ABSTRACT
In late 1978, the leadership of the Chinese Communist Party (CCP, the Party) began a process of reform that has fundamentally transformed the country’s economic system. The former command economy has been gradually dismantled and markets have been introduced. However, while market reform may, from the vantage point of the late 1990s, seem to be the product of a coherent strategy, leaders and policy makers have admitted that they did not set out with a blueprint.1 At first, leaders were responding to particular economic problems that had emerged within the planning system in the late 1970s (though they had political reasons for doing so),2 and their aim was the ‘socialist modernisation’ of agriculture, industry, science and technology, and defence.3 They therefore channelled resources toward agriculture, consumption and light industry, and tried to make better use of human resources by increasing material incentives. When economic growth ensued, leaders were encouraged to press on with further readjustments, and the reforms gradually evolved in a piecemeal fashion as new initiatives were developed in response to emergent political and economic needs and constraints, a method the leadership has called ‘crossing the river by feeling for stones’.
