China’s economic reforms: A synoptic view

Abstract

Structural-systemic reforms of China’s economy were initiated in 1979 against a background of economic crisis, absence of a reform blueprint, and unsatisfactory experience with past developmental models. The reforms may be seen as having five major components; pragmatic gradualism; marketization of the coordination mechanism; diversification of the property structure (destatization); outward orientation (controlled openness); and retention of political monopoly power by the communist party. Of these, the proliferation of various property forms is novel, problematical, and conceptually intriguing. The reforms have resulted in or been accompanied thus far by modernizing but erratic and uneven economic growth and marginal political liberalization; strong inflationary pressures; unresolved state sector property problems; and uncertainties of political succession. The vision of China’s economic future is obscured by the unfinished business of significant state ownership of industry and an authoritarian polity seasoned by corruption. Unless these are removed, the danger remains that the reforms will be undone.