Choose a factor and test it against the evidence.
Which factor best explains China's transformation from 1978 to 2000?
Market-oriented reforms
- Household Responsibility System.
- Dual-track pricing and private firms.
Incentives released fast growth, especially in the 1980s.
Urban reform brought inflation and layoffs.
The open door policy
- SEZs from 1980.
- Exports of about 250 billion dollars by 2000.
It brought capital, technology and markets, especially in the 1990s.
Early growth came mainly from the countryside.
State intervention
- Third Plenum, 1978.
- Gradual experiments; state banks and industry.
The state chose, tested and paced every reform.
State banks built up bad loans.
International developments
- Relations with the USA, 1979.
- Investment from Hong Kong and Taiwan.
Outside conditions made the open door work.
China's own choices explain how it used them.