Abstract the purpose of this paper is to present China as a nation that has gone through several economic phases until it reaches a point that has made several consider this country as a promising future power in the region. While Japan is falling into recession and much of Europe mired in one, greater China has the fastest-growing regional economy in the world. Growth rates in greater China look fantastic by U.S., European or Japanese standards. China today offers a new look and its transformation into a high performing economy is affecting its population. Some think that the reforms are painful but necessary.
Private sector Chinese leaders hope to increase the pool of middle class. The purging of most of socialism's last vestiges will throw many into a desperate search for work and shelter. The income gap between those with the skills and those without will widen. In spite of it all, China's economy is thriving and many are determined to seize the opportunity. Introduction beginning in late 1978 the Chinese leadership has been trying to move the economy from a sluggish Soviet-style centrally planned economy to a more market-oriented economy but still within a rigid political framework of Communist Party control.
To this end the authorities switched to a system of household responsibility in agriculture in place of the old collectivization, increased the authority of local officials and plant managers in industry, permitted a wide variety of small-scale enterprise in services and light manufacturing. The result has been a quadrupling of GDP since 1978 (CIA, 1998). Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods. .
On the darker side, the leadership has often experienced in its hybrid system the worst results of socialism (bureaucracy, lassitude, corruption) and of capitalism (windfall gains and stepped-up inflation).