Background and Summary

Abstract

Since the reform and opening to the outside world in 1978, China has made great achievements in social and economic development and maintained a high growth rate. Gross domestic product (GDP) grew by 9.3% per annum from 1978 to 2003. In the meantime, Chinese economy sustained macro-economic stability, the economic fluctuation coefficient maintained at 33% during 1978–2003, while such coefficient was as high as 154% during planned economy era before reform (from 1953 to 1978). In the context of globalization and open market, China successfully withstood various external shocks and emerged one of the best performing economies [1]. Average per capita income increased dramatically and poverty population was reduced significantly (Table 1.1). China has successfully transformed from a planned economy to a modern market-based economy. The urbanization process accelerated with the urban population increasing from 173 million in 1978 to over 500 million in 2003. With the policy of opening to the outside world and trade liberalization, China increased its participation in the globalization process. Within one generation, as the largest developing country, China has created an economic development miracle. The World Bank praised China as the most successful developing country in the past two decades. Its successful story brings precious lessons and experiences that can be shared with the rest of the developing world [2].