The Transformation of the Chinese Economy

The chapter presents an analysis of the growth of the Chinese economy since the late 1970s, and the various phases of economic reform during that period. It shows the ways in which China became increasingly integrated with the global economy through trade and inward investment, and later, by outward foreign direct investment. Key aspects of the economic reforms discussed are those of the financial sector that led to the creation of the policy banks, and enterprise reform, leading to changes in the management of state-owned enterprises and the growth of the private sector. Developments in the Chinese labour market affecting employment, wages, and productivity are also considered. Finally, the negative environmental impacts of China’s rapid economic growth and the responses to it are discussed.