Reform and opening up
Economic reforms that transformed China's economy after 1978.
On December 18, 1978, during the Boluan Fanzheng period, the Chinese Communist Party launched a series of economic shifts at the third plenary session of the 11th CCP Central Committee, with Deng Xiaoping—often called the "General Architect"—providing direction. These changes moved China away from a planned economy toward what is officially known as a socialist market economy. The reforms de-collectivized farming, dissolved the people's communes, loosened price controls, opened the door to foreign investment, and established special economic zones, most notably the Shenzhen Special Economic Zone and the Shanghai Pudong New Area. Private businesses were permitted to expand, while many state-owned enterprises were downsized or sold off. The Shanghai and Shenzhen stock exchanges were set up in 1990, creating a capital market, and China joined the Asia-Pacific Economic Cooperation in 1991 and the World Trade Organization in 2001. This transformation sparked decades of rapid economic growth, often called an "economic miracle." China went from being one of the world's poorest nations to an upper-middle-income country, lifting 800 million people out of extreme poverty between 1978 and 2018. The economy grew from $150 billion in 1978 to $18.74 trillion by 2024. In 2010, China surpassed Japan to become the second-largest economy by nominal GDP, and by 2016 it overtook the United States as the largest economy by GDP (PPP). The reforms also boosted China's global political and economic influence, establishing it as the world's top manufacturing power.
- field
- Economic reforms
- nationality
- Chinese
- known_for
- Transforming China from a planned economy to a socialist market economy, leading to rapid growth and poverty reduction
Lore & Background
The reforms de-collectivized agriculture, abolished people's communes, relaxed price controls, allowed foreign direct investment, and created special economic zones such as Shenzhen and Shanghai Pudong New Area. Private enterprises were allowed to grow, and many state-owned enterprises were scaled down or privatized. The reforms were launched by the Chinese Communist Party on December 18, 1978, at the third plenary session of the 11th Central Committee, during the Boluan Fanzheng period, and were guided by Deng Xiaoping. They began after the Cultural Revolution and changed China from a planned economy to a socialist market economy. The first stage, in the late 1970s and early 1980s, focused on agricultural de-collectivization, opening to foreign investment, and permitting private business, though most industries remained state-owned. The second stage, in the late 1980s and 1990s, involved privatizing and contracting out much state-owned industry. Price controls were lifted in 1985, and protectionist policies were later removed, though state monopolies in banking and petroleum persisted. The Shanghai and Shenzhen stock exchanges were established in 1990, creating a capital market. China joined the Asia-Pacific Economic Cooperation in 1991 and the World Trade Organization in 2001. Political reforms launched in the 1980s ended with the 1989 Tiananmen Square protests and massacre. Economic reforms revived after Deng’s 1992 southern tour. The reforms became central to socialism with Chinese characteristics, were incorporated into the CCP constitution in 1997 and the state constitution in 1999.
Reader's Guide
Reform and opening-up is a major decision and turning point in the history of the People's Republic of China. The reforms led to significant economic growth for China within the successive decades, turning China from one of the poorest countries in the world to an upper-middle income country, while significantly reducing poverty and increasing wealth. The reforms also significantly increased China's global political and economic power, establishing the country as the world's leading manufacturing power. The reforms were carried out in two stages: the first in the late 1970s and early 1980s involved agricultural decollectivization and opening to foreign investment; the second in the late 1980s and 1990s involved privatization of state-owned industry.
Did You Know?
- The reforms began on December 18, 1978 at the third plenary session of the 11th CCP Central Committee.
Frequently Asked Questions
What is Reform and Opening Up?
It is the sweeping set of economic policy shifts in the People's Republic of China that launched in the late 1970s, right after Mao Zedong's death. The initiative moved the country away from rigid centralized planning toward what the government officially calls a socialist market economy.
Who is considered the main architect behind Reform and Opening Up?
Deng Xiaoping is widely credited as the driving force and 'General Architect' of the entire reform era. He steered the Chinese Communist Party in setting the policy shift in motion at the 11th Central Committee's third plenary session.
When exactly did Reform and Opening Up officially begin?
The reforms were formally adopted on December 18, 1978, during the third plenary session of the 11th CCP Central Committee. This fell within the broader Boluan Fanzheng (rectification) window in Chinese political history.
What were the biggest results of Reform and Opening Up?
The policy pivot fueled extraordinary economic expansion and lifted hundreds of millions of people out of poverty over the following decades. China's economy transitioned from strict state planning to a market-oriented model that the government labels a 'socialist market economy.'
Why does Reform and Opening Up matter in Chinese history?
It marked the decisive break from the Mao-era economic model and set the trajectory for modern China's rise as a global economic power. Without this 1978 pivot, the rapid industrialization and growth that defined the late twentieth and early twenty-first centuries would not have occurred.
More in Chinese History 1-24
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