ABSTRACT
This chapter explains the transition and strategy towards a market-oriented system and construction of a policy system. It examines the three main issues of Chinese transition, which are rural reform, urban reform and the open door policy, and then investigates the relations between them. The chapter considers the situation of inland development strategy and analyzes the possibility of inland development. It concentrates our attention on the Deng Xiaoping development system, for which we would indicate that the key concept of the system was the wisdom of creative destruction. In order to succeed with gradual transition, it is important to have a leader who can reset the logic of initial reform, have a reasonable priority of reforms, and a systemic point of view. Ordinary party members might have dissatisfaction and complaints about this state of affairs. The cultural revolution showing serious defects in the political and economic system was redressed, which was how the reform and open door policy all started.
