Market reforms drove the 1980s, the open door drove the 1990s, and the state shaped both.
China grew by about 9 to 10 per cent a year from 1978 to 2000. By China's official measure, rural poverty fell from about 250 million people to about 30 million.
The problems of the Maoist economy explain why reform began and why fast catch-up growth was possible.
Market reforms, especially in farming, drove the first wave of growth in the 1980s. The open door drove export growth, especially in the 1990s.
State intervention shaped the whole process. Its gradual, experimental approach avoided the economic collapse that followed the fall of the Soviet Union.
International developments made the open door possible and supplied investors, especially from Hong Kong and Taiwan.
Growth had costs. Inequality between coast and interior and between town and country rose sharply. Corruption spread, and state workers lost their security.
- Growth
- About 9 to 10 per cent a year, 1978-2000.
- Poverty
- Rural poor fell from about 250 million to about 30 million (official figures).
- Costs
- Inequality, corruption, layoffs.
Worked example: Building an argument
Which factor was most important?
- Criterion: which factor decided how the others worked?
- Case for market reforms: they released the energy for growth.
- Case for the open door: it made China an export power.
- Case for the state: it chose, tested and paced every reform.
Watch out for this
One factor explains China's growth from 1978 to 2000.
The balance shifted. Rural reform mattered most at first, the open door in the 1990s, and the state throughout.
Check your understanding
Which factor drove the first wave of growth in the early 1980s?
- Rural market reforms
- WTO membership
- The Southern Tour