Economic Modernization and Liberalization in China

Economic modernization in China began during the era of Deng Xioaping, who abandoned rigid adherence to communist dogma in favor of a more pragmatic approach that would "unleash the tremendous working capacity of the peasants." This included a gradual phasing out of government economic restrictions and an increase of trading contacts with the West.

The Chinese regime has steadily shifted toward a policy more overtly welcoming of capitalistic developments. Jiang Zemin's "three represents" theory, for example, has broadened the party's class restrictions to include entrepreneurs and the "advanced productive forces" of China.

The transition to a true market economy can take place only once China finalizes its dismantlement of protectionism for uncompetitive domestic firms. This, however, has angered and will continue to anger hard-liners within the party who possess vested interests in these industries. The opening of China to a global economy will displace these entrenched oligopolists and create a period of immense social mobility and a merit-based economic structure where the most productive individuals will assume the top positions.

The Communist Party is quick to take credit for China's recently booming economy, and many of its official statements, including those by the current Chinese ambassador to the U.S., proclaim that without the Party's guidance, modernization and liberalization would not have been possible. A more comprehensive analysis, however, yields that the party's sole contribution has been keeping out of the way of development and becoming a more economically tolerant and non-interventionist government. It was no proactive measure by the party, but rather its lack of proactive behavior that has resulted in conditions conductive to a capitalist economy.