Economic Restructuring

The new wave of modernization in the name of economic reform has introduced significant change in Chinese society and the economy. The move towards an outward-looking, market-driven economy has involved micro- and macroeconomic reform measures, including the decollectivization of agriculture, the decentralization of economic decisionmaking, encouragement for the growth of the non-state sector, enhancement of the incentives for profitmaking among enterprises, and the adoption of liberal economic and fiscal policies. The measures have been implemented in a piecemeal, yet consistent fashion. ‘Shock therapy’ has not been applied, but new initiatives are constantly being undertaken. The reform process has proved to be protracted: nearly 20 years have passed since the onset of reform. Yet, as has been officially recognized, much remains to be done. The transition from the central planning system has turned out to be much longer than the transition to the central planning system.