Economic System Reform in China

Abstract

This paper gives a general picture of China’s economic system reform, including its background, problems, policies, achievements and prospects. The necessity and urgent need of the reform is reviewed and the Chinese government’s decision to adopt policies for reforming its economic system is explained. China’s economic reform and stabilization policies are examined from two basic viewpoints: 1. the efforts to find the best way of introducing market mechanism into a centrally planned economy, and 2. the open-door policy that let China play an active part in the international division of labor. The lesson from China shows that an economic system can and should be regarded as an important input for economic growth and development besides labor, capital and technology. Timely and proper economic system reform could greatly increase the efficiency of the economic system utilization.