Chinese economic reform
Guided by Deng Xiaoping, who is often credited as the "General Architect", the reforms were launched by reformists within the ruling Chinese Communist Party (CCP) on December 18, 1978, during the Boluan Fanzheng period.
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.
[17] Before Deng Xiaoping's reforms, China's economy suffered due to centrally planned policies, such as the Great Leap Forward and the Cultural Revolution, resulting in stagnation, inefficiency, and poverty.
[23] 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.
Leaders in China made a major effort, especially under Deng Xiaoping, to emulate his policies of economic growth, entrepreneurship, and subtle suppression of dissent.
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.
Private businesses were allowed to operate for the first time since the CCP takeover, and they gradually began to make up a greater percentage of industrial output.
[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.
[43][44] Besides Deng Xiaoping himself, important high-ranking reformists who helped carry out the reforms include Hu Yaobang, then General Secretary of Chinese Communist Party, and Zhao Ziyang, then Premier of the People's Republic of China.
"[51][55] Chen and some other conservative leaders including Li Xiannian never visited Shenzhen, the leading special economic zone championed by Deng.
[55] In October 1984, the Party adopted its Decision on the Reform of the Economic System, marking a major shift in the thinking of Chinese policymakers with regard to market mechanisms.
[61] 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.
"[88] 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.
[91] His administration has also pursued a debt-deleveraging campaign, seeking to slow and cut the unsustainable amount of debt China has accrued during its economic growth.
[110] Planned economy as well as the Maoist policies imposed during the Cultural Revolution were gradually dismantled, and the theory of a "primary stage of socialism" was proposed as the theoretical basis of the political report to the 13th National Congress of the CCP held in 1987.
[113] In early 1992, then retired paramount leader Deng Xiaoping embarked on his celebrated southern tour, during which he, with strong support from the Chinese military, ordered that "those who do not promote reform should be brought down from their leadership positions".
[116][117] Meanwhile, the New Enlightenment in the 1980s did not proceed, as the academia and intellectual circle in mainland China became divided in the 1990s, forming two major schools of thought: the Liberalism and the New Left.
[118][119] The Liberalism school argued that China should continue its reform and opening, further developing market economy while pushing forward political reforms for human rights, freedom, democracy, rule of law and constitutionalism; high-ranking Chinese officials including Chinese Premier Zhu Rongji and Premier Wen Jiabao have expressed various degree of support over this view.
[133] 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.
[144] 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.
[151] 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.
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.
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."
[177] 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.
[182] 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.
[189] It has been reported, including by the National Bureau of Statistics, that over the years that the GDP figures and other economic data from local Chinese governments may be inflated or manipulated otherwise.
[206] 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.
[208] Due to the financial pressure and other factors, many young couples increasingly choose to delay or even abandon the plan of raising a second child even after the Chinese government largely relaxed the one-child policy in late 2015.
