ABSTRACT
The GFL theory stems not only from thinking about China’s economic miracle over 30 years’ reform and opening up but also from the introspection of the theoretical systems of modern economics. Economists have generally concluded that the current mainstream economics cannot provide full explanation for China’ rapid economic growth over the past decades. Mainstream economic theories have presented fundamental flaws in analyzing economic issues concerning transformation and development, such as failures to provide reasonable explanations for the effects of China’s reform of the double-track system and for China’s sustained high rate of economic growth. Some well-known economists in the mainstream economics have even made misdiagnoses and forecasts about China’s economic transition. Why have there been misjudgments and erroneous explanations about the phenomena in China’s reform and opening up? It is mainly due to the flaws of existing economic theories, which call for theoretical innovation.
