ABSTRACT

China has been the world’s fastest growing economy for over three decades. The rapid growth has been accompanied by a significant reduction in poverty, an improvement in most measures of wellbeing, and an increase in the share of world trade and production. The rapid growth has been largely the result of embracing market competition, opening to foreign trade and foreign direct investment, the high level of savings and investment, and local entrepreneurship. However, despite the impressive economic performance for over three decades, China remains in the ranks of the world’s low-income economies.1 China faces serious challenges in many social, economic, environment, and energy arenas as well as major institutional and political obstacles to sustainable economic development and political development in the long term. Therefore, political science students often ask such questions: Is China still a socialist economy or a capitalist market economy? What are the most significant changes in the Chinese economic system compared with Mao’s China? What are the institutional and political obstacles to China’s sustainable economic growth and political development in the long term? In what follows, we will examine what has changed and what has not, and evaluate the nature and magnitude of change over the past three decades in post-Mao China.