ABSTRACT
The salient feature of China's economic reform after 1979 is the gradual transition from a centrally planned to a market economy. The transition involves changes in almost all aspects of the economic regime, from the micro to macro levels. The replacement of the previous heavy-industry oriented development strategy by the comparative advantage oriented or outward-looking strategy is regarded as one of the most successful element of China's economic reform. Between 1979 and 1995, China's total trade grew at an annual rate of 12.5 per cent. This not only made China one of the world's most important trading partners but also fostered significant growth in domestic income. 2
