STAGES AND CHARACTERISTICS OF THE MARKET TRANSFORMATION OF CHINA'S ECONOMY: FROM AGRARIAN REFORMS TO INDUSTRIAL MODERNIZATION

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Abstract

This article examines the stages of market transformation in the economy of the People’s Republic of China from 1978 to the early 2020s. It asks how changes in agricultural incentives, regional experimentation and the gradual opening of the economy reshaped production and trade. The study combines comparative historical and institutional analysis with published evidence from the World Bank, the World Trade Organization and scholarly literature. Four analytical phases are identified: rural reform, enterprise restructuring and coastal opening, integration following WTO accession, and the search for innovation driven growth. The household responsibility system strengthened incentives for rural producers, while special economic zones enabled policy experiments within limited territories. Export manufacturing expanded employment, capital accumulation and participation in international production networks. These achievements were accompanied by distributional disparities and constraints related to environmental costs, population ageing, debt and the role of state owned enterprises. The article argues that China’s experience was shaped by the interaction of gradual reform and deliberate institutional change. Its future prospects depend on domestic demand, competition and effective social protection.