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Over the past 40 years since China launched reform and opening-up in 1978， earthshaking changes have taken place in this developing Asian country. In 2016， China’s GDP of US$11.2 trillion accounted for 14.8 percent of the world economy， making it the world’s second-largest economy， compared to 2.2 percent in 1976. How could China achieve all this peacefully through internal reforms in the context of the current international order？ What is behind the leapfrog growth of Chinese economy？ Six key drivers have most influenced the success of China’s reform and opening-up：
Choosing a Suitable Path
The path of socialism with Chinese characteristics features two central traits： continuing to develop socialism and embracing Chinese characteristics.
The essence of continuing to develop socialism is seeking shared prosperity. The Chinese government has formulated a series of policies and implemented multiple measures to eradicate poverty. It has successfully lifted some 700 million people out of poverty and is working to achieve the goal of helping the remaining 30 million impoverished people in the country shake off poverty by 2020.
Alongside poverty reduction， fruits have also been achieved in livelihood in several areas： First， with 13 million new jobs provided for urban residents each year， the registered unemployment rate in cities has remained at 4 percent. Second， with increased educational opportunities， the illiteracy rate has dropped below 3 percent from above 30 percent just 40 years ago. Meanwhile， the college-educated population has grown， and its proportion of the labor force has risen to 25 percent from less than 0.5 percent 40 years ago. Third， the social security system has improved significantly， and basic retirement insurance has expanded to cover 85 percent of the country’s population. Fourth， the urban-rural income gap has gradually narrowed since 2011.
Adhering to socialism also has other implications involving public ownership of land， development of state-owned enterprises， relatively strong regulation of economic activity by the government and people-centered development philosophy.
The Chinese characteristics of China’s development path primarily consist of three aspects： First， unlike Western countries， China embraces democratic politics that integrates the leadership of the Communist Party of China （CPC）， the position of the people as masters of the country and the rule of law， while also constantly improving the system of people’s congresses， the system of multiparty cooperation and political consultation under the leadership of the CPC， the system of regional ethnic autonomy and the system of self-governance at the primary level of society. Second， the government plays a vital role in the country’s economic and social progress. Third， some factors deriving from Chinese history， culture and traditions exert significant influence. Socialism with Chinese characteristics is a historical choice for China that fits its specific national conditions. After decades of practice and improvement， the system has proved successful in optimizing and balancing the roles of the government and the market， exhibiting unique advantages. Of course， further improvements are still needed to better coordinate the roles of the government and the market.
Market-Oriented Reform
China’s remarkable achievements over the past 40 years would not have been possible without economic reform， or more specifically， market-oriented reform.
In the early years after its founding in 1949， the People’s Republic of China adopted a development strategy modeled after the centrally-planned economy of the Soviet Union， which resulted in many problems. To address the problems， China began to actively adopt market economy principles while allowing both old and new mechanisms to coexist and complement each other in a bid to promote reform while maintaining social stability.
Over the past four decades， China has continuously deepened its market-oriented reform， and current policy is to further economic reform and let the market play a decisive role in resource allocation. According to the Index of Economic Freedom published by the U.S.-based Heritage Foundation， China received 57.4 points out of 100 in 2017 compared to only 52 in 1995.
Integration with the World
China’s incredible achievements can also be credited to its friendly exchange with other countries since it opened its doors to the outside world. Over the decades， China has progressed across three waves of opening-up. The 1980s and 1990s witnessed the first wave of opening-up characterized by an aim to attract foreign direct investment for infrastructure and industrial projects across the country， especially in coastal areas such as Guangdong， Fujian and Shanghai which enjoyed geographical and cultural advantages. Around the end of 1990s， with foreign investment reaching record levels， China’s position as a “world factory” was cemented.
The second wave emerged after China’s accession to the World Trade Organization （WTO） in 2001 until 2012. During this stage， China accomplished two major tasks： making its trade and investment compatible with international rules so that the world could better recognize China and achieving integration into the global industrial chain and value chain. The ultimate result was China surpassing the United States in manufacturing value added to become the world’s largest manufacturing power， leapfrogging Japan in terms of GDP aggregate. The third wave of opening-up began in 2013 as China proposed the Belt and Road Initiative， heralding a phase of active openness. Over the past five years， early fruits have been reaped in the implementation of the Belt and Road Initiative， through which China hopes to， by utilizing its own capital， technological and talent advantages， team up with other countries to promote policy， infrastructure， trade， financial and people-to-people connectivity， boost mutual support and promotion， better safeguard world peace， pursue open， innovative and inclusive development， enhance dialogue between civilizations and eventually build a community with a shared future for mankind.
Promoting Economic Growth
At the end of 1978， China turned to a new development thought， with focus shifted from class struggle to economic reconstruction. Both the Communist Party of China （CPC） committees and governments at all levels began giving top priority to economic growth， which was regarded as a key indicator for the development of a region and the performance of leaders for a long period of time.
Since manufacturing is often considered a key driving force of economic growth， the central and local governments have attached great importance to boosting the manufacturing industry. However， from the late 1970s through the early 1990s， the lack of capital from inside China coupled with an influx of investment from abroad proved conducive to raising local revenue， creating new job opportunities， increasing local residents’ incomes and stimulating consumption， inspiring local governments across the country to work even harder to lure foreign direct investment.
Along with foreign capital， domestic banks were also targeted by local governments. The governments often spared no effort to convince domestic banks to invest in local enterprises while at the same time building their own financing platforms to fuel the development of local manufacturing sectors and infrastructure to boost their economic growth rate.
Thanks to these efforts， China achieved phenomenal economic growth， registering a GDP growth rate above 10 percent. A group of infrastructure projects were completed， and the manufacturing industry began thriving in urban and rural areas alike. However， issues and problems came along with the breakneck development. For example， many localities suffered serious environmental degradation due to weak environmental awareness， and corruption prevailed among some government officials as they introduced foreign investment or sought financing from domestic banks. Currently， China is making targeted adjustments to fix unbalanced growth with focus on economic outcomes. Solid as a Rock
Another important factor that has helped guarantee China’s 40 years of rapid development is political and social stability. How has China remained so stable given its massive population composed of a multitude of ethnic groups？ Four main reasons can be attributed：
First， the centralized and unified leadership of the CPC has played a pivotal role in maintaining Chinese political stability. The CPC is the ruling party of China and all non-CPC parties participate in the administration of state affairs under the leadership of the CPC， which fundamentally ensures political stability. Organizations of the CPC at different levels covering every corner of the country are engaged in strict policy implementation， effectively contributing to social governance. And， based on nearly a century of experience in social governance， the CPC has explored a set of governance methods suitable for its national conditions. Furthermore， although the CPC made some mistakes in certain historical periods， it remains generally capable of advancing with the times and brave enough to acknowledge and rectify its mistakes， which has won the Party great support from Chinese citizens.
Second， to safeguard social stability， CPC committees and governments at all levels have worked to reinforce leadership in social management across all urban and rural communities.
Third， the government provides adequate financial support， which is also important for ensuring sustained social stability.
Fourth， traditional Chinese culture is helpful in stabilizing Chinese society. The Chinese people always advocate a peaceful culture characterized by harmony rather than conflict. They remain true to the philosophy of moderation and believe “contentedness is happiness.”
A Series of Development Plans
China tends to formulate pragmatic plans for improvements in any realm based on thorough investigation and research. Whether long-term planning for the next 15 or 30 years or five-year goals and even yearly or quarterly objectives， tangible work plans are implemented to transform visions into reality.
The greatest benefit of formulating and implementing plans is helping every citizen understand not just future goals and the development roadmap of the country but also difficulties and problems as well as policies and measures to address the problems， so that pooled forces from around the country can work in concert to tackle difficulties and achieve goals. Since the People’s Republic was founded nearly 70 years ago， the design and implementation of a series of plans have helped solve many problems and usher in a relatively healthy stage of development.
Finally， two points are worthy of special attention： The Chinese people’s diligence and hard work should be remembered as we review and reflect on China’s emergence over the past 40 years. The second point relates to the CPC’s commitment to studying， digesting and absorbing accomplishments of humanity and equipping itself and guiding work with outstanding insight. Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era represents the CPC’s latest theoretical development. I am fully convinced that under the guidance of this Thought， the Chinese people will seize even more remarkable achievements and eventually realize the goal of great rejuvenation of the Chinese nation.
Choosing a Suitable Path
The path of socialism with Chinese characteristics features two central traits： continuing to develop socialism and embracing Chinese characteristics.
The essence of continuing to develop socialism is seeking shared prosperity. The Chinese government has formulated a series of policies and implemented multiple measures to eradicate poverty. It has successfully lifted some 700 million people out of poverty and is working to achieve the goal of helping the remaining 30 million impoverished people in the country shake off poverty by 2020.
Alongside poverty reduction， fruits have also been achieved in livelihood in several areas： First， with 13 million new jobs provided for urban residents each year， the registered unemployment rate in cities has remained at 4 percent. Second， with increased educational opportunities， the illiteracy rate has dropped below 3 percent from above 30 percent just 40 years ago. Meanwhile， the college-educated population has grown， and its proportion of the labor force has risen to 25 percent from less than 0.5 percent 40 years ago. Third， the social security system has improved significantly， and basic retirement insurance has expanded to cover 85 percent of the country’s population. Fourth， the urban-rural income gap has gradually narrowed since 2011.
Adhering to socialism also has other implications involving public ownership of land， development of state-owned enterprises， relatively strong regulation of economic activity by the government and people-centered development philosophy.
The Chinese characteristics of China’s development path primarily consist of three aspects： First， unlike Western countries， China embraces democratic politics that integrates the leadership of the Communist Party of China （CPC）， the position of the people as masters of the country and the rule of law， while also constantly improving the system of people’s congresses， the system of multiparty cooperation and political consultation under the leadership of the CPC， the system of regional ethnic autonomy and the system of self-governance at the primary level of society. Second， the government plays a vital role in the country’s economic and social progress. Third， some factors deriving from Chinese history， culture and traditions exert significant influence. Socialism with Chinese characteristics is a historical choice for China that fits its specific national conditions. After decades of practice and improvement， the system has proved successful in optimizing and balancing the roles of the government and the market， exhibiting unique advantages. Of course， further improvements are still needed to better coordinate the roles of the government and the market.
Market-Oriented Reform
China’s remarkable achievements over the past 40 years would not have been possible without economic reform， or more specifically， market-oriented reform.
In the early years after its founding in 1949， the People’s Republic of China adopted a development strategy modeled after the centrally-planned economy of the Soviet Union， which resulted in many problems. To address the problems， China began to actively adopt market economy principles while allowing both old and new mechanisms to coexist and complement each other in a bid to promote reform while maintaining social stability.
Over the past four decades， China has continuously deepened its market-oriented reform， and current policy is to further economic reform and let the market play a decisive role in resource allocation. According to the Index of Economic Freedom published by the U.S.-based Heritage Foundation， China received 57.4 points out of 100 in 2017 compared to only 52 in 1995.
Integration with the World
China’s incredible achievements can also be credited to its friendly exchange with other countries since it opened its doors to the outside world. Over the decades， China has progressed across three waves of opening-up. The 1980s and 1990s witnessed the first wave of opening-up characterized by an aim to attract foreign direct investment for infrastructure and industrial projects across the country， especially in coastal areas such as Guangdong， Fujian and Shanghai which enjoyed geographical and cultural advantages. Around the end of 1990s， with foreign investment reaching record levels， China’s position as a “world factory” was cemented.
The second wave emerged after China’s accession to the World Trade Organization （WTO） in 2001 until 2012. During this stage， China accomplished two major tasks： making its trade and investment compatible with international rules so that the world could better recognize China and achieving integration into the global industrial chain and value chain. The ultimate result was China surpassing the United States in manufacturing value added to become the world’s largest manufacturing power， leapfrogging Japan in terms of GDP aggregate. The third wave of opening-up began in 2013 as China proposed the Belt and Road Initiative， heralding a phase of active openness. Over the past five years， early fruits have been reaped in the implementation of the Belt and Road Initiative， through which China hopes to， by utilizing its own capital， technological and talent advantages， team up with other countries to promote policy， infrastructure， trade， financial and people-to-people connectivity， boost mutual support and promotion， better safeguard world peace， pursue open， innovative and inclusive development， enhance dialogue between civilizations and eventually build a community with a shared future for mankind.
Promoting Economic Growth
At the end of 1978， China turned to a new development thought， with focus shifted from class struggle to economic reconstruction. Both the Communist Party of China （CPC） committees and governments at all levels began giving top priority to economic growth， which was regarded as a key indicator for the development of a region and the performance of leaders for a long period of time.
Since manufacturing is often considered a key driving force of economic growth， the central and local governments have attached great importance to boosting the manufacturing industry. However， from the late 1970s through the early 1990s， the lack of capital from inside China coupled with an influx of investment from abroad proved conducive to raising local revenue， creating new job opportunities， increasing local residents’ incomes and stimulating consumption， inspiring local governments across the country to work even harder to lure foreign direct investment.
Along with foreign capital， domestic banks were also targeted by local governments. The governments often spared no effort to convince domestic banks to invest in local enterprises while at the same time building their own financing platforms to fuel the development of local manufacturing sectors and infrastructure to boost their economic growth rate.
Thanks to these efforts， China achieved phenomenal economic growth， registering a GDP growth rate above 10 percent. A group of infrastructure projects were completed， and the manufacturing industry began thriving in urban and rural areas alike. However， issues and problems came along with the breakneck development. For example， many localities suffered serious environmental degradation due to weak environmental awareness， and corruption prevailed among some government officials as they introduced foreign investment or sought financing from domestic banks. Currently， China is making targeted adjustments to fix unbalanced growth with focus on economic outcomes. Solid as a Rock
Another important factor that has helped guarantee China’s 40 years of rapid development is political and social stability. How has China remained so stable given its massive population composed of a multitude of ethnic groups？ Four main reasons can be attributed：
First， the centralized and unified leadership of the CPC has played a pivotal role in maintaining Chinese political stability. The CPC is the ruling party of China and all non-CPC parties participate in the administration of state affairs under the leadership of the CPC， which fundamentally ensures political stability. Organizations of the CPC at different levels covering every corner of the country are engaged in strict policy implementation， effectively contributing to social governance. And， based on nearly a century of experience in social governance， the CPC has explored a set of governance methods suitable for its national conditions. Furthermore， although the CPC made some mistakes in certain historical periods， it remains generally capable of advancing with the times and brave enough to acknowledge and rectify its mistakes， which has won the Party great support from Chinese citizens.
Second， to safeguard social stability， CPC committees and governments at all levels have worked to reinforce leadership in social management across all urban and rural communities.
Third， the government provides adequate financial support， which is also important for ensuring sustained social stability.
Fourth， traditional Chinese culture is helpful in stabilizing Chinese society. The Chinese people always advocate a peaceful culture characterized by harmony rather than conflict. They remain true to the philosophy of moderation and believe “contentedness is happiness.”
A Series of Development Plans
China tends to formulate pragmatic plans for improvements in any realm based on thorough investigation and research. Whether long-term planning for the next 15 or 30 years or five-year goals and even yearly or quarterly objectives， tangible work plans are implemented to transform visions into reality.
The greatest benefit of formulating and implementing plans is helping every citizen understand not just future goals and the development roadmap of the country but also difficulties and problems as well as policies and measures to address the problems， so that pooled forces from around the country can work in concert to tackle difficulties and achieve goals. Since the People’s Republic was founded nearly 70 years ago， the design and implementation of a series of plans have helped solve many problems and usher in a relatively healthy stage of development.
Finally， two points are worthy of special attention： The Chinese people’s diligence and hard work should be remembered as we review and reflect on China’s emergence over the past 40 years. The second point relates to the CPC’s commitment to studying， digesting and absorbing accomplishments of humanity and equipping itself and guiding work with outstanding insight. Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era represents the CPC’s latest theoretical development. I am fully convinced that under the guidance of this Thought， the Chinese people will seize even more remarkable achievements and eventually realize the goal of great rejuvenation of the Chinese nation.