China’s Reform and Opening-up Policy was adopted at the Third Plenary Session of the Eleventh Central Committee of the Chinese Communist Party in December 1978, with an emphasis on economic reform to adjust and improve the existing framework of the planned economy. This new policy of Reform and Opening-up began to gain official recognition after the Second Plenary Session of the Twelfth Central Committee of the Chinese Communist Party in June 1993.
The primary goal of the Reform and Opening-up Policy was to introduce market reforms into the Chinese economy and to open up to foreign investment and technology. It was hoped that the policy would attract foreign investment while allowing Chinese enterprises to benefit from increased competition.
The introduction of this policy marked a major turning point in Chinese economic history. In the three decades since its adoption, the Reform and Opening-up Policy has led to remarkable economic growth, significantly reduced poverty and raised living standards among Chinese citizens. By 2007, China had become the second largest economy in the world (in terms of Purchasing Power Parity).
The short-term effects of the policy were significantly felt in the form of increased production and higher prices for grain, manufactured goods, construction and new technology products, leading to increased economic growth.
The long-term effect of the policy was the development of a modernized economy with a strong urban base and a better educated population. As part of the Reform and Opening-up Policy, the government introduced the Four Modernizations–agriculture, industry, science and technology, and defense–allowing China to join the World Trade Organization in 2001 and to become one of the world’s largest exporters.
Reform and Opening-up also saw the emergence of private enterprise and foreign direct investment, with both domestic and external investors pouring money into the Chinese market. This new source of capital allowed for more rapid economic growth.
At the same time, the Reform and Opening-up Policy spurred rapid urbanization, driving millions of rural residents to cities in search of better jobs, education and opportunities for personal development. Along with this rural-to-urban migration came problems such as overcrowding and pollution; however, the Reform and Opening-up policy has provided many Chinese citizens with higher incomes and better living standards.
In addition to spurring economic growth, the Reform and Opening-up Policy brought with it a wave of social changes. These included the establishment of an independent legal system and the end of state censorship. The policy also gave citizens more freedom of speech, movement and religion.
Since 1978, the Reform and Opening-up Policy has been the cornerstone of China’s economic and social progress. It is credited with lifting hundreds of millions out of poverty, making education and healthcare more accessible, and increasing wages and purchasing power. The policy has also helped to integrate the Chinese economy into the global marketplace, allowing the country to become a major player in the world economy.