Chinese economic reform Facts for Kids

The Chinese economic reform (also known as Chinese: 改革开放; pinyin: Gǎigé kāifàng; lit. 'reform and opening-up') was a big change in how China's economy worked. These changes happened in the People's Republic of China from the late 1970s to the 1990s.

The Communist Party of China led these reforms, with Deng Xiaoping as a key leader. They officially started in December 1978. These changes were sometimes called "Socialism with Chinese characteristics."

Why China Needed Change
How China Changed Its Economy
- First Steps (1970s and 1980s)
- More Freedom (1980s and 1990s)
What Happened After the Reforms?
Images for kids
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Why China Needed Change

For a long time, China had one of the biggest and most advanced economies in the world. But by the 20th century, things started to slow down. The economy even got worse. This was partly because of big wars like the First Sino-Japanese War and Second Sino-Japanese War. China needed a new plan to make its economy strong again.

How China Changed Its Economy

To fix the economy, the Communist Party brought in new ideas. They started using market principles in 1978. This meant allowing more freedom for businesses and people.

First Steps (1970s and 1980s)

In the 1970s and 1980s, the government made some important changes:

They stopped telling everyone exactly what to farm. Farmers could now decide more for themselves.
Young people were no longer forced to move to the countryside.
China opened its doors to money from other countries. This allowed foreign companies to invest in China.
People were allowed to start their own businesses.

However, the government still owned most of the big businesses.

More Freedom (1980s and 1990s)

In the 1980s and 1990s, China allowed even more private control over businesses. This meant less government control, a process called privatization.

They removed price controls. This meant prices for goods could be set by the market, not just the government.
They also removed protectionist policies and rules that made it hard for foreign goods to enter China.
However, some important areas like banking and oil stayed under government control.

What Happened After the Reforms?

The changes worked very well! Businesses owned by private people grew a lot. By 2005, they made up 70% of China's total economic output (called GDP).

From 1978 to 2013, China's economy grew incredibly fast. It increased by 9.5% every year! This was a huge jump.

After 2005, leaders like Hu Jintao and Wen Jiabao started to control the economy more again. Later, Xi Jinping also brought back more government control in some parts of the economy.

These reforms changed Chinese society a lot. They helped many people get out of poverty. The average income for people also went up. These changes also helped China become a major world power.

Images for kids

In 1992, a market in Xinjiang showed slogans about "reform and opening-up."
The image of Deng Xiaoping in Shenzhen, one of the first special economic zones.
Hu Yaobang, a key leader, helped make the reforms happen.
Shenzhen, a special economic zone and a hub for technology companies.
The slogan "Time is money, Efficiency is life" from Shekou, Shenzhen, showing the speed of change.
The Lujiazui financial district in Pudong, Shanghai, a major business center.
China's total economic output (GDP) from 1952 to 2015. See the fast growth after the reforms.
How much wheat China produced from 1961 to 2004.
Where Chinese goods were sent around the world in 2006.
The Shanghai Stock Exchange.
The Shenzhen Stock Exchange.
A discussion about China's future plans at the World Economic Forum (2013).
Roberto Azevêdo from the World Trade Organization met with China's Minister of Commerce Gao Hucheng.
Air pollution became a problem as the economy grew. This picture shows haze in Lujiazui, Shanghai.