There are quite a few articles about reforms or articles about other topics but which mention one reform or another here on ChinaFund.com. For the sake of clarity and seeing the big picture, it would perhaps be wise to glance over a quick timeline when it comes to significant events/reforms in China. While by no means exhaustive, the list below should help you understand just how meaningful the transformation of China has been over the past decades:
- 1978, one of the most important years in Chinese history, with the 11th Central Committee of the Communist Party of China holding its 3rd plenary session in Beijing back in December of 1978, shaping policies aimed at modernizing China and including it in the worldwide economic ecosystem as of 1979
- 1979, the year as of which this actually happened, with the first special economic zones appearing
- 1982, with the household responsibility system representing perhaps the first rural reform initiative, treating households as a unit with whom a contract is established, with the goal of moving from a subsistence-based system to a more efficient one
- 1986, the year as of which significantly more autonomy was granted to enterprises as a result of the reform on enterprise ownership, with trials which initially only included a few entities but then expanded
- 1992, the year of Deng Xiaoping’s famous southern China tour, through which he vigorously promoted his reforms and the need to actually take things even further
- 2001, the year in which China finally became a World Trade Organization member, the 143rd member of the WTO, to be more precise, paving the way for China to become one of the top beneficiaries of globalization
- 2013, the year in which China articulated its Belt and Road Initiative as well as got ready for the launch of the AIIB (Asian Infrastructure Investment Bank). 2013 is also the year in which the very first free-trade zone was released in China on a pilot basis, with 11 of them existing at this point (Shanghai, Tianjin, Fujian, Guangdong, etc.)
- 2015, the year in which the International Monetary Funds decided that the Renminbi was ready to be included in its SDR (Special Drawing Rights) basket of currencies. In other words, perhaps the foundation with respect to China’s role in the worldwide monetary system started being established
- 2017, the year of the 19th National CNP Congress, with its commitment to modernization and the tweaking of the so-called socialism with Chinese characteristics
- 2018, the year of the first China International Import Expo, an event with a significant symbolic meaning aside from the pragmatic projects it brought about, an event through which the authorities tried to make it clear that China is interested in both dimensions of trade rather than just exports
While by no means exhaustive, the list above makes it clear that China has come a long way since it decided to embark on its journey toward modernization back in 1978. From reforms when it came to its antiquated rural agriculture infrastructure to granting companies more and more autonomy and, finally, moving away from excessively export-dependent growth to a system which places much more emphasis on domestic demand, the Chinese economy has matured tremendously over the past 40 years.
While, as illustrated by the commitments made at the 19th CNP National Congress, there are still steps which need to be taken with respect to deep reforms and meaningful modernization, a very compelling case can be made that China is on the right track. From today’s performance of China’s economy to the various geopolitical developments which are unfolding (including less than pleasant ones such as the United States situation), situations and realities need to be analyzed with a “big picture” outlook and this timeline provides just that.
As tempting as it may be to use terms such as “unsustainable” when it comes to the various sectors of the Chinese economy in light of the explosive growth they have experienced, one cannot help but notice that “unsustainable” developments have been taking place since 1978, propelling China to position #2 in terms of nominal GDP and position #1 as far as the PPP GDP dimension is concerned, with ample room to grow. While there have been bumps along the road and will most likely continue to be at various points, it always helps to take a step back and realize just how far China has come.