China’s Economic Transformation Into Capitalism In 1990s

Abstract or Introduction

The history of the transformation of China from socialist to a capitalist economy remains a tale to most economic analysts, yet reality has it that the country has come out of the woods to harness its economic dividend. It is interesting to narrate the trends of leadership change in China which has made it one of the world’s fast developing economies. No one would have imagined China could break free from the cords of socialism and join the capitalist global economy. This is why Coase and Wang remarks, “No one foresaw that the “socialist modernization” that the post-Mao Chinese government launched would in 30 years turn into what scholars today have called China’s great economic transformation”.

Surprisingly, this transformation has already occurred, and this phenomenon is attributable to a series of economic reforms that have occurred over the last three decades. It is argued that China became capitalist in 1990s; the controversy over China’s transformation lies on the border between socialism and capitalism. This controversy is reflected whenever policymakers attempt to answer the question, “Did China become capitalist in 1990s?” Therefore, this paper will provide a comprehensive overview of the transformation of China into a free market economy. It will evaluate how socialist modernization in the mid 1970s led to the attainment of capitalist characteristics in 1990s.