Institutions, Growth and Imbalances
Chapter 1: Introduction: the reform and opening-up of a large, developing country
Rapid growth accompanied by unbalanced development is the best way to describe the path taken by a large, developing country over the past 30 years – China. Even today, China is constantly adjusting its system to accommodate ever-changing challenges. In 1978, China had just completed the Great Proletarian Cultural Revolution and the country was in the very earliest stages of its reconstruction. The green shoots of change began to appear quietly in the spring, although at the time most people did not notice. In December, the Communist Party of China (CPC) held the Third Plenary Session of the 11th Central Committee, which announced the prolog of the reform and opening-up policy. Eleven years later, after the serious political disturbances of 1989, the whole country regarded the concept of market-oriented reform with great suspicion and mistrust. In 1992, Deng Xiaoping, speaking in southern China, remarked, ‘For a big, developing country like China, rapid economic development cannot always be accompanied by smoothness and stability … Development is the foremost and essential principle’ (Deng Xiaoping, Vol. III, 1993, p. 377).