ABSTRACT
With the consolidation of Deng Xiaoping's position at the Third Plenum in 1978, the reformist leadership was able to embark upon a programme of reforms which entailed greater reliance on market forces, both domestic and foreign. The Open Door Policy refers to the set of policies adopted since 1978 in the spheres of foreign trade, foreign investment and foreign borrowing. The process of opening up has not only led to a rapid expansion in China's economic ties with the West and Japan but has also had repercussions in the socio-political domain. These can be observed in the changing role of the state with regard to foreign economic relations.
