In December 1978, the Chinese government announced a shift in economic development policy, ushering in the era of reform. Forty years later, drastic changes have been seen in the domestic economy.
At a time when the planned economy was dominant in China, market forces were gradually introduced, creating private businesses in cities and dissolving communes in rural areas.
Farm workers were allowed to keep excess produce on contracted farmland. As a result, enthusiasm among workers and peasants shot up, as did productivity.
China's economy grew by 9.5 percent a year on average between 1978 and 2017. In just four decades, China has been transformed from a poverty-stricken country to the world's second-largest economy.
On the road of its development, the following four phrases have best described the important components of the country's economic development process.
Household Contract Responsibility System
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Launched in the early 1980s, the household contract responsibility system has led to a huge transformation in the Chinese agriculture production system.
Agricultural output increased rapidly and from a macro perspective, Chinese farmers have autonomy in production and operations, aiding in the development of the rural economy
Private Enterprise
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One of the most constructive changes brought about by China's market reforms was the emergence of private enterprise alongside the state-owned sector.
Private enterprises, which were owned and run by self-employed entrepreneurs, were revived when the country was experiencing a transition from a planned economy to a market or a mixed one after 1978.
Before that, most of the enterprises were owned by the state or public sector, and private business could only operate in certain fields such as retailing, handicraft, food and consumer services.
However, the situation changed once the country embarked on market-oriented reforms in the 1980s, during which time the government started experimenting with private entrepreneurship as a way of sustaining and accelerating economic development.
The emergence of private enterprise later became one of the most important results produced by China's market reforms, contributing significantly to the nation's overall economic growth.
Special Economic Zone
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China established its first special economic zone (SEZ) in the early 1980s when market-oriented reforms were introduced. Seven cities in China have been developed as SEZs, which continue to drive economic growth and serve as a window on reform and opening up.
Shenzhen, for example, is one of the most famous zones located in southern China's Guangdong province. Over the past 40 years, it has been transformed from a small fishing village into a booming metropolis that's home to a number of high-tech firms and manufacturing factories.
Other SEZs have also experienced tremendous development in various economic undertakings.
"Going Global" strategy
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In the “Going Global” era 1.0 more than 10 years ago, when many Chinese enterprises started setting up overseas sales networks, most of them simply engaged in low-end international trade.
It was followed by the “Going Global” era 2.0, during which many state-owned enterprises reached out to the overseas market in areas such as oil and natural gas and overseas infrastructure projects.
The rise of private enterprises turned out to be the highlight of “Going Global” era 3.0, as they directly invested in foreign markets, set up factories overseas, employed local labor, and acquired foreign companies and infrastructure.
For many years, "Going Global" has been a major strategic initiative for the economic development of China. As the strategy enters era 4.0, Chinese private enterprises have become the main driving force with investment diversity and their prominent position within global value chains.
"Going Global" not only helps China become a mainstay of economic globalization but also contributes to the UN global sustainable development agenda.
Since 2013, China has contributed to more than 30 percent of global economic growth annually on average, according to the International Monetary Fund.
When looking back at the reform and opening up over 40 years, China, while making great domestic economic strides, has also built closer ties and expanded win-win cooperation with the rest of the world.
This is part of the "40 Years in Words" special series that examines in keywords some of China's policy milestones, changes in people's livelihood and cultural staples from the country's reform and opening-up to commemorate 40 years of the historic drive.
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