China’s economic reform: Success, problems and challenges

The rise of China is a major episode in world economic history. From the late 1970s, China pursued market-oriented reforms and open policy. During the past two decades, China experienced extraordinary growth. Since 1978, GDP growth rates have averaged 10 per cent a year, and 10.7 per cent in the 1990s, rivaling the record achieved by Japan and the Four Tigers (South Korea, Singapore and Hong Kong and Taiwan province of China) in their fast growing period.
In a short span of time, China has experienced three historic transformations simultaneously. First, China is undergoing economic transition from a planned economy to a market economy. Second, China is undergoing economic development from a traditional agricultural economy to an industrialised economy. Third, China is changing from autarky to an important player in the arena of world economy and politics. Chinas experience provides an ideal laboratory for economic research. The study of the Chinese economy can not only shed light on the causes and process of this massive growth surge, but also enrich our understanding of policy reform and institutional changes.