China’s Transformation towards Capitalism

Since embarking on a programme of economic reform in late 1978, China has moved, albeit in an incremental fashion with periodic stops and starts, towards market capitalism. In 1993 the Chinese Communist Party (CCP) deleted the description of China as a planned economy under public ownership from the state constitution, proclaiming it a ‘socialist market economy’. Further amendments legitimated the ownership rights of private entrepreneurs (1999) and the sanctity of private property (2004). In a related development, entrepreneurs were granted the right to join the CCP in 2002. While China undoubtedly constitutes an example of economic transformation from the Soviet-style planning system, its experience must be distinguished from that of its former socialist brethren. First, most obviously, China was one of the few remaining examples, at least ostensibly, of a Marxist-Leninist state, governed by a Communist Party. Secondly, China was still, despite a record of remarkable growth, a developing economy, setting it apart from the states of Eastern Europe and the more industrialized states of the former Soviet Union.