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Chinese economic reform

The Chinese economic reform or Chinese economic miracle,[1][2] also known domestically as reform and opening-up (Chinese: 改革开放; pinyin: Gǎigé kāifàng) or the opening of China in the West, refers to a variety of economic reforms termed "socialism with Chinese characteristics" and "socialist market economy" in the People's Republic of China (PRC) that began in the late 20th century. Guided by Deng Xiaoping, who is often credited as the "General Architect", the reforms were launched by reformists within the ruling Communist Party of China (CPC) on December 18, 1978, during the "Boluan Fanzheng" period.[3][4][5][6] The reforms briefly went into stagnation after the 1989 Tiananmen Square protests and massacre, but were revived after Deng Xiaoping's southern tour in 1992. The reforms led to significant economic growth for China within the successive decades; in 2010, China overtook Japan as the world's second-largest economy by nominal GDP[7][8] and in 2017 overtook the United States by becoming the world's largest economy by GDP (PPP).[9]

Chinese economic reform
Simplified Chinese改革开放
Traditional Chinese改革開放
Literal meaning"Reform and Opening-Up"

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 stemming from the Great Leap Forward and the Cultural Revolution.[10] This placed it near the middle of the Asian nations during the same period,[11] with neighboring capitalist 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.[12] Starting in 1970, the economy entered into a period of stagnation,[13] and after the death of Mao Zedong, the Communist Party leadership decided to abandon Maoism and turn to market-oriented reforms to salvage the stagnant economy.[14]

The Communist Party authorities carried out the market reforms in two stages. The first stage, in the late 1970s and early 1980s, involved the de-collectivization of agriculture, the opening up of the country to 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 contracting out of much state-owned industry. The 1985 lifting of price controls[15] was a major reform, and the lifting of protectionist policies and regulations soon followed, although state monopolies in the commanding heights of the economy such as banking and petroleum remained.

In 2001, China joined the World Trade Organization (WTO). Not long after, the private sector grew remarkably, accounting for as much as 70 percent of China's gross domestic product (GDP) by 2005.[16] From 1978 until 2013, unprecedented growth occurred, with the economy increasing by 9.5% a year. The conservative Hu Jintao's administration regulated and controlled the economy more heavily after 2005, reversing some reforms.[17] On the other hand, a parallel set of political reforms were launched by Deng in 1980, which also inspired the then Soviet Union's Glasnost and Perestroika, but eventually ended in 1989 due to the crackdown on Tiananmen Square protests, halting further political liberalization.

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 have increased, leading to a backlash led by the more ideologically pure New Left. In the academic scene, scholars have debated the reason for the success of the Chinese "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 rise as a great power and a shift of international geopolitical interests towards China, especially in matters relating to the ambiguous political status of Taiwan. Nevertheless, matters such as corruption, pollution and a rapidly aging population remain serious issues that the Chinese government has to tackle.[18][19] Some analysts have also added that the reform era has been scaled down significantly during the leadership of current CPC General Secretary Xi Jinping when the reformists lost power,[20][21][22] citing that Xi has reasserted state control over different aspects of Chinese society,[23] including the economy.[10][24][25]

Course of reforms

Origin

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 weas consistent with the 1975 reform agenda of Deng Xiaoping.[26] Hua made national economic development a matter of the highest priority and emphasized the need to achieve "liberation of productive forces."[26] He "combined Soviet-style big push industrialization with an opening up to the capitalist world" and under his leadership, China opened its first Special Economic Zone and launched major efforts to attract foreign direct investment.[26]

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. By the time Deng took power, there was widespread support among the elite for economic reforms.[27] As the de facto leader, Deng's policies faced opposition from party conservatives but were extremely successful in increasing the country's wealth.

1979–1984

 
The image of Deng Xiaoping in Shenzhen, Guangdong, one of the first special economic zones approved by Deng in 1979.

In 1979, Deng Xiaoping emphasized the goal of "Four Modernizations" and further proposed the idea of "xiaokang", or "moderately prosperous society".[28][29][30] The achievements of Lee Kuan Yew to create an economic success in Singapore had a profound effect on the Communist 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.[31]

Deng's first reforms began in agriculture, a sector long mismanaged by the Communist Party of China. By the late 1970s, food supplies and production had become so deficient that government officials were warning that China was about to repeat the "disaster of 1959", the famines which killed tens of millions during the Great Leap Forward.[32] Deng responded by decollectivizing agriculture and emphasizing the household-responsibility system, which divided the land of the People's communes 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.[33] This move increased agricultural production by 25 percent between 1975 and 1985, setting a precedent for privatizing other parts of the economy.[33] 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.[34]

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 Communist takeover, and they gradually began to make up a greater percentage of industrial output.[35] Price flexibility was also increased, expanding the service sector.[36]

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.[37][38] For the first time since the Kuomintang era, the country was opened to foreign investment. Deng created a series of 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.[36] On January 31, 1979, the Shekou Industrial Zone of Shenzhen was founded, becoming the first experimental area in China to "open up".[39][40]

In July 1979, China adopted its first Law on Joint Venture Using Chinese and Foreign Investment.[41] 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.[41]

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.[39][42] 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.[43][44]

 
Hu Yaobang, then General Secretary of CPC, played an important role in implementing the reforms together with Zhao Ziyang, then Premier of China.

Besides Deng Xiaoping himself, important high-ranking reformists who helped carry out the reforms include Hu Yaobang, then General Secretary of Communist Party of China, and Zhao Ziyang, then Premier of the People's Republic of China.[45][46] Other leaders who favored Deng's reforms include Xi Zhongxun (the father of Xi Jinping), Wan Li, Hu Qili and others.[47][48][49] 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.[50][51][52] 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.[51][53] The two sides struggled over the general direction of the reforms until Chen died in 1995.[51][52][53] 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 (鸟笼经济/鳥籠經濟)".[54][55] 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."[51][55] Chen and some other conservative leaders including Li Xiannian never visited Shenzhen, the leading special economic zone championed by Deng.[55]

1984–1993

 
Shenzhen, one of the first special economic zones of China and the "Silicon Valley of China".[56][57][58][59] Notable high-tech companies such as Huawei, ZTE and Konka were all founded in Shenzhen in the 1980s.

During this period, Deng Xiaoping's policies continued beyond the initial reforms. Controls on private businesses and government intervention continued to decrease, notably in the agrifood sector which saw relaxation of price controls in 1985[15] 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.[60] 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.[61] With the help of Yuan Geng, the first 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 "Open Coastal Cities (沿海开放城市)".[62][63]

A significant economic debate during this period concerned the approach to price liberalization and whether China should adopt an approach consistent with shock therapy -- sudden price liberalization – or a more gradual approach.[64] But in 1986, the latter approach won out.[64] "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.[64] Zhao had accepted the argument that the basic concern in economic reform was energizing enterprises.[64] 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.[64] Radical price reform again became a focus in 1988, 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.[65] The Chinese leadership halted these price liberalization plans in fall 1988 and instead focused on austerity, price reform, and retrenchment.[65]

 


Corruption and increased inflation increased discontent, contributing to the Tiananmen Square protests of 1989 and a conservative backlash after that event which ousted several key reformers and threatened to reverse many of Deng's reforms.[66] The events of 1988 and 1989 led to the imprisonment or exile of many reformist officials.[65] However, Deng stood by his reforms and in 1992, he affirmed the need to continue reforms in his southern tour.[67] 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.[68][69]

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.[67]

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.[70] Inflation became problematic in 1985, 1988 and 1992.[66] 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.[71]

1993–2005

 
The Lujiazui financial district of Pudong, Shanghai, the financial and commercial hub of modern China
 
A market in Kashgar in 1992 with slogans of "Insist reform and opening-up", an alternative rendering of insisting Chinese economic reform which was well underway at the time.

In the 1990s, Deng allowed many radical reforms to be carried out. In 1993, the National People's Congress adopted the landmark Corporation Law.[72] It provides that in state owned enterprises, the state is no more than an investor and controller of stock and assets.[72] Pursuant to the Corporation Law, private and foreign investment in such enterprises must be below 49%.[72] The law also permitted state firms to declare bankruptcy in the event of business failure.[72]

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 Communist Party 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 CPC history, theory and practice.[67]

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.[61] 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;[73] 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.[74]

The domestic private sector first exceeded 50% of GDP in 2005 and has further expanded since. Also in 2005, China was able to surpass Japan as the largest economy in Asia.[75] However, some state monopolies still remained, such as in petroleum and banking.[76]

2005–2012

Hu Jintao and his conservative administration began to reverse some of Deng Xiaoping's reforms in 2005. Observers note that the government adopted more egalitarian and populist policies.[77] It increased subsidies and control over the health care sector,[78] halted privatization,[17] and adopted a loose monetary policy, which led to the formation of a U.S.-style property bubble in which property prices tripled.[79] 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.[17] China would finally surpass Japan's economy in 2010.[80]

2012–2020

Under Party general secretary Xi Jinping and his administration, the CPC has sought numerous reforms. Some of these had increased control over state-owned and private enterprises, at least 288 firms have revised their corporate charters to allow the Communist Party greater influence in corporate management, and to reflect the party line.[26] 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."[81] 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.[82]

2020–present

On 21 July 2020, general secretary of the Communist Party of China, Xi Jinping made a speech to a group of public and private business leaders at the entrepreneur forum in Beijing. Xi emphasized that "We must gradually form a new development pattern with the domestic internal circulation as the main body and the domestic and international dual circulations mutually promoting each other."[83][better source needed] Since then "internal circulation" became a hot word in China. Some Chinese worry that the emphasis of "internal circulation" signals returning to 1960s-era seclusion, and ending of Chinese economic reform.[citation needed]

In September 2020, the CPC 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 CPC.[84]

The Xi Jinping era had considerably different economic objectives, in line with two campaigns, Made in China 2025 and China Standards 2035 which sought to scale up and displace US dominance in various high-tech sectors.[82] 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.

Xi Jinping and the Communist Party of China have undertaken a course of reforms to "combat what the Communist Party considers undesirable economic and social elements".[85] Xi wants to rein hyper-rich entrepreneurs, narrow the country's stubborn wealth gap and promote "common prosperity."" Reforms have included outlawing crypto-currency mining and trading,[86] banning for-profit education,[87] and banning the IPO's[88] and hindering the growth of large firms owned by newly minted Chinese billionaires.

Effects of the reforms

Economic performance

 
China's nominal GDP trend from 1952 to 2015. Note the rapid increase since reform in the late 1970s.

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.[89]

China's economic growth since the reform has been very rapid, exceeding the East Asian Tigers. Since the beginning of Deng Xiaoping's reforms, China's GDP has risen tenfold.[90] 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.[91] Average wages rose sixfold between 1978 and 2005,[92] while absolute poverty declined from 41% of the population to 5% from 1978 to 2001.[93] Some scholars believed that China's economic growth has been understated, due to large sectors of the economy not being counted.[94]

Impact on world growth

China is widely seen as an engine of world and regional growth.[95] Surges in Chinese demand account for 50, 44 and 66 percent of export growth of the Hong Kong SAR of China, 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.[95] Asian leaders view China's economic growth as an "engine of growth for all Asia".[96]

Effect on inequality

 
Gini-coefficient of national income distribution around the world (dark green: <0.25, red: >0.60)

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.[97]

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.[98] Some Western scholars have suggested that reviving the welfare state and instituting a re-distributive income tax system is needed to relieve inequality,[99] while some Chinese economists have suggested that privatizing state monopolies and distributing the proceeds to the population can reduce inequality.[100]

Reforms in specific sectors

Agriculture

 
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 extremely poor and food shortages were common.[101] 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.[101] Food prices fell nearly 50%, while agricultural incomes rose.[102]

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."[103]

A fundamental transformation was the economy's growing adoption of cash crops instead of just growing rice and grain.[102] 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.[104] Trade in agriculture was also liberalized and China became an exporter of food, a great contrast to its previous famines and shortages.[105]

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.[106] 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.[107] Foreign capital controls much of Chinese industry and plays an important role.[61]

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 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.[108] Labor productivity at some Chinese steel firms exceeds Western productivity.[108] From 1975 to 1992, China's automobile production rose from 139,800 to 1.1 million, rising to 9.35 million in 2008.[109] Light industries such as textiles saw an even greater increase, due to reduced government interference. 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.[110]

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.[111] Compared to other East Asian industrial growth spurts, China's industrial performance exceeded Japan's but remained behind South Korea and Taiwan's economies.[112]

Trade and foreign investment

 
Global distribution of Chinese exports in 2006 as a percentage of the top market

Some scholars assert that China has maintained a high degree of openness that is unusual among the other large and populous nations,[dubious ] with competition from foreign goods in almost every sector of the economy. 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.[111] 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.[113] When China joined the WTO, it agreed to considerably harsher conditions than other developing countries.[114] Trade has increased from under 10% of GDP to 64% of GDP over the same period.[115] 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.[116]

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.[96] 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.[117]

Foreign investment was also liberalized upon Deng's ascension. Special Economic Zones (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.[118]

Services

In the 1990s, the financial sector was liberalized.[119] 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.[120] Banking, financial services, insurance and telecommunications were also opened up to foreign investment.[121]

China's banking sector is dominated by four large state-owned banks, which are largely inefficient and monopolistic.[122] China's largest bank, 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.[123] Non-performing loans, mostly made to local governments and unprofitable state-owned enterprises for political purposes,[124] 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 loans was estimated at $160 billion.[125] 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.[126] 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.[127]

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.[128] Internal finance is the most important method successful firms use to fund their activities.[128]

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.[129]

Government finances

In the pre-reform era, government was funded by profits from state-owned enterprises, much like the Soviet Union.[130] 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.[131] 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.[132]

Academic studies

Reasons for success

 
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.[133]

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.[60] 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 barriers to investment to boost both economic growth and their careers. Such reforms were possible because Deng cultivated pro-market followers in the government.[134] Herman Kahn argued that Confucian ethic was playing a "similar but more spectacular role in the modernization of East Asia than the Protestant ethic played in Europe".[135]

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."[136]

 
Roberto Azevêdo, 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 Japan in the 1960s–1970s and other newly industrialized countries.[137] In 2001, China joined the World Trade Organization (WTO).[138] 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 opened their markets outside of China.[139] Foreign aids to China, including those from Hong Kong, Macau and Taiwan, also played an important role.[140][141][142] Since the beginning of opening, China has received a significant amount of aid from major developed countries such as the United States, Japan, Germany, France and the United Kingdom.[140][141] For instance, through its Official Development Assistance (ODA), Japan had offered China various forms of assistance worth 3.65 trillion Yen as of 2018.[140][143] On the other hand, the assistance from the U.S. reached a total of US$556 million as of 2012, and has "helped 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."[140][142]

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.[144] 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.[144]

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.[145] 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 disparity.[146]

Cultural Revolution contributes to China's economic growth in long run. According to Mancur Olson, 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 groups as in the Soviet Union and the European communist states, so when Deng Xiaoping and the other pragmatists take power, there were few interest groups 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.[147]

Comparison to other developing economies

 
Development trends of Chinese and 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.[148] The Eastern bloc economies saw declines of 13% to 65% in GDP at the beginning of reforms, while Chinese growth has been very strong since the beginning of reform.[149] China also managed to avoid the hyperinflation of 200 to 1,000% that Eastern Europe experienced.[150] 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 "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.[151] Other factors thought to account for the differences are the greater urbanization of the CIS economies and differences in social welfare and other institutions.[152] 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.[153]

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.[154] Scholars believe that high rates of investments, especially increases in capital invested per worker, have contributed to China's superior economic performance.[154] 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.[155]

Criticism and development issues

 
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)
 
Global CO2 gas emissions by country (2015).

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".[17] Nevertheless, observers[who?] believe that China's economy can continue growing at rates of 6–8 percent until 2025,[156] though a reduction in state intervention is considered by some to be necessary for sustained growth.[157] However, it has been reported over the years that the GDP figures and other economic data from the Chinese government may be inflated or manipulated otherwise.[158][159][160][161][162] Officials from central government have admitted that local economic statistics are sometimes falsified, to meet the economic growth targets for personal promotion of local officials, for example.[158][163]

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 Lang accused entrepreneur Gu Sujung of usurping state assets, after which Gu was imprisoned.[164] 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 policies that have been criticized by some Chinese economists who advocate a policy of deregulation, tax cuts and privatization.[100]

Other criticisms focus on the effects of rapid industrialization on public health and the environment. 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.[165]

The economic reforms were accompanied with a series of political reforms in the 1980s, supported by Deng Xiaoping. However, many of the planned political reforms ended after the 1989 Tiananmen Square massacre.[166] Lack of political reform contributed to the serious corruption issue in China.[167] In addition, real state bubble, pollution and population crisis are among the most serious development issues in China.[18][19] For instance, China is the largest CO2 emitter in the world.[168]

On the other hand, since the late 1970s, Deng and other senior leaders including Chen Yun and Li Xiannian supported the "one-child policy" to cope with the overpopulation crisis.[169] But the 2010 census data showed that the population growth rate had remained very low,[170] and due to the financial pressure and other factors, many young couples choose to delay or even abandon the plan of raising a second child even though the Chinese government has largely relaxed the one-child policy in late 2015.[171][172][173] The population crisis threatens further economic development.[172][174]

See also

Further reading

  • Gewirtz, Julian. 2022. Never Turn Back: China and the Forbidden History of the 1980s. Belknap Press.

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General and cited sources

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  • Cardenal, Juan Pablo; Araújo, Heriberto (2011), La silenciosa conquista china (in Spanish), Barcelona: Crítica, ISBN 9788498922578
  • Benjamin, Dwayne; et al. (2008), "Income inequality during China's Economic Transition", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Brandt, Loren; et al. (2008), Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Branstetter, Lee; et al. (2008), "China's embrace of globalization", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge University Press
  • Cai, Fang; et al. (2008), "The Chinese labor market in the reform era", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Dillon, Michael. Deng Xiaoping: The Man Who Made Modern China (Bloomsbury Publishing, 2014).
  • Haggard, Stevens; et al. (2008), "The political economy of private-sector development in China", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Heston, Alan; et al. (2008), "China and Development economics", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Huang, Jikun; et al. (2008), "Agriculture in China's Development: Past Disappointments, Recent Successes, and Future Challenges", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Kahn, Herman (24 May 1979). World Economic Development: 1979 And Beyond. Avalon Publishing. ISBN 978-0-89158-392-9.
  • Kau, Michael Y. M. China in the Era of Deng Xiaoping: A Decade of Reform (Routledge, 2016).
  • Naughton, Barry; et al. (2008), "A Political Economy of China's Economic Transitionin China's Great Transformation", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Perkins, Dwight; et al. (2008), "Forecasting China's growth to 2025", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Rawski, G. Thomas; et al. (2008), "China's Industrial Development", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Svejnar, Jan; et al. (2008), "China in light of other transition economies", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Vogel, Ezra F. Deng Xiaoping and the Transformation of China (Harvard UP, 2011).
  • Walder, Andrew G. (2015). China Under Mao. Cambridge, MA: Harvard University Press. ISBN 978-0-674-05815-6.
  • Wong, P.W. Christine; et al. (2008), "China's Fiscal system: a work in progress", in Brandt, Loren; Rawski, G. Thomas (eds.), China's Great Transformation, Cambridge: Cambridge university press
  • Zhao, Xin; Russell W. Belk (August 2008). "Politicizing Consumer Culture: Advertising's Appropriation of Political Ideology in China's Social Transition". Journal of Consumer Research. 35 (2): 231–244. doi:10.1086/588747. ISSN 0093-5301.

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chinese, economic, reform, broader, coverage, this, topic, economy, china, chinese, economic, miracle, also, known, domestically, reform, opening, chinese, 改革开放, pinyin, gǎigé, kāifàng, opening, china, west, refers, variety, economic, reforms, termed, socialis. For broader coverage of this topic see Economy of China The Chinese economic reform or Chinese economic miracle 1 2 also known domestically as reform and opening up Chinese 改革开放 pinyin Gǎige kaifang or the opening of China in the West refers to a variety of economic reforms termed socialism with Chinese characteristics and socialist market economy in the People s Republic of China PRC that began in the late 20th century Guided by Deng Xiaoping who is often credited as the General Architect the reforms were launched by reformists within the ruling Communist Party of China CPC on December 18 1978 during the Boluan Fanzheng period 3 4 5 6 The reforms briefly went into stagnation after the 1989 Tiananmen Square protests and massacre but were revived after Deng Xiaoping s southern tour in 1992 The reforms led to significant economic growth for China within the successive decades in 2010 China overtook Japan as the world s second largest economy by nominal GDP 7 8 and in 2017 overtook the United States by becoming the world s largest economy by GDP PPP 9 Chinese economic reformSimplified Chinese改革开放Traditional Chinese改革開放Literal meaning Reform and Opening Up TranscriptionsStandard MandarinHanyu PinyinGǎige kaifangWade GilesKai3 ko2 k ai1 fang4IPA ka ɪkɤ kʰa ɪfa ŋ Yue CantoneseYale RomanizationGoigaak hōifongJyutpingGoi2 gaak3 hoi1 fong3IPA kɔ ːika ːk hɔ ːifɔ ːŋ 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 stemming from the Great Leap Forward and the Cultural Revolution 10 This placed it near the middle of the Asian nations during the same period 11 with neighboring capitalist 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 12 Starting in 1970 the economy entered into a period of stagnation 13 and after the death of Mao Zedong the Communist Party leadership decided to abandon Maoism and turn to market oriented reforms to salvage the stagnant economy 14 The Communist Party authorities carried out the market reforms in two stages The first stage in the late 1970s and early 1980s involved the de collectivization of agriculture the opening up of the country to 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 contracting out of much state owned industry The 1985 lifting of price controls 15 was a major reform and the lifting of protectionist policies and regulations soon followed although state monopolies in the commanding heights of the economy such as banking and petroleum remained In 2001 China joined the World Trade Organization WTO Not long after the private sector grew remarkably accounting for as much as 70 percent of China s gross domestic product GDP by 2005 16 From 1978 until 2013 unprecedented growth occurred with the economy increasing by 9 5 a year The conservative Hu Jintao s administration regulated and controlled the economy more heavily after 2005 reversing some reforms 17 On the other hand a parallel set of political reforms were launched by Deng in 1980 which also inspired the then Soviet Union s Glasnost and Perestroika but eventually ended in 1989 due to the crackdown on Tiananmen Square protests halting further political liberalization 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 have increased leading to a backlash led by the more ideologically pure New Left In the academic scene scholars have debated the reason for the success of the Chinese 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 rise as a great power and a shift of international geopolitical interests towards China especially in matters relating to the ambiguous political status of Taiwan Nevertheless matters such as corruption pollution and a rapidly aging population remain serious issues that the Chinese government has to tackle 18 19 Some analysts have also added that the reform era has been scaled down significantly during the leadership of current CPC General Secretary Xi Jinping when the reformists lost power 20 21 22 citing that Xi has reasserted state control over different aspects of Chinese society 23 including the economy 10 24 25 Contents 1 Course of reforms 1 1 Origin 1 2 1979 1984 1 3 1984 1993 1 4 1993 2005 1 5 2005 2012 1 6 2012 2020 1 7 2020 present 2 Effects of the reforms 2 1 Economic performance 2 2 Impact on world growth 2 3 Effect on inequality 3 Reforms in specific sectors 3 1 Agriculture 3 2 Industry 3 3 Trade and foreign investment 3 4 Services 3 5 Government finances 4 Academic studies 4 1 Reasons for success 4 2 Comparison to other developing economies 4 3 Criticism and development issues 5 See also 6 Further reading 7 References 7 1 Citations 7 2 General and cited sources 8 External linksCourse of reforms EditOrigin Edit 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 weas consistent with the 1975 reform agenda of Deng Xiaoping 26 Hua made national economic development a matter of the highest priority and emphasized the need to achieve liberation of productive forces 26 He combined Soviet style big push industrialization with an opening up to the capitalist world and under his leadership China opened its first Special Economic Zone and launched major efforts to attract foreign direct investment 26 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 By the time Deng took power there was widespread support among the elite for economic reforms 27 As the de facto leader Deng s policies faced opposition from party conservatives but were extremely successful in increasing the country s wealth 1979 1984 Edit See also History of the People s Republic of China Political reforms The image of Deng Xiaoping in Shenzhen Guangdong one of the first special economic zones approved by Deng in 1979 In 1979 Deng Xiaoping emphasized the goal of Four Modernizations and further proposed the idea of xiaokang or moderately prosperous society 28 29 30 The achievements of Lee Kuan Yew to create an economic success in Singapore had a profound effect on the Communist 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 31 Deng s first reforms began in agriculture a sector long mismanaged by the Communist Party of China By the late 1970s food supplies and production had become so deficient that government officials were warning that China was about to repeat the disaster of 1959 the famines which killed tens of millions during the Great Leap Forward 32 Deng responded by decollectivizing agriculture and emphasizing the household responsibility system which divided the land of the People s communes 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 33 This move increased agricultural production by 25 percent between 1975 and 1985 setting a precedent for privatizing other parts of the economy 33 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 34 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 Communist takeover and they gradually began to make up a greater percentage of industrial output 35 Price flexibility was also increased expanding the service sector 36 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 37 38 For the first time since the Kuomintang era the country was opened to foreign investment Deng created a series of 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 36 On January 31 1979 the Shekou Industrial Zone of Shenzhen was founded becoming the first experimental area in China to open up 39 40 In July 1979 China adopted its first Law on Joint Venture Using Chinese and Foreign Investment 41 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 41 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 39 42 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 43 44 Hu Yaobang then General Secretary of CPC played an important role in implementing the reforms together with Zhao Ziyang then Premier of China Besides Deng Xiaoping himself important high ranking reformists who helped carry out the reforms include Hu Yaobang then General Secretary of Communist Party of China and Zhao Ziyang then Premier of the People s Republic of China 45 46 Other leaders who favored Deng s reforms include Xi Zhongxun the father of Xi Jinping Wan Li Hu Qili and others 47 48 49 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 50 51 52 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 51 53 The two sides struggled over the general direction of the reforms until Chen died in 1995 51 52 53 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 鸟笼经济 鳥籠經濟 54 55 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 51 55 Chen and some other conservative leaders including Li Xiannian never visited Shenzhen the leading special economic zone championed by Deng 55 1984 1993 Edit See also 1986 Chinese student demonstrations 1989 Tiananmen Square protests and Deng Xiaoping s southern tour Shenzhen one of the first special economic zones of China and the Silicon Valley of China 56 57 58 59 Notable high tech companies such as Huawei ZTE and Konka were all founded in Shenzhen in the 1980s During this period Deng Xiaoping s policies continued beyond the initial reforms Controls on private businesses and government intervention continued to decrease notably in the agrifood sector which saw relaxation of price controls in 1985 15 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 60 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 61 With the help of Yuan Geng the first 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 Open Coastal Cities 沿海开放城市 62 63 A significant economic debate during this period concerned the approach to price liberalization and whether China should adopt an approach consistent with shock therapy sudden price liberalization or a more gradual approach 64 But in 1986 the latter approach won out 64 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 64 Zhao had accepted the argument that the basic concern in economic reform was energizing enterprises 64 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 64 Radical price reform again became a focus in 1988 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 65 The Chinese leadership halted these price liberalization plans in fall 1988 and instead focused on austerity price reform and retrenchment 65 The slogan Time is Money Efficiency is Life from Shekou Shenzhen representing the Shenzhen speed Corruption and increased inflation increased discontent contributing to the Tiananmen Square protests of 1989 and a conservative backlash after that event which ousted several key reformers and threatened to reverse many of Deng s reforms 66 The events of 1988 and 1989 led to the imprisonment or exile of many reformist officials 65 However Deng stood by his reforms and in 1992 he affirmed the need to continue reforms in his southern tour 67 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 68 69 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 67 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 70 Inflation became problematic in 1985 1988 and 1992 66 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 71 1993 2005 Edit The Lujiazui financial district of Pudong Shanghai the financial and commercial hub of modern China A market in Kashgar in 1992 with slogans of Insist reform and opening up an alternative rendering of insisting Chinese economic reform which was well underway at the time In the 1990s Deng allowed many radical reforms to be carried out In 1993 the National People s Congress adopted the landmark Corporation Law 72 It provides that in state owned enterprises the state is no more than an investor and controller of stock and assets 72 Pursuant to the Corporation Law private and foreign investment in such enterprises must be below 49 72 The law also permitted state firms to declare bankruptcy in the event of business failure 72 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 Communist Party 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 CPC history theory and practice 67 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 61 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 73 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 74 The domestic private sector first exceeded 50 of GDP in 2005 and has further expanded since Also in 2005 China was able to surpass Japan as the largest economy in Asia 75 However some state monopolies still remained such as in petroleum and banking 76 2005 2012 Edit Hu Jintao and his conservative administration began to reverse some of Deng Xiaoping s reforms in 2005 Observers note that the government adopted more egalitarian and populist policies 77 It increased subsidies and control over the health care sector 78 halted privatization 17 and adopted a loose monetary policy which led to the formation of a U S style property bubble in which property prices tripled 79 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 17 China would finally surpass Japan s economy in 2010 80 2012 2020 Edit Under Party general secretary Xi Jinping and his administration the CPC has sought numerous reforms Some of these had increased control over state owned and private enterprises at least 288 firms have revised their corporate charters to allow the Communist Party greater influence in corporate management and to reflect the party line 26 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 81 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 82 2020 present Edit Main article 2020 2021 Xi Jinping Administration reform spree On 21 July 2020 general secretary of the Communist Party of China Xi Jinping made a speech to a group of public and private business leaders at the entrepreneur forum in Beijing Xi emphasized that We must gradually form a new development pattern with the domestic internal circulation as the main body and the domestic and international dual circulations mutually promoting each other 83 better source needed Since then internal circulation became a hot word in China Some Chinese worry that the emphasis of internal circulation signals returning to 1960s era seclusion and ending of Chinese economic reform citation needed In September 2020 the CPC 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 CPC 84 The Xi Jinping era had considerably different economic objectives in line with two campaigns Made in China 2025 and China Standards 2035 which sought to scale up and displace US dominance in various high tech sectors 82 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 Xi Jinping and the Communist Party of China have undertaken a course of reforms to combat what the Communist Party considers undesirable economic and social elements 85 Xi wants to rein hyper rich entrepreneurs narrow the country s stubborn wealth gap and promote common prosperity Reforms have included outlawing crypto currency mining and trading 86 banning for profit education 87 and banning the IPO s 88 and hindering the growth of large firms owned by newly minted Chinese billionaires Effects of the reforms EditEconomic performance Edit China s nominal GDP trend from 1952 to 2015 Note the rapid increase since reform in the late 1970s 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 89 China s economic growth since the reform has been very rapid exceeding the East Asian Tigers Since the beginning of Deng Xiaoping s reforms China s GDP has risen tenfold 90 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 91 Average wages rose sixfold between 1978 and 2005 92 while absolute poverty declined from 41 of the population to 5 from 1978 to 2001 93 Some scholars believed that China s economic growth has been understated due to large sectors of the economy not being counted 94 Impact on world growth Edit China is widely seen as an engine of world and regional growth 95 Surges in Chinese demand account for 50 44 and 66 percent of export growth of the Hong Kong SAR of China 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 95 Asian leaders view China s economic growth as an engine of growth for all Asia 96 Effect on inequality Edit See also Social welfare in China Gini coefficient of national income distribution around the world dark green lt 0 25 red gt 0 60 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 97 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 98 Some Western scholars have suggested that reviving the welfare state and instituting a re distributive income tax system is needed to relieve inequality 99 while some Chinese economists have suggested that privatizing state monopolies and distributing the proceeds to the population can reduce inequality 100 Reforms in specific sectors EditAgriculture Edit 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 extremely poor and food shortages were common 101 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 101 Food prices fell nearly 50 while agricultural incomes rose 102 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 103 A fundamental transformation was the economy s growing adoption of cash crops instead of just growing rice and grain 102 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 104 Trade in agriculture was also liberalized and China became an exporter of food a great contrast to its previous famines and shortages 105 Industry Edit 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 106 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 107 Foreign capital controls much of Chinese industry and plays an important role 61 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 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 108 Labor productivity at some Chinese steel firms exceeds Western productivity 108 From 1975 to 1992 China s automobile production rose from 139 800 to 1 1 million rising to 9 35 million in 2008 109 Light industries such as textiles saw an even greater increase due to reduced government interference 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 110 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 111 Compared to other East Asian industrial growth spurts China s industrial performance exceeded Japan s but remained behind South Korea and Taiwan s economies 112 Trade and foreign investment Edit This section needs to be updated The reason given is China United States trade war Please help update this article to reflect recent events or newly available information October 2020 Global distribution of Chinese exports in 2006 as a percentage of the top market Some scholars assert that China has maintained a high degree of openness that is unusual among the other large and populous nations dubious discuss with competition from foreign goods in almost every sector of the economy 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 111 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 113 When China joined the WTO it agreed to considerably harsher conditions than other developing countries 114 Trade has increased from under 10 of GDP to 64 of GDP over the same period 115 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 116 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 96 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 117 Foreign investment was also liberalized upon Deng s ascension Special Economic Zones 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 118 Services Edit Shanghai Stock Exchange Shenzhen Stock Exchange In the 1990s the financial sector was liberalized 119 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 120 Banking financial services insurance and telecommunications were also opened up to foreign investment 121 China s banking sector is dominated by four large state owned banks which are largely inefficient and monopolistic 122 China s largest bank 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 123 Non performing loans mostly made to local governments and unprofitable state owned enterprises for political purposes 124 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 loans was estimated at 160 billion 125 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 126 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 127 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 128 Internal finance is the most important method successful firms use to fund their activities 128 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 129 Government finances Edit In the pre reform era government was funded by profits from state owned enterprises much like the Soviet Union 130 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 131 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 132 Academic studies EditReasons for success Edit See also Foreign aid to China and China model 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 133 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 60 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 barriers to investment to boost both economic growth and their careers Such reforms were possible because Deng cultivated pro market followers in the government 134 Herman Kahn argued that Confucian ethic was playing a similar but more spectacular role in the modernization of East Asia than the Protestant ethic played in Europe 135 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 136 Roberto Azevedo 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 Japan in the 1960s 1970s and other newly industrialized countries 137 In 2001 China joined the World Trade Organization WTO 138 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 opened their markets outside of China 139 Foreign aids to China including those from Hong Kong Macau and Taiwan also played an important role 140 141 142 Since the beginning of opening China has received a significant amount of aid from major developed countries such as the United States Japan Germany France and the United Kingdom 140 141 For instance through its Official Development Assistance ODA Japan had offered China various forms of assistance worth 3 65 trillion Yen as of 2018 140 143 On the other hand the assistance from the U S reached a total of US 556 million as of 2012 and has helped 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 140 142 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 144 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 144 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 145 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 disparity 146 Cultural Revolution contributes to China s economic growth in long run According to Mancur Olson 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 groups as in the Soviet Union and the European communist states so when Deng Xiaoping and the other pragmatists take power there were few interest groups 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 147 Comparison to other developing economies Edit Development trends of Chinese and 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 148 The Eastern bloc economies saw declines of 13 to 65 in GDP at the beginning of reforms while Chinese growth has been very strong since the beginning of reform 149 China also managed to avoid the hyperinflation of 200 to 1 000 that Eastern Europe experienced 150 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 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 151 Other factors thought to account for the differences are the greater urbanization of the CIS economies and differences in social welfare and other institutions 152 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 153 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 154 Scholars believe that high rates of investments especially increases in capital invested per worker have contributed to China s superior economic performance 154 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 155 Criticism and development issues Edit 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 Global CO2 gas emissions by country 2015 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 17 Nevertheless observers who believe that China s economy can continue growing at rates of 6 8 percent until 2025 156 though a reduction in state intervention is considered by some to be necessary for sustained growth 157 However it has been reported over the years that the GDP figures and other economic data from the Chinese government may be inflated or manipulated otherwise 158 159 160 161 162 Officials from central government have admitted that local economic statistics are sometimes falsified to meet the economic growth targets for personal promotion of local officials for example 158 163 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 Lang accused entrepreneur Gu Sujung of usurping state assets after which Gu was imprisoned 164 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 policies that have been criticized by some Chinese economists who advocate a policy of deregulation tax cuts and privatization 100 Other criticisms focus on the effects of rapid industrialization on public health and the environment 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 165 The economic reforms were accompanied with a series of political reforms in the 1980s supported by Deng Xiaoping However many of the planned political reforms ended after the 1989 Tiananmen Square massacre 166 Lack of political reform contributed to the serious corruption issue in China 167 In addition real state bubble pollution and population crisis are among the most serious development issues in China 18 19 For instance China is the largest CO2 emitter in the world 168 On the other hand since the late 1970s Deng and other senior leaders including Chen Yun and Li Xiannian supported the one child policy to cope with the overpopulation crisis 169 But the 2010 census data showed that the population growth rate had remained very low 170 and due to the financial pressure and other factors many young couples choose to delay or even abandon the plan of raising a second child even though the Chinese government has largely relaxed the one child policy in late 2015 171 172 173 The population crisis threatens further economic development 172 174 See also Edit China portal China model Beijing Consensus Deng Xiaoping Theory Go Out policy China s political reforms in 1980s Khrushchev 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Press ISBN 978 0 674 05815 6 Wong P W Christine et al 2008 China s Fiscal system a work in progress in Brandt Loren Rawski G Thomas eds China s Great Transformation Cambridge Cambridge university press Zhao Xin Russell W Belk August 2008 Politicizing Consumer Culture Advertising s Appropriation of Political Ideology in China s Social Transition Journal of Consumer Research 35 2 231 244 doi 10 1086 588747 ISSN 0093 5301 External links Edit Quotations related to Chinese economic reform at Wikiquote Retrieved from https en wikipedia org w index php title Chinese economic reform amp oldid 1132567746, wikipedia, wiki, book, books, library,

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