were allowed to operate for the first time since the CCP takeover, and they gradually began to make up a greater percentage of industrial output.<ref>{{harvnb|Brandt|2008|p=10}}</ref> Price flexibility was also increased, expanding the service sector.<ref name="Loren 11">{{harvnb|Brandt|2008|p=11}}</ref>
At the same time, in December 1978, Deng announced a new policy, the [[Open Door Policy]], to open the door to foreign businesses that wanted to set up in China.<ref name="bbc">{{cite web |url= https://news.bbc.co.uk/2/shared/spl/hi/asia_pac/02/china_party_congress/china_ruling_party/key_people_events/html/open_door_policy.stm |title= Open Door Policy |publisher= BBC |access-date= 2019-05-17 |archive-url= https://web.archive.org/web/20170725013350/http://news.bbc.co.uk/1/shared/spl/hi/asia_pac/02/china_party_congress/china_ruling_party/key_people_events/html/open_door_policy.stm |archive-date= 2017-07-25 |url-status= live }}</ref><ref>{{cite book |url=https://books.google.com/books?id=-ab47HrgioMC&pg=PA1 |title=The China-Hong Kong Connection: The Key to China's Open Door Policy|author= Yun-Wing Sung| publisher=Cambridge University Press |date=16 January 1992|isbn= 978-0521382458 }}</ref> For the first time since the [[Kuomintang]] era, the country was opened to [[foreign direct investment|foreign investment]]. Deng created a series of [[Special Economic Zones of the People's Republic of China|Special Economic Zones]], including [[Shenzhen]], [[Zhuhai]] and [[Xiamen]], for foreign investment that were relatively free of the bureaucratic regulations and interventions that hampered economic growth. These regions became engines of growth for the national economy.<ref name="Loren 11"/> On January 31, 1979, the [[Shekou|Shekou Industrial Zone]] of Shenzhen was founded, becoming the first experimental area in China to "open up".<ref name=":11">{{Cite web|date=2018-12-27|title=Unsung hero of China's opening up is star of Shenzhen museum|url=https://www.scmp.com/lifestyle/travel-leisure/article/2179330/unsung-hero-chinas-opening-40-years-ago-remembered-shenzhen|access-date=2020-09-05|website=South China Morning Post|language=en}}</ref><ref>{{Cite web|title=Shekou Industrial Zone — firsts in reform and opening-up|url=https://www.chinadaily.com.cn/regional/2016-10/09/content_27003052.htm|access-date=2020-09-05|website=[[China Daily]]}}</ref>
In July 1979, China adopted its first Law on Joint Venture Using Chinese and Foreign Investment.<ref name=":21">{{Cite book |last=Zhao |first=Suisheng |title=The dragon roars back : transformational leaders and dynamics of Chinese foreign policy |date=2023 |publisher=[[Stanford University Press]] |isbn=978-1-5036-3415-2 |location=Stanford, California |pages=54–55 |oclc=1332788951}}</ref> This law was effective in helping to attract and absorb foreign technology and capital from advanced countries like the United States, facilitated China's exports to such countries, and thereby contributed to China's subsequent rapid economic growth.<ref name=":21" /> In 1980, In alignment with Deng's pragmatism, he praised and substantially improved the reputation of Qing official [[Qishan (official)|Qishan]], who was formerly criticised for his pragmatic approach against the British in the [[First Opium War]].<ref>Polachek, James M. ''The Inner Opium War''. Harvard University Press, 1992, pp. 180–210.</ref>
The 1981 ''Several Decisions on Finding New Ways, Developing the Economy and Solving the Problem of Unemployment in the Cities'' described individually-owned businesses as "a necessary supplement to socialist state-owned businesses".<ref name=":123222">{{Cite book |last=Chen|first=Minglu|title=The Communist Party of China: Understanding the Durability of the World's Most Powerful Political Organization|date=2025|publisher=[[Cambridge University Press]]|isbn=978-1-009-66843-9|editor-last=Hillman|editor-first=Ben|edition=|location=New York|chapter=Co-Opting the Private Sector|doi=10.1017/9781009668385|editor-last2=Ji|editor-first2=Fengyuan}}</ref>{{Reference page|page=177}}
Under the leadership of [[Yuan Geng]], the "Shekou model" of development was gradually formed, embodied in its famous slogan ''[[Time is Money, Efficiency is Life]]'', which then widely spread to other parts of China.<ref name=":11" /><ref>{{Cite web|last=Cheong|first=Danson|date=2018-12-07|title=Shenzhen – from village to city of opportunities|url=https://www.straitstimes.com/asia/east-asia/shenzhen-birthplace-of-chinas-reforms|access-date=2020-09-05|website=The Straits Times|language=en}}</ref> In January 1984, Deng Xiaoping made his first inspection tour to Shenzhen and Zhuhai, praising the "[[Shenzhen speed]]" of development as well as the success of the special economics zones.<ref>{{Cite web|title=Jan 24–29,1984: Deng Xiaoping visits Shenzhen and Zhuhai – China – Chinadaily.com.cn|url=https://www.chinadaily.com.cn/china/19thcpcnationalcongress/2011-01/24/content_29715088.htm|access-date=2020-06-17|website=China Daily}}</ref><ref>{{Cite book|last=Yuan|first=Yiming|url=https://books.google.com/books?id=QpNcDgAAQBAJ&q=Deng+Xiaoping+1984+shenzhen+speed&pg=PA25|title=Studies on China's Special Economic Zones|date=2017-03-15|publisher=Springer|isbn=978-981-10-3704-7|language=en}}</ref> [[File:Hu Yaobang Bronze statue at Yaobang Cemetery.jpg|thumb|200x200px|[[Hu Yaobang]], then [[General Secretary of Chinese Communist Party|General Secretary of CCP]], played an important role in implementing the reforms together with [[Zhao Ziyang]], then [[Premier of the People's Republic of China|Premier of China]].]] Besides Deng Xiaoping himself, important high-ranking reformists who helped carry out the reforms include [[Hu Yaobang]], then [[General Secretary of Chinese Communist Party]], and [[Zhao Ziyang]], then [[Premier of China]].<ref>{{Cite web|date=2019-04-14|title=Hu Yaobang: an icon of China's reform – and of how little has changed|url=https://www.scmp.com/week-asia/opinion/article/3005932/mao-tiananmen-hu-yaobang-icon-chinas-reform-and-reminder-how|access-date=2021-01-12|website=South China Morning Post|language=en}}</ref><ref>{{Cite web|date=2015-01-14|title=Zhao Ziyang: The forgotten architect of China's economic reforms {{!}} DW {{!}} 14.01.2015|url=https://www.dw.com/en/zhao-ziyang-the-forgotten-architect-of-chinas-economic-reforms/a-18189721|url-status=live|archive-url=https://web.archive.org/web/20150820065657/http://www.dw.com/en/zhao-ziyang-the-forgotten-architect-of-chinas-economic-reforms/a-18189721 |archive-date=2015-08-20 |access-date=2021-01-12|publisher=[[Deutsche Welle]]|language=en-GB}}</ref> Other leaders who favored Deng's reforms include [[Xi Zhongxun]] (the father of [[Xi Jinping]]), [[Wan Li]], [[Hu Qili]] and others.<ref>{{Cite web|last=Hornby|first=Lucy|date=2018-11-15|title=Xi versus Deng, the family feud over China's reforms|url=https://www.ft.com/content/839ccb0c-e439-11e8-8e70-5e22a430c1ad|url-status=live|archive-url=https://web.archive.org/web/20181118071750/https://www.ft.com/content/839ccb0c-e439-11e8-8e70-5e22a430c1ad |archive-date=2018-11-18 |access-date=2021-01-12|website=[[Financial Times]]|language=en-GB}}</ref><ref>{{Cite web|title=Chinese reform politician Wan Li dies at 98|url=https://apnews.com/article/4f27c6724138455fa3e3d4d466c7c3f2|access-date=2021-01-12|website=AP NEWS|date=16 July 2015 }}</ref><ref>{{Cite web|title=Hu Qili Urged People Throughout Country to Help Change China With AM-China, Bjt|url=https://apnews.com/article/35aa6fca81ab24bc070d8010cf0f819d|access-date=2021-01-12|website=AP NEWS}}</ref> Another influential leader was [[Chen Yun]], regarded by some as the second most powerful person in China after Deng with more conservative ideology of the reforms.<ref>{{Cite journal|last=Bachman|first=David|year=1986|title=Differing Visions of China's Post-Mao Economy: The Ideas of Chen Yun, Deng Xiaoping, and Zhao Ziyang|url=https://www.jstor.org/stable/2644194|journal=Asian Survey|volume=26|issue=3|pages=292–321|doi=10.2307/2644194|jstor=2644194|issn=0004-4687|url-access=subscription}}</ref><ref name=":8">{{Cite news|last=Wudunn|first=Sheryl|date=1995-04-11|title=Chen Yun, a Chinese Communist Patriarch Who Helped Slow Reforms, Is Dead at 89 (Published 1995)|language=en-US|work=The New York Times|url=https://www.nytimes.com/1995/04/11/obituaries/chen-yun-a-chinese-communist-patriarch-who-helped-slow-reforms-is-dead-at-89.html|access-date=2021-01-12|issn=0362-4331}}</ref><ref name=":10">{{Cite news|title=CHEN YUN DIES|language=en-US|newspaper=[[The Washington Post]]|url=https://www.washingtonpost.com/archive/local/1995/04/11/chen-yun-dies/f1ff26a6-ed7c-4e4e-9505-34d66a5c5deb/|access-date=2021-01-12|issn=0190-8286}}</ref> Though Deng Xiaoping is credited as the architect of modern China's economic reforms, Chen was more directly involved in the details of its planning and construction, and led a force that opposed many of the reforms from Deng's side.<ref name=":8" /><ref name=":12">{{Cite journal|last=Sullivan|first=Lawrence R.|year=1988|title=Assault on the Reforms: Conservative Criticism of Political and Economic Liberalization in China, 1985–86|url=https://www.jstor.org/stable/654442|journal=The China Quarterly|volume=114|issue=114|pages=198–222|doi=10.1017/S030574100002676X|jstor=654442|s2cid=154870609 |issn=0305-7410|url-access=subscription}}</ref> The two sides struggled over the general direction of the reforms until Chen died in 1995.<ref name=":8" /><ref name=":10" /><ref name=":12" /> A key feature of Chen's ideas was to use the market to allocate resources, within the scope of an overall plan. Some reforms of the early 1980s were, in effect, the implementation of a program that Chen had outlined in the mid-1950s. Chen called this the "[[birdcage economy]]".<ref>Exupoli. [http://sites.google.com/site/exupoli/Home/exupoli-community/birdcage-economy "Bird Cage Economics"] {{Webarchive|url=https://web.archive.org/web/20221208082727/https://sites.google.com/site/exupoli/Home/exupoli-community/birdcage-economy |date=2022-12-08 }}. ''Exupoli.net''.</ref><ref name=":9" /> According to Chen, "the cage is the plan, and it may be large or small. But within the cage the bird [the economy] is free to fly as he wishes."<ref name=":8" /><ref name=":9">{{Citation|last1=Coase|first1=Ronald|title=A Bird in the Cage: Market Reform under Socialism|year=2012|url=https://doi.org/10.1057/9781137019370_4|work=How China Became Capitalist|pages=68–103|editor-last=Coase|editor-first=Ronald|place=London|publisher=Palgrave Macmillan UK|language=en|doi=10.1057/9781137019370_4|isbn=978-1-137-01937-0|access-date=2021-01-12|last2=Wang|first2=Ning|editor2-last=Wang|editor2-first=Ning|url-access=subscription}}</ref> Chen and some other conservative leaders including [[Li Xiannian]] never visited Shenzhen, the leading special economic zone championed by Deng.<ref name=":9" />
===1984–1993=== {{See also|1986 Chinese student demonstrations|1989 Tiananmen Square protests and massacre|Deng Xiaoping's southern tour}} [[File:Light_Show_of_Shenzhen_in_May_2019_(1).jpg|alt=|thumb|250x250px|Shenzhen, one of the first [[special economic zones of China]] and the "Silicon Valley of China".<ref>{{Cite web |last=Rivers |first=Matt |date=2018-11-23 |title=Inside China's Silicon Valley: From copycats to innovation {{!}} CNN Business |url=https://www.cnn.com/2018/11/22/tech/china-tech-innovation-shenzhen/index.html |access-date=2022-09-19 |publisher=[[CNN]] |language=en}}</ref><ref>{{Citation |title=The rise of China's 'Silicon Valley' – CNN Video |date=19 November 2018 |url=https://www.cnn.com/videos/business/2018/11/19/shenzhen-china-innovation.cnn-business |access-date=2020-05-25}}</ref><ref>{{Cite web |date=October 18, 2021 |title=A $30 Billion Fortune Is Hiding in China's Silicon Valley |url=https://www.bloomberg.com/news/features/2021-10-18/inside-china-s-silicon-valley-villagers-go-from-rags-to-real-estate-riches |access-date= |publisher=Bloomberg L.P.}}</ref><ref>{{Cite web |title=Xinhua Headlines: The rise of China's Silicon Valley |url=http://www.xinhuanet.com/english/2019-12/19/c_138643548.htm |url-status=dead |archive-url=https://web.archive.org/web/20191219150648/http://www.xinhuanet.com/english/2019-12/19/c_138643548.htm |archive-date=December 19, 2019 |access-date=2020-05-25 |agency=[[Xinhua News Agency]]}}</ref> Notable high-tech companies such as [[Huawei]], [[ZTE]] and [[Konka Group|Konka]] were all founded in Shenzhen in the 1980s.]] In October 1984, the Party adopted its ''Decision on the Reform of the Economic System'', marking a major shift in the thinking of Chinese policymakers with regard to market mechanisms.<ref name=":32">{{Cite book |last=Liu |first=Zongyuan Zoe |title=Sovereign Funds: How the Communist Party of China Finances its Global Ambitions |publisher=The Belknap Press of [[Harvard University Press]] |year=2023 |isbn=9780674271913 |pages=}}</ref>{{Rp|pages=39–40}} The ''Decision'' acknowledged that a planned economy was not the only way to develop socialism and that prior policies restricting the commodity economy had hindered socialist development.<ref name=":32" />{{Rp|page=40}} After the ''Decision'', reform focused on building a socialist planned commodity economy with Chinese characteristics.<ref name=":32" />{{Rp|page=40}}
Controls on private businesses and government intervention continued to decrease, notably in the agrifood sector which saw relaxation of [[price controls]] in 1985<ref name="longworth01" /> and the establishment of the [[household responsibility system]], and there was small-scale privatization of state enterprises which had become unviable. A notable development was the [[decentralization]] of state control, leaving local provincial leaders to experiment with ways to increase economic growth and privatize the state sector.<ref name="Loren 17-18">{{harvnb|Brandt|2008|pp=17–18}}</ref> [[Township and village enterprises]], firms nominally owned by local governments but effectively private, began to gain market share at the expense of the state sector.<ref name="Rawski 573" /> With the help of [[Yuan Geng]], the first [[Joint-stock company|joint-stock]] [[commercial bank]] in China, the [[China Merchants Bank]], and the first joint-stock insurance company in China, the [[Ping An Insurance]], were both established in [[Shekou]]. In May 1984, fourteen coastal cities in China including Shanghai, [[Guangzhou]] and [[Tianjin]] were named "[[Special economic zones of China#List of the SEZs and Open Coastal Cities|Open Coastal Cities]] (沿海开放城市)".<ref>{{Cite news |last=Lee |first=Dinah |date=1984-11-25 |title=China's Coastal Cities Seek Foreign Investors |language=en-US |newspaper=The Washington Post |url=https://www.washingtonpost.com/archive/business/1984/11/25/chinas-coastal-cities-seek-foreign-investors/fe6d6528-40d5-4edc-a7ec-2e7e906543e9/ |access-date=2022-09-19 |issn=0190-8286}}</ref><ref>{{Cite journal |last=Yang |first=Dali L. |year=1991 |title=China Adjusts to the World Economy: The Political Economy of China's Coastal Development Strategy |url=https://www.jstor.org/stable/2760362 |journal=Pacific Affairs |volume=64 |issue=1 |pages=42–64 |doi=10.2307/2760362 |jstor=2760362 |issn=0030-851X|url-access=subscription }}</ref>
In 1985, a [[dual-track price system]] was adopted, in which the price of commodities within the planning system were set by the state while the prices of commodities outside it were set by market systems.<ref name=":44">{{cite book |last=Gewirtz|first=Julian|title=Never Turn Back: China and the Forbidden History of the 1980s|publisher=[[Harvard University Press]]|year=2022|isbn=9780674241848|doi=10.4159/9780674287372|jstor=j.ctv2zfjdkp}}</ref>{{Rp|pages=90}} A significant economic debate during this period concerned the approach to price liberalization and whether China should adopt an approach consistent with [[Shock therapy (economics)|shock therapy]]—sudden price liberalization – or a more gradual approach.<ref name="guofeng" /> But in 1986, the latter approach won out.<ref name=":20" /> "Confronted with the diverse, authoritative warnings about the unforeseeable risks of imposing the shock of price reform and the uncertainty about its benefits," Premier [[Zhao Ziyang]] and the leadership ultimately rejected shock price reform.<ref name=":20" /> Zhao had accepted the argument that the basic concern in economic reform was energizing enterprises.<ref name=":20" /> By late summer, what started under the rubric of "coordinated comprehensive package reform" had been diluted to an adjustment in the price of steel (although its price was both important had carried symbolic weight) as well as partial tax and financial reform.<ref name=":20" /> Radical price reform again became a focus in 1988, leading to an attempted [[1988 price reform in China|price reform]], and this time led to spiraling inflation (the first time it had done so since the 1940s) as well as a backlash that included local protests, bank runs, and panic buying.<ref name="guofeng" /> The Chinese leadership halted these price liberalization plans in fall 1988 and instead focused on austerity, price reform, and retrenchment.<ref name="guofeng" /> [[File:Time is money, Efficiency is life.jpg|left|thumb|200x200px|The slogan "[[Time is Money, Efficiency is Life]]" from [[Shekou, Shenzhen]], representing the "[[Shenzhen speed]]"]]
Corruption and increased inflation increased discontent, contributing to the 1989 Tiananmen Square protests and massacre and a conservative backlash after that event which ousted several key reformers and threatened to reverse many of Deng's reforms.<ref name="Naughton, Barry 2008, 105">{{harvnb|Naughton|2008|p=105}}</ref><ref name=":30">{{cite web |last=Wu |first=Wei |date=2015-06-04 |title=Why China's Political Reforms Failed |url=https://thediplomat.com/2015/06/why-chinas-political-reforms-failed/ |url-status=live |archive-url=https://web.archive.org/web/20230413104706/https://thediplomat.com/2015/06/why-chinas-political-reforms-failed/ |archive-date=2023-04-13 |access-date=2020-05-03 |website=[[The Diplomat (magazine)|The Diplomat]]}}</ref><ref>{{Cite news |last1=Mitter |first1=Rana |last2=Johnson |first2=Elsbeth |date=2021-05-01 |title=What the West Gets Wrong About China |url=https://hbr.org/2021/05/what-the-west-gets-wrong-about-china |access-date=2024-03-24 |work=Harvard Business Review |issn=0017-8012}}</ref> The events of 1988 and 1989 led to the imprisonment or exile of many reformist officials.<ref name="guofeng" /> However, Deng stood by his reforms and in 1992, he affirmed the need to continue reforms in his [[Deng Xiaoping's Southern Tour|southern tour]].<ref name="Naughton 114">{{harvnb|Naughton|2008|p=114}}</ref> Thanks to his encouragement, in November 1990 the [[Shanghai Stock Exchange]] was reopened after being closed by Mao 40 years earlier, while the [[Shenzhen Stock Exchange]] was also founded in December 1990.<ref>{{Cite journal |last=Walter |first=Carl E. |date=September 2014 |title=Was Deng Xiaoping Right? An Overview of China's Equity Markets |url=https://onlinelibrary.wiley.com/doi/10.1111/jacf.12075 |journal=Journal of Applied Corporate Finance |language=en |volume=26 |issue=3 |pages=8–19 |doi=10.1111/jacf.12075 |s2cid=153763863 |issn=1078-1196|hdl=10.1111/jacf.12075 |hdl-access=free |url-access=subscription }}</ref><ref>{{Cite web |title=An old man's ups and downs in China's stock market |url=http://ke.china-embassy.org/eng/old/gyzg/t516799.htm |url-status=dead |archive-url=https://web.archive.org/web/20200604043142/http://ke.china-embassy.org/eng/old/gyzg/t516799.htm |archive-date=2020-06-04 |access-date=2020-05-02 |website=Embassy of the People's Republic of China in the Republic of Kenya}}</ref>
In contrast to the approach of Deng, conservative elders led by [[Chen Yun]] called to strike a balance between too much laissez-faire market economy and retaining state control over key areas of the economy. Chen Yun helped preserve the economy by preventing policies that would have damaged the interests of special interest groups in the government bureaucracy.<ref name="Naughton 114" />
Although the economy grew quickly during this period, economic troubles in the inefficient [[state sector]] increased. Heavy losses had to be made up by state revenues and acted as a drain upon the economy.<ref>{{harvnb|Brandt|2008|p=22}}</ref> Inflation became problematic in 1985, 1988 and 1992.<ref name="Naughton, Barry 2008, 105"/> Privatizations began to accelerate after 1992, and the [[private sector]] grew as a percentage of GDP. China's government slowly expanded recognition of the private economy, first as a "complement" to the state sector (1988) and then as an "important component" (1999) of the [[socialist market economy]].<ref>{{harvnb|Brandt|2008|p=19}}</ref>
=== 1993–2005 === [[File:Shanghai_Skyline,_Dec2014.jpg|thumb|250x250px|The [[Lujiazui]] financial district of [[Pudong]], Shanghai, the financial and commercial hub of modern China|alt=]]In the 1990s, Deng allowed many radical reforms to be carried out. Deng also elevated reformer [[Zhu Rongji]] from Party secretary of Shanghai to Vice Premier in 1991, and later into [[Politburo Standing Committee]] in 1992. In 1993, the [[National People's Congress]] adopted the landmark Corporation Law.<ref name=":02">{{Cite book |last=Lin |first=Chun |title=The transformation of Chinese socialism |date=2006 |publisher=Duke University Press |isbn=978-0-8223-3785-0 |location=Durham [N.C.] |pages=259 |oclc=63178961}}</ref> It provides that in [[State-owned enterprise|state owned enterprises]], the state is no more than an investor and controller of stock and assets.<ref name=":02" /> Pursuant to the Corporation Law, private and foreign investment in such enterprises must be below 49%.<ref name=":02" /> The law also permitted state firms to declare bankruptcy in the event of business failure.<ref name=":02" />
In the beginning, Chen supported Deng, carried out and implemented many of the influential reforms that made a generation of Chinese richer. But later, Chen realized that the state still needed an active iron hand involvement in the market to prevent the private sector from becoming untamable. Chen's criticism of Deng's later economic reforms was widely influential within the CCP and was reflected in the policies of China's leaders after Deng. Chen's theories supported the efforts of [[Jiang Zemin]] and [[Hu Jintao]] to use state power to provide boundaries for the operation of the market, and to mediate the damage that capitalism can do to those who find it difficult to benefit from the free market. Chen's notion of the CPC as a "ruling party" was central to the redefinition of the role of the Party in Jiang Zemin's [[Three Represents]]. In 2005, on the occasion of the hundredth anniversary of Chen's birth, the Party press published, over the course of several weeks, the proceedings of a symposium discussing Chen's contributions to CCP history, theory and practice.<ref name="Naughton 114" />
Although Deng died in 1997, reforms continued under his handpicked successors, [[Jiang Zemin]] and [[Zhu Rongji]], who were ardent reformers who also abided by Chen Yun advice to keep the reforms steady and keep the state still in charge of key areas. In 1997 and 1998, large-scale [[privatization]] occurred, in which all state enterprises, except a few large monopolies, were liquidated and their assets sold to private investors. Between 2001 and 2004, the number of state-owned enterprises decreased by 48 percent.<ref name="Rawski 573">{{harvnb|Rawski|2008|p=573}}</ref> During the same period, Jiang and Zhu also reduced [[tariffs]], [[trade barriers]], and [[regulations]]; reformed the banking system; dismantled much of the Mao-era social welfare system; forced the Chinese army (PLA) to divest itself of military-run businesses;<ref>{{harvnb|Naughton|2008|p=116}}</ref> reduced inflation; and joined the [[World Trade Organization]]. These moves invoked discontent among some groups, especially laid-off workers of state enterprises that had been privatized.<ref>{{harvnb|Brandt|2008|p=128}}</ref>
The domestic private sector first exceeded 50% of GDP in 2005 and has further expanded since. Also in 1999, China was able to surpass [[economy of Japan|Japan]] as the largest economy in Asia by [[purchasing power parity]] (PPP) values.<ref name=8km>{{cite news|last1=Schoenleber|first1=H.|title=China's Private Economy Grows Up|url=http://8km.de/2006/19/|work=8km.de|date=23 September 2006|access-date=28 August 2010|archive-url=https://web.archive.org/web/20100831093144/http://8km.de/2006/19|archive-date=31 August 2010|url-status=live}}</ref> However, some state monopolies still remained, such as in petroleum and banking.<ref>{{cite news|url=http://www.chinadaily.com.cn/china/2006-12/19/content_762056.htm|url-status=live|title=China names key industries for state control|archive-url=https://web.archive.org/web/20171011040044/http://www.chinadaily.com.cn/china/2006-12/19/content_762056.htm|archive-date=11 October 2017|work=China Daily|date=19 December 2006|last=Zhao|first=Huanxin}}</ref>
===2005–2012=== CCP general secretary [[Hu Jintao]] and premier [[Wen Jiabao]] took a more conservative approach towards reforms, and began to reverse some of Deng Xiaoping's reforms in 2005. Observers note that the government adopted more egalitarian and populist policies.<ref>{{harvnb|Naughton|2008|p=129}}</ref> It increased subsidies and control over the health care sector,<ref>[http://www.time.com/time/world/article/0,8599,1890306,00.html "China's New Healthcare could cover millions more"] {{Webarchive|url=https://web.archive.org/web/20130826183344/http://www.time.com/time/world/article/0,8599,1890306,00.html |date=2013-08-26 }}, ''Time magazine''.</ref> increased funding for education, halted privatization,<ref name=scissors/> and adopted a loose monetary policy, which led to the formation of a U.S.-style property bubble in which property prices tripled.<ref>Chovanec, Patrick (2009-06-08). [http://www.feer.com/economics/2009/june53/Chinas-Real-Estate-Riddle "China's Real Estate Riddle"] {{Webarchive|url=https://web.archive.org/web/20090614235233/http://www.feer.com/economics/2009/june53/Chinas-Real-Estate-Riddle |date=2009-06-14 }}. ''Far East Economic Review''. Retrieved 13 March 2010.</ref> The privileged state sector was the primary recipient of government investment, which, under the new administration, promoted the rise of large "national champions" which could compete with large foreign corporations.<ref name=scissors/> Nevertheless, the share of SOEs in the total number of companies have continued to fall, dropping to 5%, though their share of total output remained at 26%. Exchange rates for the yuan were also liberalized and the peg to the [[United States dollar|U.S. dollar]] was broken, leading the yuan to rise by 31% against the dollar from 2005 to 2012.<ref name=":27">{{Cite news |last=Orlik |first=Tom |date=16 November 2012 |title=Charting China's Economy: 10 Years Under Hu |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/BL-CJB-16841 |access-date=7 June 2023}}</ref> China's economic growth has averaged around 10% under Hu, while the economy surpassed the United Kingdom, France, Germany and Japan.<ref>{{Cite news|url=https://www.bbc.com/news/business-12427321|title=China overtakes Japan as world's second-biggest economy|work=BBC News|date=February 14, 2011}}</ref><ref name=":27" />
===2012–2020=== Under CCP general secretary [[Xi Jinping]] and his [[Xi Jinping Administration|administration]], the CCP has sought numerous reforms, with the Third Plenum of the [[18th Central Committee of the Chinese Communist Party|18th Central Committee]] announcing that "market forces" would begin to play a "decisive" role in allocating resources.<ref name="brook2">{{cite news |last1=Kroeber |first1=Arthur R. |date=17 November 2013 |title=Xi Jinping's Ambitious Agenda for Economic Reform in China |work=[[Brookings Institution]] |url=http://www.brookings.edu/research/opinions/2013/11/17-xi-jinping-economic-agenda-kroeber |url-status=live |access-date=21 July 2014 |archive-url=https://web.archive.org/web/20140727211348/http://www.brookings.edu/research/opinions/2013/11/17-xi-jinping-economic-agenda-kroeber |archive-date=27 July 2014}}</ref> Xi launched the [[Shanghai Free-Trade Zone]] in August 2013, seen as part of the reforms.<ref>{{Cite news |last=Denyer |first=Simon |date=25 August 2013 |title=Creeping reforms as China gives Shanghai Free Trade Zone go-ahead |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/world/creeping-reforms-as-china-gives-shanghai-free-trade-zone-go-ahead/2013/08/25/95f66472-0bf7-11e3-89fe-abb4a5067014_story.html |access-date=4 January 2023}}</ref> He has additionally voiced support for SOEs,<ref>{{Cite news |last1=Wang |first1=Orange |last2=Leng |first2=Sidney |date=28 September 2018 |title=Chinese President Xi Jinping's show of support for state-owned firms 'no surprise', analysts say |work=[[South China Morning Post]] |url=https://www.scmp.com/economy/china-economy/article/2166261/chinese-president-xi-jinpings-show-support-state-owned-firms |access-date=31 January 2020}}</ref><ref name="Whyte-2021">{{Cite journal |last=Whyte |first=Martin K. |date=15 March 2021 |title=China's economic development history and Xi Jinping's "China dream:" an overview with personal reflections |journal=Chinese Sociological Review |volume=53 |issue=2 |pages=115–134 |doi=10.1080/21620555.2020.1833321 |issn=2162-0555 |s2cid=228867589|doi-access=free }}</ref> and under him, at least 288 firms have revised their corporate charters by 2017 to allow the CCP greater influence in corporate management, and to reflect the party line.<ref name=":0">{{Cite web|url=https://asia.nikkei.com/print/article/287096|title=Chinese enterprises write Communist Party's role into charters – Nikkei Asian Review|website=asia.nikkei.com|language=en|access-date=2017-08-18|archive-url=https://web.archive.org/web/20170818133405/https://asia.nikkei.com/print/article/287096|archive-date=2017-08-18|url-status=dead}}</ref> This trend also includes Hong Kong listed firms, who have traditionally downplayed their party links, but are now "redrafting bylaws to formally establish party committees that previously existed only at the group level."<ref name="JOE">{{Cite news|url=http://www.channelnewsasia.com/news/asiapacific/commentary-why-chinese-state-companies-are-getting-the-communist-9133736|title=Commentary: Why Chinese state companies are getting the Communist party's attention|publisher=Channel NewsAsia|access-date=2017-08-18|language=en|archive-url=https://web.archive.org/web/20170818024848/http://www.channelnewsasia.com/news/asiapacific/commentary-why-chinese-state-companies-are-getting-the-communist-9133736|archive-date=2017-08-18|url-status=live}}</ref> In other dimensions, according to [[Ray Dalio]], the Xi era has also been marked by economic opening, greater market-oriented decision-making and discontinuation of support for poorly managed state-owned enterprises.<ref name=":7">{{Cite web|last=Dalio|first=Ray|title=Principles by Ray Dalio|url=https://www.principles.com/the-changing-world-order/#chapter6Phase3Xi|access-date=2021-01-03|website=principles.com|language=en|archive-date=2021-01-06|archive-url=https://web.archive.org/web/20210106225316/https://www.principles.com/the-changing-world-order/#chapter6Phase3Xi|url-status=dead}}</ref>
Xi has increased the power of CCP bodies in economic decision-making, decreasing the influence of the State Council and the premier.<ref>{{Cite news |last=Mitchell |first=Tom |date=25 July 2016 |title=Xi's China: The rise of party politics |work=[[Financial Times]] |url=https://www.ft.com/content/57371736-4b69-11e6-88c5-db83e98a590a |url-status=live |url-access=subscription |access-date=31 January 2020 |archive-url=https://ghostarchive.org/archive/20221211221251/https://www.ft.com/content/57371736-4b69-11e6-88c5-db83e98a590a |archive-date=11 December 2022}}</ref> His administration made it easier for banks to issue [[Mortgage loan|mortgages]], increased foreign participation in the bond market, and increased the national currency [[renminbi]]'s global role, helping it to join [[International Monetary Fund|IMF's]] basket of [[Special drawing rights|special drawing right]].<ref>{{Cite news |last=Bradsher |first=Keith |date=4 March 2017 |title=China and Economic Reform: Xi Jinping's Track Record |language=en-US |work=[[The New York Times]] |url=https://www.nytimes.com/2017/03/04/business/china-xi-jinping-economic-reform-scorecard.html |url-status=live |url-access=limited |access-date=31 January 2020 |archive-url=https://web.archive.org/web/20170305071055/https://www.nytimes.com/2017/03/04/business/china-xi-jinping-economic-reform-scorecard.html |archive-date=5 March 2017 |issn=0362-4331}}</ref> His administration has also pursued a debt-deleveraging campaign, seeking to slow and cut the unsustainable amount of debt China has accrued during its economic growth.<ref>{{Cite web |last=Tran |first=Hung |date=14 March 2023 |title=China's debt-reduction campaign is making progress, but at a cost |url=https://www.atlanticcouncil.org/blogs/new-atlanticist/chinas-debt-reduction-campaign-is-making-progress-but-at-a-cost/ |website=[[Atlantic Council]]}}</ref>
Xi's administration has also reoriented the economy to increase self-reliance, and accordingly launched two campaigns; [[Made in China 2025]] and China Standards 2035, which have sought to scale up and displace US dominance in various high-tech sectors,<ref name=":7" /> though publicly China de-emphasized these plans due to the outbreak of a [[China–United States trade war|trade war]] with the U.S. in 2018.<ref>{{Cite news |last=Fifield |first=Anna |date=2 November 2018 |title=As China settles in for trade war, leader Xi emphasizes 'self reliance' |newspaper=[[The Washington Post]] |url=https://www.washingtonpost.com/world/asia_pacific/as-china-settles-in-for-trade-war-leader-xi-emphasizesself-reliance/2018/11/01/2961b2b2-d8de-11e8-9559-712cbf726d1c_story.html |access-date=31 January 2020}}</ref> This is alongside more aggressive pursuit of trade policies, in line with an outlook that sees China move towards taking a more active role in writing the rules of trade. The [[19th National Congress of the Chinese Communist Party|19th Party National Congress]] in 2017 declared that China and the CCP entered a "new era of socialism with Chinese characteristics" in 2012, which it said was both consistent with and significantly different from the past nearly 40 years of reform and opening up.<ref>{{Cite web |date=14 November 2017 |title=新时代是从什么时候开始的？ |trans-title=When did the new era begin? |url=http://www.ccdi.gov.cn/special/zmsjd/zm19da_zm19da/201711/t20171113_111651.html |url-status=live |archive-url=https://web.archive.org/web/20230205144147/http://www.ccdi.gov.cn/special/zmsjd/zm19da_zm19da/201711/t20171113_111651.html |archive-date=5 February 2023 |access-date=2025-11-10 |website=[[Central Commission for Discipline Inspection]] |language=en}}</ref>
Some analysts have also added that the reform era has been scaled down significantly during the leadership of Xi when the reformists lost power,<ref name=":22">{{Cite news |last1=Youwei |date=2019-06-04 |title=The End of Reform in China |url=https://www.foreignaffairs.com/articles/china/2015-06-04/end-reform-china |url-status=live |archive-url=https://web.archive.org/web/20190819134418/https://www.foreignaffairs.com/articles/china/2015-06-04/end-reform-china |archive-date=2019-08-19 |access-date=2019-08-19 |journal=Foreign Affairs: America and the World |language=en |issn=0015-7120}}</ref><ref name=":23">{{Cite web |last1=Tiezzi |first1=Shannon |date=2018-04-04 |title=Carl Minzner on China's Post-Reform Era |url=https://thediplomat.com/2018/04/carl-minzner-on-chinas-post-reform-era/ |url-status=live |archive-url=https://web.archive.org/web/20190819134417/https://thediplomat.com/2018/04/carl-minzner-on-chinas-post-reform-era/ |archive-date=2019-08-19 |access-date=2019-08-19 |website=The Diplomat |language=en}}</ref><ref name=":24">{{Cite web |date=2018-09-06 |title=China: Deng Xiaoping era ends with start of Xi era |url=http://www.ejinsight.com/20180906-china-deng-xiaoping-era-ends-with-start-of-xi-era/ |url-status=live |archive-url=https://web.archive.org/web/20190819134416/http://www.ejinsight.com/20180906-china-deng-xiaoping-era-ends-with-start-of-xi-era/ |archive-date=2019-08-19 |access-date=2019-08-19 |website=EJ Insight |language=en}}</ref> citing that Xi has reasserted state control over different aspects of Chinese society,<ref name=":25">{{Cite web |title=Chinese state tightens grip 40 years after Deng's reforms |url=https://asia.nikkei.com/Spotlight/Cover-Story/Chinese-state-tightens-grip-40-years-after-Deng-s-reforms |url-status=live |archive-url=https://web.archive.org/web/20190824115637/https://asia.nikkei.com/Spotlight/Cover-Story/Chinese-state-tightens-grip-40-years-after-Deng-s-reforms |archive-date=2019-08-24 |access-date=2019-08-23 |website=Nikkei Asian Review |language=en}}</ref> including the economy.<ref name=":1" /><ref name=":2">{{Cite news |last1=Westcott |first1=Ben |last2=Lee |first2=Lily |date=December 17, 2018 |title=China sparked an economic miracle — now there's a fight over its legacy |url=https://edition.cnn.com/2018/12/16/asia/deng-xiaoping-xi-jinping-reform-and-opening-china-intl/index.html |url-status=live |archive-url=https://web.archive.org/web/20190102050548/https://edition.cnn.com/2018/12/16/asia/deng-xiaoping-xi-jinping-reform-and-opening-china-intl/index.html |archive-date=January 2, 2019 |access-date=January 2, 2019 |work=[[CNN]] International Edition}}</ref><ref name=":26">{{Cite news |date=15 January 2019 |title=Xi Jinping's turn away from the market puts Chinese growth at risk |url=https://www.ft.com/content/3e37af94-17f8-11e9-b191-175523b59d1d |url-status=live |archive-url=https://web.archive.org/web/20190823113636/https://www.ft.com/content/3e37af94-17f8-11e9-b191-175523b59d1d |archive-date=2019-08-23 |access-date=2019-08-23 |website=Financial Times |language=en}}</ref>
===2020–present=== {{main|2020–2021 Xi Jinping Administration reform spree}}
Xi has circulated a policy called [[dual circulation]], meaning reorienting the economy towards domestic consumption while remaining open to foreign trade and investment.<ref>{{Cite news |last=Wei |first=Lingling |date=12 August 2020 |title=China's Xi Speeds Up Inward Economic Shift |language=en-US |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/chinas-xi-speeds-up-inward-economic-shift-11597224602 |access-date=13 August 2022 |issn=0099-9660}}</ref> Since 2021, his administration has formulated the [[three red lines]] policy that aimed to deleverage the heavily indebted property sector.<ref>{{Cite news |last1=Lin |first1=Andy |last2=Hale |first2=Thomas |last3=Hudson |first3=Hudson |date=8 October 2021 |title=Half of China's top developers crossed Beijing's 'red lines' |work=[[Financial Times]] |url=https://www.ft.com/content/d5803d64-5cc5-46f0-bed0-1bc207440f9c |url-status=live |url-access=subscription |access-date=11 August 2022 |archive-url=https://ghostarchive.org/archive/20221211221223/https://www.ft.com/content/d5803d64-5cc5-46f0-bed0-1bc207440f9c |archive-date=11 December 2022}}</ref>
In September 2020, the CCP announced that it would strengthen United Front work in the private sector by establishing more party committees in the regional federations of industry and commerce (FIC), and by arranging a special liaison between FIC and the CCP.<ref>{{cite web |last1= General Office of the CCP Central Committee | title= Opinions on Strengthening the United Front Work of Private Economy in the New Era |url= http://www.xinhuanet.com/politics/zywj/2020-09/15/c_1126497384.htm|access-date=15 September 2020|language=zh| website =Xinhua net |archive-url= https://web.archive.org/web/20201019064610/http://www.xinhuanet.com/politics/zywj/2020-09/15/c_1126497384.htm | archive-date=19 October 2020}}</ref>
Since 2021, Xi has promoted the term [[common prosperity]], a term which he defined as an "essential requirement of socialism", described as affluence for all and said entailed reasonable adjustments to excess incomes.<ref name="Caixin Global-2021">{{Cite web |date=19 October 2021 |title=Full Text: Xi Jinping's Speech on Boosting Common Prosperity – Caixin Global |url=https://www.caixinglobal.com/2021-10-19/full-text-xi-jinpings-speech-on-boosting-common-prosperity-101788302.html |access-date=11 August 2022 |website=[[Caixin Global]] |language=en}}</ref><ref>{{Cite news |last=Hass |first=Ryan |date=9 September 2021 |title=Assessing China's "common prosperity" campaign |language=en-US |work=[[Brookings Institution]] |url=https://www.brookings.edu/blog/order-from-chaos/2021/09/09/assessing-chinas-common-prosperity-campaign/ |access-date=11 August 2022}}</ref> Common prosperity has been used as the justification for [[2020–2021 Xi Jinping Administration reform spree|large-scale crackdowns and regulations]] towards the perceived "excesses" of several sectors, most prominently tech and tutoring industries.<ref>{{Cite news |last1=Shen |first1=Samuel |last2=Ranganathan |first2=Vidya |date=3 November 2021 |title=China stock pickers reshape portfolios on Xi's 'common prosperity' |language=en |work=[[Reuters]] |url=https://www.reuters.com/technology/china-stock-pickers-reshape-portfolios-xis-common-prosperity-2021-11-02/ |access-date=11 August 2022}}</ref>
== Ideologies of the reforms == During the ''[[Boluan Fanzheng]]'' period, [[Deng Xiaoping]] and [[Hu Yaobang]] launched the large-scale [[1978 Truth Criterion Controversy|1978 Truth Criterion Discussion]] and endorsed the ideology of "practice is the sole criterion for testing truth".<ref>{{Cite journal |last1=Schoenhals |first1=Michael |date=1991 |title=The 1978 Truth Criterion Controversy |journal=The China Quarterly |volume=126 |issue=126 |pages=243–268 |doi=10.1017/S0305741000005191 |issn=0305-7410 |jstor=654516 |s2cid=143503026}}</ref> The truth criterion discussion successfully helped Deng's reformist ideology win against [[Hua Guofeng]]'s governing philosophy [[Two Whatevers]] ("Whatever [[Chairman Mao]] said, we will say and whatever Chairman Mao did, we will do"), and as a result Deng replaced Hua as the new paramount leader of China at the [[3rd plenary session of the 11th Central Committee of the Chinese Communist Party|3rd plenary session of the 11th Central Committee of the CCP]] in December 1978, when the "Reform and Opening" of China officially began.<ref>{{Cite news |last=Denmark |first=Abraham |title=40 years ago, Deng Xiaoping changed China — and the world |url=https://www.washingtonpost.com/news/monkey-cage/wp/2018/12/19/40-years-ago-deng-xiaoping-changed-china-and-the-world/ |url-status=live |archive-url=https://web.archive.org/web/20190508043643/https://www.washingtonpost.com/news/monkey-cage/wp/2018/12/19/40-years-ago-deng-xiaoping-changed-china-and-the-world/ |archive-date=8 May 2019 |access-date=19 April 2021 |newspaper=[[The Washington Post]] |issn=0190-8286}}</ref><ref name=":022">{{Cite book |last=Tong |first=Qinglin |url=http://cpc.people.com.cn/GB/64162/82819/122016/index.html |title=回首1978——历史在这里转折 |publisher=[[People's Press (Beijing)|People's Press]] |year=2008 |isbn=9787010068954 |location=Beijing |language=zh |trans-title=Looking back at 1978—a turning point in history |archive-url=https://web.archive.org/web/20080511170617/http://cpc.people.com.cn/GB/64162/82819/122016/index.html |archive-date=2008-05-11 |url-status=dead}}</ref> At the same time, the truth criterion discussion also triggered the [[New Enlightenment (China)|New Enlightenment movement]] in mainland China which lasted over a decade, promoting [[democracy]], [[humanism]] and [[universal value]]s such as [[human rights]] and [[freedom]].<ref name=":6">{{Cite journal |last=Lei |first=Letian |date=2025-11-03 |title=Identifying China's Long 1980s |journal=The China Quarterly |volume=264 |language=en |pages=1112–1129 |doi=10.1017/S0305741025101471 |issn=0305-7410|doi-access=free }}</ref><ref name=":110">{{Cite book |last=Li |first=Huaiyin |url=https://academic.oup.com/hawaii-scholarship-online/book/15223/chapter-abstract/169722777?redirectedFrom=fulltext |title=Reinventing Modern China: Imagination and Authenticity in Chinese Historical Writing |date=October 2012 |publisher=[[University of Hawaiʻi Press]] |isbn=9780824836085 |chapter=6 Challenging the Revolutionary Orthodoxy: “New Enlightenment” Historiography in the 1980s}}</ref><ref name=":43">{{Cite journal |last=Chen |first=Yan |date=2007 |title=意识形态的兴衰与知识分子的起落—— "反右"运动与八十年代"新启蒙"的背景分析 |trans-title=The rise and fall of ideology and intellectuals—background analysis of the Anti-Rightist Campaign and the New Enlightenment in the 1980s |url=https://www.modernchinastudies.org/us/issues/past-issues/97-mcs-2007-issue-3/1017-2012-01-05-15-35-22.html |journal=[[Modern China Studies]] |volume=3}}</ref> The "thought liberation" encouraged by the Chinese government, though bounded by the [[Four Cardinal Principles]] proposed by Deng in 1979, subsequently became the bedrock for the reforms.<ref name=":43" /> [[Planned economy]] as well as the Maoist policies imposed during the [[Cultural Revolution]] were gradually dismantled, and the theory of a [[primary stage of socialism]] was proposed as the theoretical basis of the political report to the [[13th National Congress of the Communist Party of China|13th National Congress of the CCP]] held in 1987.<ref name="Schram-1988">{{cite journal |last=Schram |first=Stuart R. |date=1988 |title=China after the 13th Congress |journal=The China Quarterly |volume=114 |issue=114 |pages=177–197 |doi=10.1017/S0305741000026758 |issn=0305-7410 |jstor=654441 |s2cid=154818820}}</ref> [[File:Silk Road 1992 (4367437041) Market in Xinjiang, 1992.jpg|thumb|A market in [[Kashgar, Xinjiang]] in 1992, with a slogan on the left saying "adhere to Reform and Opening" and a slogan on the right saying "uphold the [[Four Cardinal Principles]]".]]However, the [[1989 Tiananmen Square protests and massacre]] ended both the [[History of the People's Republic of China#Political reforms|political reforms]] and the [[New Enlightenment (China)|New Enlightenment movement]] in China, sending the overall "Reform and Opening" program into stagnation.<ref name=":30" /><ref name=":43" /> Between 1989 and 1992, there were fears and concerns within the CCP that further reforms may turn China into a [[Capitalism|capitalist]] country, and the CCP new leadership under general secretary [[Jiang Zemin]] shifted its focus to preventing the [[Peaceful Evolution theory|Peaceful Evolution]] from [[Western world|the West]].<ref name=":31" /><ref name=":182" /> This was especially true after the [[Revolutions of 1989]] in [[Europe]] and around the time of the [[dissolution of the Soviet Union]] in 1991.<ref name=":182" /> In early 1992, then retired paramount leader Deng Xiaoping embarked on [[Deng Xiaoping's southern tour|his celebrated southern tour]], during which he, with strong support from the Chinese military, ordered that "those who do not promote reform should be brought down from their leadership positions".<ref name=":31" /><ref name=":182">{{Cite web |date=2012-12-03 |title=追忆邓小平：改革开放姓社不姓资 谁走回头路谁下台 |trans-title=Remembering Deng Xiaoping: reform and opening is socialist not capitalist, and whoever go backwards should step down |url=http://www.reformdata.org/2012/1203/15607.shtml |url-status=live |archive-url=https://web.archive.org/web/20220824021507/http://www.reformdata.org/2012/1203/15607.shtml |archive-date=2022-08-24 |access-date=2024-10-26 |website=China Reform Information Center}}</ref> Deng dissuaded people from debating over whether China was on a capitalist or socialist path, calling that "development is of overriding importance"; his pragmatic remarks reignited people's enthusiasm for economic reforms in mainland China, therefore resuming the "Reform and Opening" program.<ref name=":182" /><ref name=":210" /> Subsequently, Deng's [[Cat theory (Deng Xiaoping)|cat theory]] ("I don't care if the cat is black or white, so long as it catches mice") became an underlying ideology guiding the economic reforms, as a cornerstone of the [[socialism with Chinese characteristics]] and [[Deng Xiaoping Theory]].<ref name=":210">{{Cite news |date=2008-12-18 |title=The great pragmatist: Deng Xiaoping |url=https://www.theguardian.com/business/2008/dec/18/globaleconomy-economics |access-date=2020-05-01 |work=The Guardian |language=en-GB |issn=0261-3077}}</ref> Globally, China's reforms directly influenced the reform policies in [[Vietnam]] ([[Đổi Mới]]) and [[Laos]],<ref>{{Cite journal |last1=Kerkvliet |first1=Ben |last2=Chan |first2=Anita |last3=Unger |first3=Jonathan |date=1998 |title=Comparing the Chinese and Vietnamese Reforms: An Introduction |url=https://www.jstor.org/stable/2667451 |journal=The China Journal |issue=40 |pages=1–7 |doi=10.2307/2667451 |jstor=2667451 |issn=1324-9347|url-access=subscription }}</ref> whereas [[North Korea]] saw China's reforms as a source of political instability and social unrest, accusing China of following a [[Revisionism (Marxism)|revisionist path]].<ref>{{Cite web |date=April 6, 2009 |title=North Korean Attitudes Toward China: A Historical View of Contemporary Difficulties |url=https://www.wilsoncenter.org/event/north-korean-attitudes-toward-china-historical-view-contemporary-difficulties |access-date=2024-10-27 |website=[[Wilson Center]] |language=en}}</ref><ref>{{Cite web |last=Sang-Hun |first=Choe |date=2019-06-20 |title=上一次中国领导人访问朝鲜时，发生了什么？ |url=https://cn.nytimes.com/asia-pacific/20190620/china-north-korea-summit/ |access-date=2024-10-27 |website=[[The New York Times]] |language=zh}}</ref>
Meanwhile, the New Enlightenment in the 1980s did not proceed, as the academia and intellectual circle in mainland China became divided in the 1990s, forming two major [[School of thought|schools of thought]]: the [[Liberalism in China|''Liberalism'']] and the [[Chinese New Left|''New Left'']].<ref name=":402">{{Cite journal |last=Lei |first=Letian |date=2024-07-11 |title=The mirage of the alleged Chinese new left |journal=Journal of Political Ideologies |language=en |pages=1–22 |doi=10.1080/13569317.2024.2370972 |issn=1356-9317|doi-access=free }}</ref><ref name=":392">{{Cite journal |last=Xiao |first=Gongqin |author-link=Xiao Gongqin |date=2002 |title=新左派与当代中国知识分子的思想分化 |trans-title=The New Left and the Ideological Differentiation of Contemporary Chinese Intellectuals |url=https://www.modernchinastudies.org/cn/issues/past-issues/76-mcs-2002-issue-1/1219-2012-01-06-08-38-50.html |url-status=live |journal=[[Modern China Studies]] |issue=1 |archive-url=https://web.archive.org/web/20230511011858/https://www.modernchinastudies.org/cn/issues/past-issues/76-mcs-2002-issue-1/1219-2012-01-06-08-38-50.html |archive-date=11 May 2023}}</ref> The ''Liberalism'' school argued that China should continue its reform and opening, further developing [[market economy]] while pushing forward political reforms for human rights, freedom, democracy, [[rule of law]] and [[constitutionalism]]; high-ranking Chinese officials including Premier [[Zhu Rongji]] and Premier [[Wen Jiabao]] have expressed various degree of support over this view.<ref name=":6" /><ref name=":402" /><ref name=":392" /> On the other hand, the ''New Left'' argued that capitalism had become prevalent in mainland China with worsening [[Corruption in China|corruption]] and widening [[economic inequality]], which were common issues in the development of western capitalism, and therefore the ''New Left'' criticizes [[market mechanism]] and calls for [[social justice]] as well as equality, defending some of [[Mao Zedong]]'s policies during the Cultural Revolution.<ref name=":402" /><ref name=":392" /> The large-scale ''[[Xiagang]]'' (下岗) layoffs of the late 1990s, in which tens of millions of SOE workers lost stable employment and experienced steep decline in social status, became a central example for New Left's critique. For these thinkers, xiagang symbolized how marketization is responsible for corruption and disparity, and the betrayal of socialist-era guarantees of welfare and job security. Other schools of thought such as the [[Neoauthoritarianism (China)|neoauthoritarianism]] school also exist,<ref name=":392" /> and some scholars have also proposed the "[[China model|China Model]]" of development.<ref>{{Cite web |last1=Johnston |first1=Abby |last2=Trautwein |first2=Catherine |date=May 17, 2019 |title=What is the China Model? Understanding the Country's State-Led Economic Model |url=https://www.pbs.org/wgbh/frontline/article/china-trade-war-trump-tariff/ |access-date=2024-10-27 |website=FRONTLINE |language=en-US}}</ref>
== Effects of the reforms ==
===Economic performance=== [[File:Prc1952-2005gdp.gif|thumb|left|250px|China's nominal GDP trend from 1952 to 2015.]]
The success of China's economic policies and the manner of their implementation resulted in immense changes in Chinese society in the last 40 years, including greatly decreased poverty while both average incomes and [[Income inequality in China|income inequality]] have increased, leading to a backlash led by the more ideologically pure [[Chinese New Left|New Left]]. Between 1978 and 2018, China reduced extreme poverty by 800 million.<ref name=":03">{{Cite book |last=Jin |first=Keyu |author-link=Keyu Jin |title=The New China Playbook: Beyond Socialism and Capitalism |date=2023 |publisher=Viking |isbn=978-1-9848-7828-1}}</ref>{{Rp|page=23}}Scholars have debated the reason for the success of the Chinese [[Dual-track economy|"dual-track" economy]], and have compared it to attempts to reform socialism in the [[Eastern Bloc]] and the Soviet Union; as well as to the growth of other developing economies. Additionally, these series of reforms have led to China's status as a [[great power]] and a shift of international [[geopolitics|geopolitical]] interests towards China, especially in matters relating to the ambiguous [[political status of Taiwan]].
After three decades of reform, China's economy experienced one of the world's biggest booms. Agriculture and light industry have largely been privatized, while the state still retains control over some heavy industries. Despite the dominance of state ownership in finance, telecommunications, petroleum and other important sectors of the economy, private entrepreneurs continue to expand into sectors formerly reserved for public enterprise. Prices have also been liberalized.<ref>{{harvnb|Brandt|2008|p=3}}</ref>
China's economic growth since the reform has been very rapid, exceeding the [[Four Asian Tigers|East Asian Tigers]]. Since the beginning of Deng Xiaoping's reforms, China's GDP has grew from $150 billion in 1978 to $18.74 trillion by 2024.<ref>{{Cite web |title=GDP (current US$) – China |url=https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CN |url-status=live |archive-url=https://web.archive.org/web/20190906052638/https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=CN |archive-date=6 September 2019 |access-date=7 July 2023 |publisher=[[World Bank]]}}</ref><ref name="People's Daily Online 2005">''China has socialist market economy in place'' (People's Daily Online, 2005).</ref> The increase in [[total factor productivity]] (TFP) was the most important factor, with productivity accounting for 40.1% of the GDP increase, compared with a decline of 13.2% for the period 1957 to 1978—the height of Maoist policies. For the period 1978–2005, Chinese GDP per capita increased from 2.7% to 15.7% of U.S. GDP per capita, and from 53.7% to 188.5% of Indian GDP per capita. Per capita incomes grew at 6.6% a year.<ref>{{harvnb|Heston|2008|p=28}}</ref> Average wages rose sixfold between 1978 and 2005,<ref>{{harvnb|Cai|2008|p=184}}</ref> while absolute poverty declined from 41% of the population to 5% from 1978 to 2001.<ref>{{harvnb|Brandt|2008|p=2}}</ref> Some scholars believed that China's economic growth has been understated, due to large sectors of the economy not being counted.<ref>{{harvnb|Perkins|2008|p=834}}</ref>
===Impact on world growth=== China is widely seen as an engine of world and regional growth.<ref name="Branstetter 668">{{harvnb|Branstetter|2008|p=668}}</ref> Surges in Chinese demand account for 50, 44 and 66 percent of export growth of Hong Kong, Japan and Taiwan respectively, and China's trade deficit with the rest of East Asia helped to revive the economies of Japan and Southeast Asia.<ref name="Branstetter 668"/> Asian leaders view China's economic growth as an "engine of growth for all Asia".<ref name="Branstetter 669">{{harvnb|Branstetter|2008|p=669}}</ref>
===Effect on inequality=== {{See also|Social welfare in China}} [[File:Gini Coefficient World CIA Report 2009.png|thumb|350px| Gini-coefficient of national income distribution around the world (dark green: <0.25, red: >0.60)|alt=]]
Although the economic reforms has caused significant economic growth in China, it has also caused increased inequality, resulting in backlash and an attempt at pushing back the reforms by the [[Chinese New Left]] faction. Despite rapid economic growth which has virtually eliminated poverty in urban China and reduced it greatly in rural regions and the fact that living standards for everyone in China have drastically increased in comparison to the pre-reform era, the [[Gini coefficient]] of China is estimated to be above 0.45, comparable to some Latin American countries such as Argentina and Mexico as well as the United States.<ref>{{harvnb|Benjamin|2008|p=730}}</ref>
Increased inequality is attributed to the gradual withdrawal of the [[welfare state]] system in China and differences between coastal and interior provinces, the latter being burdened by a larger state sector.<ref>{{harvnb|Benjamin|2008|pp=730–731}}</ref> Some Western scholars have suggested that reviving the welfare state and instituting a re-distributive [[income tax]] system is needed to relieve inequality,<ref>{{harvnb|Benjamin|2008|p=774}}</ref> while some Chinese economists have suggested that privatizing state monopolies and distributing the proceeds to the population can reduce inequality.<ref name="Weiying Zhang">{{cite web |last=Weiying |first=Zhang |author-link=Zhang Weiying |date=17 February 2009 |url=http://finance.sina.com.cn/20090217/10345864499_3.shtml |title=Completely bury Keynesianism |website=finance.sina.com.cn |publisher=Sina Finance |archive-url=https://web.archive.org/web/20110511044923/http://finance.sina.com.cn/20090217/10345864499_3.shtml|archive-date=2011-05-11}}</ref>
==Reforms in specific sectors== ===Agriculture=== [[File:China-wheat-prod.png|left|thumb|300px|Production of wheat from 1961 to 2004. Data from [[FAO]], year 2005. Y-axis: Production in metric ton.]] During the pre-reform period, Chinese agricultural performance was average and food shortages were common.<ref name="Huang 478">{{harvnb|Huang|2008|p=478}}</ref> After Deng Xiaoping implemented the [[household responsibility system]], agricultural output increased by 8.2% a year, compared with 2.7% in the pre-reform period, despite a decrease in the area of land used.<ref name="Huang 478"/> [[Food prices]] fell nearly 50%, while agricultural incomes rose.<ref name="Huang 480">{{harvnb|Huang|2008|p=480}}</ref>
[[Zhao Ziyang]] wrote in his memoirs that in the years following the household contracting system, "the energy that was unleashed … was magical, beyond what anyone could have imagined. A problem thought to be unsolvable had worked itself out in just a few years time … [B]y 1984, farmers actually had more grain than they could sell. The state grain storehouses were stacked full from the annual procurement program."<ref name="guofeng" />
A fundamental transformation was the economy's growing adoption of [[cash crop]]s instead of just growing rice and grain.<ref name="Huang 480" /> Vegetable and meat production increased to the point that Chinese agricultural production was adding the equivalent of California's vegetable industry every two years. Growth in the sector slowed after 1984, with agriculture falling from 40% of GDP to 16%; however, increases in agricultural productivity allowed workers to be released for work in industry and services, while simultaneously increasing agricultural production.<ref>{{harvnb|Huang|2008|pp=481–482}}</ref> Trade in agriculture was also liberalized and China became an exporter of food, a great contrast to its previous famines and shortages.<ref>{{harvnb|Huang|2008|p=483}}</ref>
=== Housing === Housing was the first social policy-related sector to be marketized.<ref name=":1232223">{{Cite book |last=Bingqin|first=Li|title=The Communist Party of China: Understanding the Durability of the World's Most Powerful Political Organization|date=2025|publisher=[[Cambridge University Press]]|isbn=978-1-009-66843-9|editor-last=Hillman|editor-first=Ben|edition=|location=New York|chapter=Social Stability Through Responsive Social Policy|doi=10.1017/9781009668385|editor-last2=Ji|editor-first2=Fengyuan}}</ref>{{Reference page|page=247}} The government began this process by selling private housing, encouraging subsidized ownership, and then addressed rent reform.<ref name=":1232223" />{{Reference page|page=247}} Initial policies of selling private housing and subsidized ownership were not successful (there was a lack of public interest for purchasing private housing; employers were unhappy with the high subsidies required of them).<ref name=":1232223" />{{Reference page|page=248}} Rent reform was more effective, ultimately combining cash subsidies or vouchers (which gradually decreased over time) with permitting rent to be raised.<ref name=":1232223" />{{Reference page|page=248}}
In an effort to ease the transition to a marketized housing sector, various local governments implemented the New Policies for Newly Built Homes.<ref name=":1232223" />{{Reference page|page=249}} These policies required all newly-built homes to be sold on the market (as opposed to being purchased by employers) and precluded new school or university graduates from obtaining public housing, while older employees were able to continue with public housing.<ref name=":1232223" />{{Reference page|page=249}} These policies thus sought to focus on those who could afford paying higher rents and had not yet taken publicly provided housing as a given.<ref name=":1232223" />{{Reference page|page=249}}
===Industry=== In the pre-reform period, industry was largely stagnant and the socialist system presented few incentives for improvements in quality and productivity. With the introduction of the dual-price system and greater autonomy for enterprise managers, productivity increased greatly in the early 1980s.<ref>{{harvnb|Rawski|2008|p=572}}</ref> Foreign enterprises and newly formed [[Township and Village Enterprises]], owned by local government and often de facto private firms, competed successfully with state-owned enterprises. By the 1990s, large-scale privatizations reduced the market share of both the Township and Village Enterprises and state-owned enterprises and increased the private sector's market share. The state sector's share of industrial output dropped from 81% in 1980 to 15% in 2005.<ref name="Perkins 862">{{harvnb|Perkins|2008|p=862}}</ref> Foreign capital controls much of Chinese industry and plays an important role.<ref name="Rawski 573"/>
From virtually an industrial backwater in 1978, China is now the world's biggest producer of concrete, steel, ships and textiles, and has the world's largest [[Automobile industry in China|automobile market]]. Chinese steel output quadrupled between 1980 and 2000, and from 2000 to 2006 rose from 128.5 million tons to 418.8 million tons, one-third of global production.<ref name="Rawski, G. Thomas 2008">{{harvnb|Rawski|2008|p=593}}</ref> Labor productivity at some Chinese steel firms exceeds Western productivity.<ref name="Rawski, G. Thomas 2008"/> From 1975 to 1992, China's automobile production rose from 139,800 to 1.1 million, rising to 9.35 million in 2008.<ref>[https://www.nbcnews.com/id/wbna29022484 "China poised to be world’s largest auto market"] . NBC News. 2009-02-04.</ref> Light industries such as textiles saw an even greater increase, due to reduced government interference. [[Textile industry in China|Chinese textile]] exports increased from 4.6% of world exports in 1980 to 24.1% in 2005. Textile output increased 18-fold over the same period.<ref>{{harvnb|Rawski|2008|p=588}}</ref>
This increase in production is largely the result of the removal of barriers to entry and increased competition; the number of industrial firms rose from 377,300 in 1980 to nearly 8 million in 1990 and 1996; the 2004 economic census, which excluded enterprises with annual sales below RMB 5 million, counted 1.33 million manufacturing firms, with [[Jiangsu]] and [[Zhejiang]] reporting more firms than the nationwide total for 1980.<ref name="Loren 13"/> Compared to other East Asian industrial growth spurts, China's industrial performance exceeded Japan's but remained behind South Korea and Taiwan's economies.<ref>{{harvnb|Rawski|2008|p=570}}</ref>
===Trade and foreign investment=== [[File:2006Chinese exports.PNG|thumb|300px|Global distribution of Chinese exports in 2006 as a percentage of the top market]]
Foreign investment helped to greatly increase quality, knowledge and standards, especially in heavy industry. China's experience supports the assertion that [[globalization]] greatly increases wealth for poor countries.<ref name="Loren 13">{{harvnb|Brandt|2008|p=13}}</ref> Throughout the reform period, the government reduced tariffs and other trade barriers, with the overall tariff rate falling from 56% to 15%. By 2001, less than 40% of imports were subject to tariffs and only 9 percent of import were subject to licensing and import quotas. Even during the early reform era, protectionist policies were often circumvented by smuggling.<ref>{{harvnb|Branstetter|2008|pp=635–638}}</ref> When China joined the WTO, it agreed to considerably harsher conditions than other developing countries.<ref>{{harvnb|Branstetter|2008|p=655}}</ref> Trade has increased from under 10% of GDP to 64% of GDP over the same period.<ref>{{harvnb|Brandt|2008|pp=1–3}}</ref> China is considered the most open large country; by 2005, China's average statutory tariff on industrial products was 8.9%. The average was 30.9% for Argentina, 27.0% for Brazil, 32.4% for India, and 36.9% for Indonesia.<ref>{{harvnb|Branstetter|2008|p=656}}</ref>
China's trade surplus is considered by some in the United States as threatening American jobs. In the 2000s, the Bush administration pursued protectionist policies such as tariffs and quotas to limit the import of Chinese goods. Some scholars argue that China's growing trade surplus is the result of industries in more developed Asian countries moving to China, and not a new phenomenon.<ref name="Branstetter 669"/> China's trade policy, which allows producers to avoid paying the [[Value Added Tax]] (VAT) for exports and undervaluation of the currency since 2002, has resulted in an overdeveloped export sector and distortion of the economy overall, a result that could hamper future growth.<ref>{{harvnb|Branstetter|2008|p=676}}</ref>
Foreign investment was also liberalized upon Deng's ascension. [[Special Economic Zone]]s (SEZs) were created in the early 1980s to attract foreign capital by exempting them from taxes and regulations. This experiment was successful and SEZs were expanded to cover the whole Chinese coast. Although FDI fell briefly after the 1989 student protests, it increased again to 160 billion by 2004.<ref>{{harvnb|Branstetter|2008|pp=640–642}}</ref>
===Services=== [[File:Shanghaistockexchange.jpg|thumb|[[Shanghai Stock Exchange]] ]] [[File:Shenzhen stock exchange 2018 (40984942355).jpg|thumb|[[Shenzhen Stock Exchange]]]] In the 1990s, the financial sector was liberalized.<ref>Haggard, Stevens et al (2008), 339</ref> After China joined the [[World Trade Organization]] (WTO), the service sector was considerably liberalized and foreign investment was allowed; restrictions on retail, wholesale and distribution ended.<ref>{{harvnb|Branstetter|2008|p=657}}</ref> Banking, financial services, insurance and telecommunications were also opened up to foreign investment.<ref>{{harvnb|Branstetter|2008|pp=658–659}}</ref>
China's banking sector is dominated by four large state-owned banks, which are largely inefficient and monopolistic.<ref>{{harvnb|Allen|2008|p=522}}</ref> China's largest bank, [[Industrial and Commercial Bank of China|ICBC]], is the largest bank in the world. The financial sector is widely seen as a drag on the economy due to the inefficient state management.<ref>{{harvnb|Perkins|2008|p=866}}</ref> Non-performing loans, mostly made to local governments and unprofitable state-owned enterprises for political purposes,<ref>{{harvnb|Allen|2008|p=523}}</ref> especially the political goal of keeping unemployment low, are a big drain on the financial system and economy, reaching over 22% of GDP by 2000, with a drop to 6.3% by 2006 due to government recapitalization of these banks. In 2006, the total amount of [[non-performing loan]]s was estimated at $160 billion.<ref name="Allen 528">{{harvnb|Allen|2008|p=528}}</ref> Observers recommend privatization of the banking system to solve this problem, a move that was partially carried out when the four banks were floated on the stock market.<ref>{{harvnb|Allen|2008|p=530}}</ref> China's financial markets, the [[Shanghai Stock Exchange]] and [[Shenzhen Stock Exchange]], are relatively ineffective at raising capital, as they comprise only 11% of GDP.<ref>{{harvnb|Allen|2008|p=514}}</ref>
Due to the weakness of the banks, firms raise most of their capital through an informal, nonstandard financial sector developed during the 1980s and 1990s, consisting largely of underground businesses and private banks.<ref name="Allen 556">{{harvnb|Allen|2008|p=556}}</ref> Internal finance is the most important method successful firms use to fund their activities.<ref name="Allen 556"/>
By the 1980s much emphasis was placed on the role of advertising in meeting the modernization goals being promoted by Deng. Lip service was still paid to old Maoist ideals of egalitarianism, but it did not inhibit the growth of consumerism.<ref>Xin Zhao and Russell W. Belk, "Politicizing Consumer Culture: Advertising's Appropriation of Political Ideology in China's Social Transition," ''Journal of Consumer Research'' (2008) 35#2 pp 231–244</ref>
===Government finances=== In the pre-reform era, government was funded by profits from [[state-owned enterprises]], much like the [[Soviet Union]].<ref>{{harvnb|Wong|2008|p=431}}</ref> As the state sector fell in importance and profitability, government revenues, especially that of the central government in Beijing, fell substantially and the government relied on a confused system of inventory taxes. Government revenues fell from 35% of GDP to 11% of GDP in the mid-1990s, excluding revenue from state-owned enterprises, with the central government's budget at just 3% of GDP.<ref>{{harvnb|Wong|2008|p=440}}</ref> The tax system was reformed in 1994 when inventory taxes were unified into a single VAT of 17% on all manufacturing, repair, and assembly activities and an [[excise tax]] on 11 items, with the VAT becoming the main income source, accounting for half of government revenue. The 1994 reform also increased the central government's share of revenues, increasing it to 9% of GDP.<ref>{{harvnb|Wong|2008|p=434}}</ref>
== Academic studies ==
===Reasons for success=== {{See also|Foreign aid to China|Beijing Consensus}} [[File:Chinas Next Global Agenda Panel World Economic Forum 2013 (2).jpg|thumb|275x275px|Discussion of "China's Next Global Agenda" during the [[World Economic Forum]] (2013)]]
Scholars have proposed a number of theories to explain China's successful transition from a planned to a socialist market economy. This occurred despite unfavorable factors such as the troublesome legacies of socialism, considerable erosion of the work ethic, decades of anti-market propaganda, and the "lost generation" whose education disintegrated amid the disruption of the Cultural Revolution.<ref>{{Citation|title=The Chinese cultural revolution reconsidered: beyond purge and holocaust|author=Calhoun, Craig|author2=Wasserstrom, Jeffrey N.|editor=Law, Kam-yee|publisher=[[Palgrave Macmillan]]|year=2003|chapter=The Cultural Revolution and the Democracy Movement of 1989: Complexity in Historical Connections|isbn=978-0-333-73835-1|page=247|chapter-url=https://books.google.com/books?id=_vFnU_bqVh8C&pg=PA247|access-date=2011-10-20}}</ref>
One notable theory is that decentralization of state authority allowed local leaders to experiment with various ways to privatize the state sector and energize the economy.<ref name="Loren 17-18"/> Although Deng was not the originator of many of the reforms, he approved them. Another theory focuses on internal incentives within the Chinese government, in which officials presiding over areas of high economic growth were more likely to be promoted. This made local and provincial governments "hungry for investment," who competed to reduce regulations and [[market barrier|barrier]]s to investment to boost both economic growth and their careers. Such reforms were possible because Deng cultivated pro-market followers in the government.<ref>{{harvnb|Brandt|2008|pp=18–19}}</ref> [[Herman Kahn]] argued that [[Confucianism|Confucian ethic]] was playing a "similar but more spectacular role in the modernization of East Asia than the [[Protestant work ethic|Protestant ethic]] played in Europe".<ref>{{harvnb|Kahn|1979|pp=455}}</ref>
Taken together, [[Yuen Yuen Ang]] argues in ''Foreign Affairs'' that political reforms took place with economic reforms under Deng, except the former did not take Western forms. She writes, "To be sure, Deng's reforms emphasized brute [[capital accumulation]] rather than holistic development, which led to environmental degradation, inequality, and other social problems. Still they undoubtedly kicked China's growth machine into gear by making the bureaucracy results oriented, fiercely competitive, and responsive to business needs, qualities that are normally associated with democracies." But this only applies to the Deng era. Ang notes that since 2012, when Xi Jinping took over, the new leader has reversed Deng's political reforms and limits to power, "just as political freedoms have become imperative for continued economic growth."<ref>{{Cite news |last=Ang |first=Yuen Yuen |date=May–June 2018|title=Autocracy With Chinese Characteristics |work=Foreign Affairs |url=https://www.foreignaffairs.com/articles/asia/2018-04-16/autocracy-chinese-characteristics}}</ref>
[[File:Director-General Roberto Azevêdo met with China’s Minister of Commerce Gao Hucheng in Qingdao.jpg|left|thumb|[[Roberto Azevêdo]], [[Director-General of the World Trade Organization|Director-General of WTO]], met with China's Minister of Commerce [[Gao Hucheng]] in [[Qingdao]] (2014).]]
China's success is also due to the [[export-led growth]] strategy used successfully by the Four Asian Tigers beginning with [[Japanese post-war economic miracle|Japan in the 1960s–1970s]] and other [[Newly industrialized country|newly industrialized countries]].<ref name="sharma">{{cite journal|last1=Sharma|first1=Shalendra D.|title=China's Economic Transformation|journal=Global Dialogue|date=Winter–Spring 2007|volume=9|issue=1–2|url=http://www.worlddialogue.org/content.php?id=397|access-date=2014-09-30|archive-url=https://web.archive.org/web/20130513183520/http://www.worlddialogue.org/content.php?id=397|archive-date=2013-05-13|url-status=dead}}</ref> In 2001, China joined the World Trade Organization (WTO).<ref>{{Cite web|title=WTO {{!}} China – Member information|url=https://www.wto.org/english/thewto_e/countries_e/china_e.htm|access-date=2020-06-20|website=www.wto.org}}</ref> As of 2006, over 400 of the [[Fortune 500 companies]] had entered the [[Chinese market]], while at the same time a considerable number of Chinese companies had [[Go Out policy|opened their markets outside of China]].<ref>{{Cite web|last1=Zhang|first1=Jianping|last2=Liu|first2=Huan|date=2019-03-09|title=改革开放40年："引进来"与"走出去"|url=http://www.qstheory.cn/llqikan/2019-03/09/c_1124213820.htm|url-status=live|archive-url=https://web.archive.org/web/20210103055033/http://www.qstheory.cn/llqikan/2019-03/09/c_1124213820.htm|archive-date=2021-01-03|access-date=2020-06-19|website=[[Qiushi]]|language=zh}}</ref> Foreign aids to China, including those from Hong Kong, Macau and Taiwan, also played an important role.<ref name=":3">{{Cite web|last=Yuan|first=Xiaobin|title=发达国家对华援助"不手软"|url=http://view.163.com/special/reviews/aidtochina1219.html|url-status=live|archive-url=https://web.archive.org/web/20210103060832/http://view.163.com/special/reviews/aidtochina1219.html|archive-date=2021-01-03|access-date=2020-06-18|website=[[NetEase]]|language=zh}}</ref><ref name=":5" /><ref name=":4">{{Cite web|title=China {{!}} ForeignAssistance.gov|url=https://www.foreignassistance.gov/explore/country/China|access-date=2020-06-18|website=www.foreignassistance.gov|archive-date=2020-06-20|archive-url=https://web.archive.org/web/20200620100804/https://www.foreignassistance.gov/explore/country/China|url-status=dead}}</ref> Since the beginning of opening, China has received [[Foreign aid to China|a significant amount of aid]] from major [[developed countries]] such as the United States, Japan, Germany, France and the United Kingdom.<ref name=":3" /><ref name=":5">{{Cite web|date=2009-11-17|title=中国还需要发达国家的政府援助吗？|url=http://phtv.ifeng.com/program/yhyxt/200911/1117_1863_1439564.shtml|url-status=live|archive-url=https://web.archive.org/web/20210108174151/http://phtv.ifeng.com/program/yhyxt/200911/1117_1863_1439564.shtml|archive-date=2021-01-08|access-date=2020-06-18|publisher=[[Phoenix Television]]|language=zh}}</ref> For instance, through its [[Official Development Assistance (Japan)|Official Development Assistance]] (ODA), Japan had offered China various forms of assistance worth 3.65 trillion [[Japanese yen|Yen]] as of 2018.<ref name=":3" /><ref>{{Cite web|date=2018-10-23|title=Japan to discontinue development assistance projects for China: Taro Kono|url=https://www.japantimes.co.jp/news/2018/10/23/national/politics-diplomacy/japan-turn-off-oda-spigot-china-projects-sources-say/|access-date=2020-06-18|website=The Japan Times|language=en}}</ref> On the other hand, the assistance from the U.S. reached a total of US$556 million as of 2012, and has "helped [[Tibet Autonomous Region|Tibetan]] communities improve livelihoods, promote sustainable development and environmental conservation, and preserve cultural traditions...also supports targeted programs that strengthen cooperation on combatting the spread of [[HIV/AIDS]] and other pandemic and emerging diseases as well as [[rule of law]] programs."<ref name=":3" /><ref name=":4" />
In contrast to the neoliberal view which emphasizes benefits from decentralization, increased privatization, and globalization, Professor Lin Chun concludes that studies have demonstrated pre-reform period factors that are at least as compelling factors in China's success.<ref name=":20">{{Cite book |last=Lin |first=Chun |title=The transformation of Chinese socialism |date=2006 |publisher=[[Duke University Press]] |isbn=978-0-8223-3785-0 |location=Durham [N.C.] |page=2 |oclc=63178961}}</ref> Those factors include strong "human capital" accumulated through decades of state investments in basic needs including health care and public education, state and rural collective ownership of land, the [[public sector]]'s retaining of strategic industries, government sponsorship of trade and technology transfers, and public spending.<ref name=":20" />
The collapse of the Soviet Bloc and centrally planned economies in 1989 provided renewed impetus for China to further reform its economy through different policies to avoid a similar fate.<ref name=jdorn>{{cite journal|last1=Dorn|first1=James A.|title=Economic Development and Freedom: The Legacy of Peter Bauer|journal=Cato Journal|date=Fall 2002|volume=22|issue=2|url=http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2001/11/cj22n2-10.pdf|publisher=[[Cato Institute]]|access-date=2014-09-30|archive-url=https://web.archive.org/web/20141006092648/http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/2001/11/cj22n2-10.pdf|archive-date=2014-10-06|url-status=live}}</ref> China also wanted to avoid the Russian ad-hoc experiments with market capitalism under Boris Yeltsin resulting in the rise of powerful oligarchs, corruption, and the loss of state revenue which exacerbated economic [[Economic inequality|disparity]].<ref name=remnick>{{cite journal|last1=Remnick|first1=David|author-link1=David Remnick|title=Can Russia Change?|journal=[[Foreign Affairs]]|date=January–February 1997|volume=76|issue=1|pages=35–49|doi=10.2307/20047908|jstor=20047908|url=http://www.foreignaffairs.com/articles/52642/david-remnick/can-russia-change|access-date=2014-09-30|archive-url=https://web.archive.org/web/20140414050654/http://www.foreignaffairs.com/articles/52642/david-remnick/can-russia-change|archive-date=2014-04-14|url-status=live|url-access=subscription}}</ref>
The [[Cultural Revolution]] contributed to China's economic growth in long run. According to [[Mancur Olson]], the Cultural Revolution attacked the very administrators and managers on which Chinese economy depended, and the immediate result was instability and administrative chaos in short run. A longer-run result was that there were not nearly as many well-entrenched [[interest group]]s as in the Soviet Union and the [[Eastern Bloc]], so when [[Deng Xiaoping]] and the other pragmatists took power, few interest groups remained whose lobbying could undermine Deng's market-oriented reforms, because the Cultural Revolution had destroyed the narrowly entrenched interests with a stake in the ''status quo''.<ref>{{cite book |last1=Olson |first1=Mancur |title=Power and prosperity : outgrowing communist and capitalist dictatorships |date=2000 |publisher=Basic Books |location=New York |isbn=978-0465051960}}</ref>
===Comparison to other developing economies=== [[File:GDP per capita of China and India.svg|thumb|left|Development trends of Chinese and [[Hindu rate of growth|Indian GDP]] (1950–2010)]]
China's transition from a [[planned economy]] to a socialist market economy has often been compared with economies in Eastern Europe that are undergoing a similar transition. China's performance has been praised for avoiding the major shocks and inflation that plagued the [[Eastern Bloc]].<ref>{{harvnb|Svejnar|2008|p=68}}</ref> The Eastern bloc economies saw declines varying from 13% to 65% in GDP at the beginning of reforms, while Chinese growth has been very strong since the beginning of reform.<ref>{{harvnb|Svejnar|2008|p=74}}</ref> China also managed to avoid the hyperinflation of 200 to 1,000% that Eastern Europe experienced.<ref>{{harvnb|Svejnar|2008|p=76}}</ref> This success is attributed to the gradualist and decentralized approach of the Chinese government, which allowed market institutions to develop to the point where they could replace state planning. This contrasts with the [[Revolutions of 1989#Economic reforms|"big bang" approach]] of Eastern Europe, where the state-owned sector was rapidly privatized with employee buyouts, but retained much of the earlier, inefficient management.<ref>{{harvnb|Svejnar|2008|pp=69–70}}</ref> Other factors thought to account for the differences are the greater urbanization of the [[Commonwealth of Independent States|CIS]] economies and differences in social welfare and other institutions.<ref>{{harvnb|Svejnar|2008|p=72}}</ref> Another argument is that, in the Eastern European economies, political change is sometimes seen to have made gradualist reforms impossible, so the shocks and inflation were unavoidable.<ref>{{harvnb|Naughton|2008|p=96}}</ref>
China's economic growth has been compared with other developing countries, such as Brazil, Mexico, and India. GDP growth in China outstrips all other developing countries, with only India after 1990 coming close to China's experience.<ref name="Heston 37">{{harvnb|Heston|2008|p=37}}</ref> Scholars believe that high rates of investments, especially increases in capital invested per worker, have contributed to China's superior economic performance.<ref name="Heston 37"/> China's relatively free economy, with less government intervention and regulation, is cited by scholars as an important factor in China's superior performance compared to other [[developing countries]].<ref>{{harvnb|Heston|2008|p=46}}</ref>
===Criticism and development issues=== [[File:远眺陆家嘴-雾霾 Lujiazui in the haze - panoramio.jpg|thumb|[[Pollution in China|Air pollution]] has become a major environmental issue in China resulting from the economic development. (The picture shows thick [[haze]] in [[Lujiazui]] of Shanghai in 2011.)]] {{multiple image | total_width = 450 | image1 = 20210626 Variwide chart of greenhouse gas emissions per capita by country.svg | caption1 = Greenhouse gas emissions ''per person'' in the highest-emitting countries.<ref name=GlobalCarbonAtlas_Territorial_MtCO2>● Source for carbon emissions data: {{cite web |title=Territorial (MtCO<sub>2</sub>) / Emissions / Carbon emissions / Chart View |url=https://globalcarbonatlas.org/emissions/carbon-emissions/ |date=2024 |publisher=Global Carbon Atlas }}<br />● Source for country population data: {{cite web |title=Population 2022 |url=https://databankfiles.worldbank.org/public/ddpext_download/POP.pdf |publisher=World Bank |date=2024 }}</ref> Though China has the greatest total annual carbon dioxide emissions, the U.S. and a few other high-emitting countries exceed China in ''per capita'' emissions. | image2 = CO2 emission pie chart.svg | caption2 = Share of global carbon dioxide emissions, total for each country without regard to population size<ref>{{cite web |title=GHG emissions of all world countries |url=https://edgar.jrc.ec.europa.eu/report_2024 |publisher=Emissions Database for Global Atmospheric Research (EDGAR) |archive-url=https://web.archive.org/web/20250315145619/https://edgar.jrc.ec.europa.eu/report_2024 |archive-date=15 March 2025 |date=2024 |url-status=live}} (select "CO2 total emissions" from dropdown list). ● Link directly to [https://edgar.jrc.ec.europa.eu/report_2024?vis=co2tot#emissions_table table] (click on "CO2 total emissions").</ref> }} The government retains monopolies in several sectors, such as petroleum and banking. The recent reversal of some reforms have left some observers dubbing 2008 the "third anniversary of the end of reforms".<ref name=scissors/> Nevertheless, observers{{who|date=September 2013}} believe that China's economy can continue growing at rates of 6–8 percent until 2025,<ref>{{harvnb|Perkins|2008|p=879}}</ref> though a reduction in state intervention is considered by some to be necessary for sustained growth.<ref>{{harvnb|Perkins|2008|p=865}}</ref>
It has been reported, including by the [[National Bureau of Statistics of China|National Bureau of Statistics]], that over the years that the GDP figures and other economic data from local Chinese governments may be inflated or manipulated otherwise.<ref name=":15">{{Cite web |date=2019-06-20 |title=China's economic census uncovers more fake data |url=https://www.scmp.com/economy/china-economy/article/3015206/chinas-economic-census-undercovers-more-fake-data-officials |access-date=2021-05-20 |website=South China Morning Post |language=en}}</ref><ref name=":16">{{Cite web |title=Study Suggests That Local Chinese Officials Manipulate GDP |url=https://insights.som.yale.edu/insights/study-suggests-that-local-chinese-officials-manipulate-gdp |url-status=live |archive-url=https://web.archive.org/web/20200403105554/https://insights.som.yale.edu/insights/study-suggests-that-local-chinese-officials-manipulate-gdp |archive-date=2020-04-03 |access-date=2021-05-20 |website=[[Yale University]] |date=11 February 2020 |language=en}}</ref><ref name=":17">{{Cite web |last=Watts |first=Gordon |date=2019-10-18 |title=Fake figures cloud China's economic data |url=https://asiatimes.com/2019/10/fake-figures-could-cloud-chinas-economic-data/ |access-date=2021-05-20 |website=Asia Times |language=en-US}}</ref><ref>{{Cite news|title=China's GDP Growth Pace Was Inflated for Nine Years, Study Finds|url=https://www.bloomberg.com/news/articles/2019-03-08/china-s-gdp-growth-pace-was-inflated-for-nine-years-study-finds|url-status=live|access-date=2021-05-20|newspaper=Bloomberg.com|date=8 March 2019 |archive-url=https://web.archive.org/web/20190308232255/https://www.bloomberg.com/news/articles/2019-03-08/china-s-gdp-growth-pace-was-inflated-for-nine-years-study-finds |archive-date=2019-03-08 }}</ref><ref>{{Cite web|date=2020-10-25|title=Why China's dramatic economic recovery might not add up|url=http://www.theguardian.com/business/2020/oct/25/why-chinas-dramatic-economic-recovery-might-not-add-up|access-date=2021-05-20|website=The Guardian|language=en}}</ref> Officials from central government have said that local government officials sometimes falsify economic data to meet the economic growth targets or for personal promotions.<ref name=":15" /><ref>{{Cite web|last=Pham|first=Sherisse|date=2017-01-18|title=Chinese province admits falsifying economic data for years|url=https://money.cnn.com/2017/01/18/news/economy/china-province-falsified-economic-data/index.html|archive-url=https://web.archive.org/web/20170121134142/http://money.cnn.com/2017/01/18/news/economy/china-province-falsified-economic-data/index.html|url-status=dead|archive-date=January 21, 2017|access-date=2021-05-20|website=CNNMoney}}</ref>
Despite reducing poverty and increasing China's wealth, Deng's reforms have been criticized by the [[Chinese New Left]] for increasing inequality and allowing private entrepreneurs to purchase state assets at reduced prices. These accusations were especially intense during the [[Lang–Gu dispute]], in which New Left academic [[Larry Hsien Ping Lang]] accused entrepreneur Gu Sujung of usurping state assets, after which Gu was imprisoned.<ref>{{cite news|last=Wàn|first=Jìng|language=zh|url=http://news.hexun.com/2008-10-30/110671788.html|url-status=dead|script-title=zh:郎顾之争：一场远没有结束的论战|trans-title=The Lang-Gu debate: a debate that has not yet ended|archive-url=https://web.archive.org/web/20110723131341/http://news.hexun.com/2008-10-30/110671788.html|work=Hexun|archive-date=23 July 2011|date=30 October 2008}}</ref> The [[Hu–Wen Administration]] adopted some New Left policies, such as halting privatizations and increasing the state sector's importance in the economy, and [[Keynesian economics|Keynesian policies]] that have been criticized by some Chinese economists such as [[Zhang Weiying]], who advocate a policy of deregulation, tax cuts and privatization.<ref name="Weiying Zhang" />
Other criticisms focus on the effects of rapid industrialization on public health and the environment. For instance, China is the [[List of countries by carbon dioxide emissions|largest CO<sub>2</sub> emitter in the world]].<ref>{{Cite web |title=Each Country's Share of {{sic|CO|2|nolink=y|reason=error in source}} Emissions {{!}} Union of Concerned Scientists |url=https://www.ucsusa.org/resources/each-countrys-share-co2-emissions |access-date=2021-05-05 |website=www.ucsusa.org |language=en}}</ref> However, scholars believe that public health issues are unlikely to become major obstacles to the growth of China's economy during the coming decades, and studies have shown that air quality and other environmental measures in China are better than those in developed countries, such as the United States and Japan, at the same level of development.<ref>{{harvnb|Perkins|2008|pp=870–871}}</ref> Air pollution reached its peak in the early 2010s, and has declined significantly since then.<ref>{{Cite news |last1=Jayaram |first1=Kripa |last2=Kay |first2=Chris |last3=Murtaugh |first3=Dan |date=14 June 2022 |title=China Reduced Air Pollution in 7 Years as Much as US Did in Three Decades |work=[[Bloomberg News]] |url=https://www.bloomberg.com/news/articles/2022-06-14/china-s-clean-air-campaign-is-bringing-down-global-pollution#xj4y7vzkg |access-date=7 June 2023}}</ref><ref>{{Cite web |title=China has Quickly and Sharply Reduced Pollution Since Enacting Strict Policies |url=https://epic.uchicago.edu/insights/china-has-quickly-and-sharply-reduced-pollution-since-enacting-strict-policies/ |access-date=2023-06-07 |website=EPIC |language=en-US}}</ref>
Some scholars have also contested the claims that the reform has led to as dramatic reduction in poverty as reported. The dramatic reduction reported relies on the use of the [[World Bank]] poverty line of $1.90 per day, which some have argued is an inaccurate means of measuring poverty in [[History of the People's Republic of China (1949-1976)|pre-reform China]], as during the Mao era and the decade after its end, an effective and [[Iron rice bowl|far-reaching system of public provision]] existed in China which kept prices low, and a food rationing system which (except during the [[Great Chinese Famine]] years) effectively guaranteed the vast majority of China's population with access to food.<ref>Drèze, J., and Sen, A., 1989. Hunger and Public Action, p. 209. Oxford: Clarendon Press.</ref> Using China's "Basic Needs Poverty Line", calculated based on [[OECD]] datasets, the proportion of Chinese people unable to afford a "subsistence basket" (basic needs) has increased since the increasing pace of reforms in the late 1980s and 1990s.<ref>{{cite journal | doi=10.1080/13563467.2023.2217087 | title=Capitalist reforms and extreme poverty in China: Unprecedented progress or income deflation? |year=2023 | last1=Sullivan | first1=Dylan | last2=Moatsos | first2=Michail | last3=Hickel | first3=Jason | journal=New Political Economy | volume=29 | pages=1–21 | s2cid=259664228 | doi-access=free }}</ref><ref>Moatsos, M., 2021. Global extreme poverty: present and past since 1820. In: OECD, ed. How was life? Vol. II: new perspectives on well-being and global inequality since 1820. Paris: OECD Publishing, 186–212. </ref>
The economic reforms were initially accompanied with a series of [[History of the People's Republic of China#Political reforms|political reforms]] in the 1980s, supported by Deng Xiaoping. However, many of the planned political reforms ended after the [[1989 Tiananmen Square protests and massacre]].<ref>{{Cite news|last=Wang|first=Yuhua|title=Analysis {{!}} How has Tiananmen changed China?|language=en-US|newspaper=[[The Washington Post]]|url=https://www.washingtonpost.com/politics/2019/06/03/how-has-tiananmen-changed-china/|url-access=registration|archive-url=https://web.archive.org/web/20190604035830/https://www.washingtonpost.com/politics/2019/06/03/how-has-tiananmen-changed-china/|archive-date=4 June 2019|access-date=2021-05-05|issn=0190-8286}}</ref> Lack of political reform contributed to the serious [[Corruption in China|corruption issue in China]].<ref>{{Cite journal|last=He|first=Zengke|date=1 June 2000|title=Corruption and anti-corruption in reform China|url=https://online.ucpress.edu/cpcs/article-abstract/33/2/243/453/Corruption-and-anti-corruption-in-reform-China?redirectedFrom=PDF|journal=Communist and Post-Communist Studies|language=en|volume=33|issue=2|pages=243–270|doi=10.1016/S0967-067X(00)00006-4|issn=0967-067X|url-access=subscription}}</ref> Additionally, China's economic growth has led to the rise of a [[Chinese property bubble (2005–2011)|real estate bubble]] from 2005 to 2011 and a [[Chinese property sector crisis (2020–present)|property sector crisis]] since 2020.<ref name="wsj_11594908517">{{Cite news |last2=Bird |first1=Stella |last1=Yifan Xie |first2=Mike |date=2020-07-17 |title=The $52 Trillion Bubble: China Grapples With Epic Property Boom |language=en-US |work=[[The Wall Street Journal]] |url=https://www.wsj.com/articles/china-property-real-estate-boom-covid-pandemic-bubble-11594908517 |access-date=2021-05-05 |issn=0099-9660}}</ref>
Since the late 1970s, Deng and other senior leaders including Chen Yun and Li Xiannian supported the "[[one-child policy]]" to cope with the [[Human overpopulation|overpopulation crisis]].<ref>{{Cite journal|last=Greenhalgh|first=Susan|year=2005|title=Missile Science, Population Science: The Origins of China's One-Child Policy|url=https://www.jstor.org/stable/20192474|journal=The China Quarterly|volume=182|issue=182|pages=253–276|doi=10.1017/S0305741005000184|jstor=20192474|s2cid=144640139|issn=0305-7410|url-access=subscription}}</ref> However, the [[2010 Chinese census|2010 census data]] showed that the population growth rate dropped to low levels.<ref>{{Cite journal|last=Cai|first=Yong|date=2013-09-01|title=China's New Demographic Reality: Learning from the 2010 Census|journal=Population and Development Review|volume=39|issue=3|pages=371–396|doi=10.1111/j.1728-4457.2013.00608.x|issn=0098-7921|pmc=4302763|pmid=25620818}}</ref> Due to the financial pressure and other factors, many young couples increasingly choose to delay or even abandon the plan of raising a second child even after the Chinese government largely relaxed the one-child policy in late 2015.<ref>{{Cite web|date=3 Feb 2018|last=Zhou|first=C.|title=A look inside the struggles and benefits of China's 'little emperor' generation|url=https://www.abc.net.au/news/2018-02-03/the-struggles-and-benefits-of-chinas-little-emperor-generation/9323300|access-date=5 May 2021|publisher=Australian Broadcasting Corporation|language=en-AU}}</ref><ref name=":14">{{Cite web|title=How China's Demographic Time Bomb Threatens its Economy|url=https://knowledge.wharton.upenn.edu/article/chinas-one-child-policy/|url-status=live|access-date=2021-05-05|website=Wharton Business|language=en|archive-url=https://web.archive.org/web/20180821221149/http://knowledge.wharton.upenn.edu/article/chinas-one-child-policy/ |archive-date=2018-08-21 }}</ref><ref>{{Cite web|first=Jennifer|last=Pak|date=2020-10-09|title=Cost of child rearing in China hinders baby boom|url=https://www.marketplace.org/2020/10/09/china-one-child-policy-cost-of-raising-children-parents/|access-date=2021-05-05|website=Marketplace|language=en-US}}</ref> This has led to the aging of the Chinese population, which economists have said could potentially harm the economy in the future.<ref name=":14" /><ref>{{Cite news|last1=Myers|first1=Steven Lee|last2=Wu|first2=Jin|last3=Fu|first3=Claire|date=2019-01-17|title=China's Looming Crisis: A Shrinking Population|language=en-US|work=The New York Times|url=https://www.nytimes.com/interactive/2019/01/17/world/asia/china-population-crisis.html,%20https://www.nytimes.com/interactive/2019/01/17/world/asia/china-population-crisis.html|access-date=2021-05-05|issn=0362-4331}}</ref><ref name=":13">{{Cite web |date=2021-03-25 |title=Could China's population crisis be reaching a point of no return? |url=https://www.scmp.com/comment/opinion/article/3126752/could-chinas-population-crisis-be-reaching-point-no-return |access-date=2021-05-05 |website=South China Morning Post |language=en}}</ref>
==See also== * [[Go Out policy]] * [[History of the People's Republic of China#Political reforms|China's political reforms in 1980s]] * [[Japanese economic miracle]] * [[Khrushchev Thaw]] * [[Neoauthoritarianism (China)|Neoauthoritarianism]] * [[Seek truth from facts]] * [[Xiagang]] * [[Tiger economy]] * [[Infitah]] * [[Infiraj]]
== References == === Citations === {{Reflist}}
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== Further reading == * Gewirtz, Julian. 2022. ''[https://www.hup.harvard.edu/catalog.php?isbn=9780674241848 Never Turn Back: China and the Forbidden History of the 1980s]''. Belknap Press of [[Harvard University Press]].
== External links == * {{Wikiquote-inline}}
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