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30 Years of Reform & Opening upand Looking forward
LSE, 3 December 2008
In December 1978, the Chinese government shifted its priority from political struggle to economic development, thereby initiating a new era of reform and opening up in China.
Deng Xiaoping: We must catch up with the times, and this should be the objective of the reform.
I. Four stages of reform and opening up
• The initial stage: from December 1978 to September 1984
• The period of comprehensive progress: from October 1984 to January 1992
• The period of institutional innovation: from February 1992 to October 2002
• The period of ‘storming the fortress’: from October 2002 onward
The initial stage:
The reforms started in the rural areas. Farmers obtained the right of land use
4 special economic zones set up14 coastal open cities designatedThe three-stage strategy put forward by Deng Xiaoping
SHENZHEN
The second stage:
Reform priority shifted to the citiesReform of state owned enterprises introduced
• Township and village enterprises flourished• Special economic zone in Hainan and
development area of Pudong, Shanghai declared
The third stage:
The objective of ‘a socialist market economy’ embracedReform of SOEs a major priority
• Accession to the WTO• The principle of building rule of law enshrined
in Constitution
The fourth stage:
Further improvement of the socialist market economyThe objective of building a moderately prosperous society
The theory of scientific outlook on developmentProtection of lawful private property enshrined in
Constitution
II. major achievements of reform and opening up
Sustained and fast growth and qualitative leap of comprehensive national strength
Farewell to the shortage economy and explosion of consumption
Substantial reduction in poverty
Close integration with the global economy
0
200
400
600
800
1000
1200
1400
1978 1980 1985 1990 1995 2000 2005 2007
IMPORT
EXPORT
A vibrant and dynamic economy and society
Progress in building democracy and rule of law
III. experiences gained in the past 30 years
• Clearly defined objectives and Scientific outlook on development
• Three-step strategy:• First step: doubling per capita GDP during the 80s from $250
to $500.• Second step: doubling per capita again by the end of the 20th
century to $1,000 and increasing overall GDP to $1 trillion, turning China into a moderately prosperous society.
• Third step: quadrupling per capita GDP to $4,000 in 30 to 50 years.
• Adherence to reform and opening up in light of China’s national conditions
• Improving living standards and social stability
• Commitment to peace, development, cooperation and win-win outcome
IV. Major challenges and difficulties facing China
• Pressure of population and employment
Resource scarcity and environmental pollution
Uneven urban-rural and regional development
Imbalances in economic structure
V. the Chinese economy amid the global financial crisis
• 2008 is termed ‘the most difficult year’ for the Chinese economy.
• The financial crisis is hitting China. Many SME closures this year
• China’s counter-measures: a six hundred billion dollars stimulus package
VI. Prospects in the coming 10 to 20 years
Development programme and strategy
Stability in macroeconomic managementUpgrading of industrial structure
More efficient use of resources and lower energy intensity
• Central and western expansion
LANZHOU
Fast urbanization
• Expanding Transport Infrastructure
Better public services in education and health care
• Higher standard of living for all the people
• Emerging civil society
VII. factors underpinning sustained growth in China
• abundant labour force• a big domestic market
• rich capital reserves (savings and foreign exchange reserve)
30 Years of Reform & Opening upand Looking forward
LSE, 3 December 2008