Reflections on China's reforms

Forty years ago in December, Deng Xiaoping delivered his historic speech: "Emancipate the mind, seek truth from facts and unite as one to face the future." This triggered four decades of reform and opening-up that have transformed China into the world's second-largest economy. By some time in the next decade, China will be among the few countries in the world that will have transitioned from low-income to high-income status since World War II.

Understanding the path China has traveled, the circumstances under which historical decisions were made, and their effects on the course of China's economy will inform future decision makers. Increasingly, this reflection is important to the rest of the world as more and more countries see China as an example to emulate. At the 19th National Congress of the Communist Party of China in October 2017, China accepted this mantle for the first time since the onset of reform and opening-up.

In some ways, China's reforms were fairly mainstream. The country opened up for trade and foreign investment, liberalized prices, diversified ownership, strengthened property rights, kept inflation under control, and maintained high savings and investment.