Notwithstanding the vast expanse of China, the abundance of its natural resources, and its substantial population representing approximately 20% of the global populace, China’s influence on the world’s economic stage remained modest until the latter part of the 20th century. However, since the reform and opening-up policies initiated in the late 1970s, China has markedly expanded its engagement with the international economy, ascending to a pivotal position in global trade. The nation has witnessed consistent and robust growth in both its foreign trade and Gross National Product (GNP), particularly following the influx of foreign-owned enterprises utilizing China as a manufacturing and export hub. By 2010, China had risen to become the world’s second-largest economy, thereby cementing its status as a significant economic force globally.

The Chinese economic landscape has been undergoing a transformative phase since the late 1970s, transitioning from a centrally planned system reminiscent of the Soviet model. This period has seen the decollectivization of agriculture, a burgeoning non-agricultural private sector, and a governmental shift in focus towards the development of light industries and high-technology sectors. Despite these advancements, growth has been impeded by several critical challenges. The nation’s energy supply has proven insufficient for its full industrial capacity, its transportation infrastructure has struggled to distribute essential commodities such as coal efficiently, and its communication networks have been unable to fully support the demands of an economy of China’s magnitude and intricacy.

China’s underdeveloped transportation infrastructure, coupled with regional disparities in natural and human resources as well as industrial capabilities, has led to pronounced economic variations across its territories. The most affluent regions include the Pearl River Delta in the southeast, the lower Yangtze River area in the east, and the Beijing-Tianjin-Liaoning region near the Bo Hai Gulf. The swift progression of these areas significantly influences the broader Asian regional economy, and Chinese policy is actively aimed at eliminating barriers to foster accelerated growth in these more prosperous zones. Concurrently, a principal objective for the government is to promote the economic advancement of China’s interior regions to narrow the gap with the coastal areas.

China stands as the world’s preeminent producer of rice and a major source of wheat, corn, tobacco, soybeans, peanuts, and cotton. It also ranks as a leading producer of various industrial and mineral products, including cotton fabric, tungsten, and antimony, and is a notable producer of cotton yarn, coal, crude oil, among other commodities. The country’s mineral wealth is among the richest globally, yet it remains underexploited. Through foreign investments and partnerships, China has secured advanced production facilities, leading to rapid and significant enhancements in the technological sophistication and quality standards of its industries.

Nevertheless, the labor market and pricing mechanisms continue to present challenges. Underemployment is prevalent in both urban and rural settings, and there is a palpable concern regarding the potential destabilizing impact of widespread joblessness. While the state still sets prices for certain essential commodities, particularly industrial materials and key industrial products, the proportion of such commodities regulated by the state is on the decline. Energy remains a notable exception under stringent government control. China’s deepening integration with the global economy and its incremental shift towards market-driven domestic resource allocation have intensified these issues. Historically, substantial subsidies were embedded within the pricing structure, escalating from the late 1970s to the early 1990s. The trend towards subsidy reduction commenced in the early 1990s, further propelled by China’s accession to the World Trade Organization (WTO) in 2001, which entailed commitments to greater economic liberalization and government deregulation.