China's economic transformation, 1978-2000

H2 History - syllabus 9174, 2027

How China moved from a poor planned economy to a fast-growing trading power: the problems of the Maoist economy, market reforms, the open door, state intervention and international developments.

• Problems of the Maoist economy

  Weak incentives, political campaigns and isolation left China poor by 1978. These problems explain why reform began and why catch-up growth was possible.

• Market reforms in the countryside

  Letting farm families sell their surplus made effort pay. Farm output and rural incomes rose fast in the early 1980s.

• Market reforms in industry and the cities

  Reform in the cities was slower and riskier. It mixed plan and market, caused inflation, and was relaunched in 1992.

• The open door policy

  Opening coastal China to foreign investment and trade brought capital, technology and markets, and turned China into a great exporter.

• State intervention

  The Party-state chose reform, set its pace and kept control of key sectors. Its gradual approach avoided collapse.

• International developments

  Better relations with the USA, help from international bodies and investment from Hong Kong and Taiwan made the open door work.

• Weighing the factors over time

  Market reforms drove the 1980s, the open door drove the 1990s, and the state shaped both.

• Put it together: What transformed China?

  Choose a factor and test it against the evidence.