30 Years of Reform & Opening up and Looking forward LSE, 3 December 2008

In December 1978, the Chinese government shifted its priority from political struggle to economic development, thereby initiating a new era of reform and opening up in China. Deng Xiaoping: We must catch up with the times, and this should be the objective of the reform.

I. Four stages of reform and opening up The initial stage: from December 1978 to September 1984 The period of comprehensive progress: from October 1984 to January 1992 The period of institutional innovation: from February 1992 to October 2002 The period of ‘storming the fortress’: from October 2002 onward

The initial stage: The reforms started in the rural areas. Farmers obtained the right of land use

4 special economic zones set up 14 coastal open cities designated The three-stage strategy put forward by Deng Xiaoping SHENZHEN

The second stage: Reform priority shifted to the cities Reform of state owned enterprises introduced

Township and village enterprises flourished Special economic zone in Hainan and development area of Pudong, Shanghai declared

The third stage: The objective of ‘a socialist market economy’ embraced Reform of SOEs a major priority

Accession to the WTO The principle of building rule of law enshrined in Constitution

The fourth stage: Further improvement of the socialist market economy The objective of building a moderately prosperous society

The theory of scientific outlook on development Protection of lawful private property enshrined in Constitution

II. major achievements of reform and opening up Sustained and fast growth and qualitative leap of comprehensive national strength

Farewell to the shortage economy and explosion of consumption

Substantial reduction in poverty

Close integration with the global economy

A vibrant and dynamic economy and society

Progress in building democracy and rule of law

III. experiences gained in the past 30 years Clearly defined objectives and Scientific outlook on development Three-step strategy ： First step: doubling per capita GDP during the 80s from $250 to $500. Second step: doubling per capita again by the end of the 20 th century to $1,000 and increasing overall GDP to $1 trillion, turning China into a moderately prosperous society. Third step: quadrupling per capita GDP to $4,000 in 30 to 50 years.

Adherence to reform and opening up in light of China’s national conditions

Improving living standards and social stability

Commitment to peace, development, cooperation and win-win outcome

IV. Major challenges and difficulties facing China Pressure of population and employment

Resource scarcity and environmental pollution

Uneven urban-rural and regional development

Imbalances in economic structure

V. the Chinese economy amid the global financial crisis 2008 is termed ‘the most difficult year’ for the Chinese economy.

The financial crisis is hitting China. Many SME closures this year China’s counter-measures: a six hundred billion dollars stimulus package

VI. Prospects in the coming 10 to 20 years Development programme and strategy

Stability in macroeconomic management Upgrading of industrial structure

More efficient use of resources and lower energy intensity

Central and western expansion LANZHOU

Fast urbanization

Expanding Transport Infrastructure

Better public services in education and health care

Higher standard of living for all the people

Emerging civil society

VII. factors underpinning sustained growth in China abundant labour force a big domestic market

rich capital reserves (savings and foreign exchange reserve)

30 Years of Reform & Opening up and Looking forward LSE, 3 December 2008