ABSTRACT
The interacting forces of industrialization, urbanization, marketization and globalization have transformed China's economy and society in the period since 1978. This chapter examines how that process unfolded and where it leaves China today. Four key points can be made to frame the analysis. First, China's socio-economic transformation is still an ongoing process. Second, there has never been a "grand plan" to guide development. Third, the process has seen several cycles of over-heating followed by cooling down, accompanied by a tug-of-war between ideology and economic reality which continues today. Fourth, the whole process has been profoundly influenced by Deng Xiaoping. Deng's vision of an open China represented a profound departure from the previous closed-door policy which was influenced by China's century of humiliation and grounded in a philosophy of "strategic self-sufficiency". When Xi Jinping took over as the fifth-generation paramount leader in 2012, a Gini coefficient of 0.47 and rampant corruption were eroding the legitimacy of the political system.
