Deng's December 1978 turn launched China's growth miracle
Reform and opening-up names the People's Republic of China's market-leaning economic program often branded an economic miracle. Guided by Deng Xiaoping as 'General Architect,' the Communist Party launched it on 18 December 1978 at the Third Plenum after the Cultural Revolution.
Before the shift, the Great Leap Forward and the Cultural Revolution had left a centrally planned, state-dominated economy mired in waste and poverty. Real income per person rose about 2.9 per cent a year from 1950 to 1973, with wild swings, placing China mid-table in Asia. When Deng displaced Hua Guofeng as paramount leader in December 1978, much of the elite already wanted change, and in 1979 he set out the Four Modernizations and the goal of a moderately prosperous society.
Deng called the project a large-scale experiment to be learned by doing. Local trials that worked were copied elsewhere, officials faced little punishment for failures, and success earned national praise, a bottom-up style often contrasted with the Soviet Union's top-down perestroika. Singapore under Lee Kuan Yew was a conscious model, and more than 22,000 Chinese officials went there to study its methods.
Phase one, spanning the late seventies into the early eighties, broke up collective farms and abolished the communes, welcomed foreign investment and let entrepreneurs open businesses, though most industry stayed state-owned. The second, in the late 1980s and 1990s, privatised or contracted out much state industry, with the 1985 lifting of price controls a milestone. Special economic zones such as Shenzhen and Shanghai's Pudong became showcases. A parallel political opening in the 1980s ended with the 1989 Tiananmen protests and their crushing.
Results were dramatic. China joined the World Trade Organization in 2001, and by 2005 the private sector produced as much as 70 per cent of output. The economy grew about 9.5 per cent a year from 1978 to 2013, extreme poverty fell by 800 million people between 1978 and 2018, and a desperately poor country became upper-middle income and the world's leading manufacturer. After 2005, though, Hu Jintao and Wen Jiabao tightened state control and rolled back some reforms.
Source: Reform and opening up
