China’ Rise After 1980: Explaining Factors


Modern international affairs are characterised by increased complexity and the high speed of their development. The world changes rapidly, and new trends in the global discourse shape the policy and relations between states. The bipolar model that had been topical during the second half of the 20th century because of the opposition of the USSR and the USA and their camps was replaced with a new one, characterised by the growing power of new actors that entered the stage and showed their desire to play a significant role in decision and policy-making. China can be considered the brightest representative of this cohort as its power becomes substantial today.

To a greater degree, it is associated with an extremely high speed of economic development and a strong industrial sector, which provides the state with the resources needed to interfere with the majority of international issues and compete with other stable nations such as the USA trying to spread its influence. The ground for such a rise was created in the 1980s due to the beneficial combination of various factors that shaped the Chinese economy.

In general, the economy can be taken as one of the major factors impacting the position of the state at the international level, its influence on other nations, and its role in international discourse. This statement is evidenced by the past example when two superstates the USSR and the USA, determined the paradigm of global relations because of their robust economies. Today, the bipolar model is not topical anymore, mainly due to the fast rise of the South and East, the empowerment of BRICs, and the leading role of the Chinese economy in global export (Jacques, 2012). During the last 40 years, the state had managed to pass the way from a promising country to one of the leading forces that shape international trade nowadays. For this reason, there is much attention devoted to the factors that stipulated such fast growth, their analysis, and research.

The given work is an attempt to explain the fast rise of China after 1980. To accomplish this task, it answers the following question:

What factors preconditioned the high speed of China’s economic development after 1980?

Using it as the basis for the discussion, the paper also establishes several goals which include:

  • the in-depth analysis of major determinants of China’s economic success;
  • discussion of main factors that create the basis for the fast development;
  • improved understanding of the changing state’s role in the world;
  • summary of all findings.

This document integrates information from various sources related to the selected problem and generates knowledge that can be used to answer the proposed question.

The choice of the topic can be justified by several factors. First of all, today, China becomes the actor that determines global relations and policy-making. After the 2008 financial crisis, the world changed, and the traditional distribution of power was also altered. The USA, as an accepted economic leader, faced a fierce rivalry because of the growing influence of the Chinese economy and industry. The nation managed to support the high speed of its economic development and turn into an advantage the situation peculiar to the global economy at that period of time. Moreover, the existing understanding of the state’s power in the global economy is often corrupted because of the impact of the conceptions of bilateral relations between nations (Jacques, 2012).

For this reason, it is critical to acquire a clear understanding of how the state evolved and what factors stimulated its fast evolution. Finally, another factor justifying the selection of the given topic for the discussion is the chance to formulate a successful approach to transformation using the example of China and its recent successes.

To create the theoretical framework for the discussion and acquire an improved understanding of the issue, the literature review is selected as one of the most effective methods of data collection. The chosen sources help to outline factors that played a critical role in the process of transformation and created the basis for the modern success of China. For this reason, credible works are selected for the analysis and further discussion. The offered framework helps to analyse the issue and generate relevant knowledge.

Altogether, the given paper aims at the determination of decisions that preconditioned the high speed of Chinese economic development after 1980. Considering the modern tendencies in the global economy and policy, the path the state passed becomes critical for the enhanced comprehension of its perspectives and future. Today, the USA, Russia, and China pretend to lead roles in the international discourse. Their opposition shapes the world and also impacts the development of the economic sector. To predict the future of this opposition and understand the roles of these states, it is essential to possess extensive knowledge about their economic power as it is one of the major determinants of influence and the ability to impact other actors.

For this reason, the research related to Chinese success becomes important regarding modern international discourse and trends in relations. The given paper promotes the improved vision of how a state can transform into one of leading forces and offers data that can prove the successful or beneficial character of various decisions made by the government to stimulate all sectors of the economy and acquire the desired outcomes. This example can also be applied to other economies to understand their problems or predict future development.

Literature Review

Prior to discussing all factors that shaped the economy and conclusion, it is critical to formulate the framework, including all elements surrounding the topic, the background, and the current state. For this reason, the given section is devoted to the literature review of sources related to the Chinese economy.

A prerequisite for the increased attention to the Chinese economy was a significant shift in its relations with the USA. Jacques (2012) states that the 2008 financial crisis contributed to the creation of a new reality with the leading role of China and its becoming the world’s largest net creditor and with the huge foreign exchange reserves. The inability of the western economies to successfully resist the crisis and recover indicated the start of a new era with the dominance of the Eastern regions and China as its leader (Jacques, 2012). It became the world’s banker, and this event also demonstrated the shift in the balance of power and reconsideration of the global discourse (Jacques, 2012). For this reason, it became critical to understand the causes of this change and factors that preconditioned the fast rise of the Chinese economy.

The state is often taken as the main factor shaping the international discourse today. Breslin (2005) states that some analysts consider it the engine of the growth in the global relations that preconditions their further evolution and will result into China’s transformation in the global hegemon. At the moment, it is the second-biggest economy in the world, and there are forecasts that in the near future, it will overtake the USA (Breslin, 2005).

However, some of these statements can be too optimistic, and the state will slow down because of the peculiarities of its current regulations and policies. For this reason, it is critical to acquire an improved understanding of how the nation evolved and created the basis for the acquisition of the economic superpower status. Breslin (2005) assumes that the major success factors that gave a potent stimulus for the rise of China include the beneficial conditions at the end of the 20th century and search for the new markets and areas that can be used as potential partners for trade and cooperation.

In general, China’s rise from a poor developing country to a world’s leader is surprising. Before the 80s, it had a planned or command economy promoted by Mao Zedong (Morrison, 2019). Almost all spheres and industries were controlled by the state, which presupposed specific production goals, controlled prices, and allocation of resources in accordance with the existing plan (Morrison, 2019).

However, the effectiveness of this approach was doubted because there were no opportunities for the rapid growth, and the country preserved its weak positions at the international level. State-owned enterprises controlled the industrial sector, and private enterprises or foreign investments were strongly prohibited, as well as foreign trade (Morrison, 2019). The prior goal of the Chinese government was to make the economy self-sufficient (Morrison, 2019). The absence of serious successes and the tendency towards the deterioration of the situation, along with stagnation and poor living conditions of the majority of the population, indicated that the given course should be reconsidered to achieve success.

To alter the situation and increase the speed of its economic development, in 1979, China made several steps that created the basis for its future rapid growth. The first factor that helped the nation to become one of the new superpowers was successful domestic policies and economic reforms (Yang, 2013). For instance, in 1978, there was only the People’s Bank of China, which played both the role of a central and business bank (Yang, 2013). However, the model was not sufficient, and reforms formed a new financial sector, including business, policy, investment banks, trust and insurance companies, and other actors (Yang, 2013).

Another radical step presupposed the allowance of private and foreign investment (Yang, 2013). It became one of the main aspects that revitalised the economy of China and provided it with a new stimulus for future development. Entrepreneurs became interested in developing their businesses and contributed to the fast growth of various spheres of the economy and industry.

At the same time, the role of the government was reconsidered. Previously, it was the central regulatory body that offered its own goals for all industries and tried to control their work. With the implementation of new policies, the functions of the government were altered, and a new legal system was created (Yang, 2013). It established beneficial conditions for multiple new enterprises. Kiely (2015) assumes that due to the reforms mentioned above, China entered the stage of marketisation characterised by the growth of production, rivalry, and the increasing importance of market pricing mechanisms.

These aspects fostered the transformation and created a new environment with fair schemes that encouraged actors to engage in competition and become earn more (Kiely, 2015). In such a way, the reforms and domestic policies mentioned above cultivated a new culture and atmosphere that helped to revitalise all sectors of the economy and transform China into one of the leaders in the world economy. Even today, the laws and regulations affecting the state’s industrial, business, or other sectors are taken as extremely effective ones and help to preserve the high speed of the state’s rise.

Another factor that contributed to the creation of the basis for evolution is the opening-up approach. China switched to the principle of gradualism and allowed its markets to open up from the special economic zones, coastal development zones, riparian regions, and other areas (Yang, 2013). It provided multiple advantages to the manufacturing industry and helped the agricultural sector to find resources needed for is evolution and substantial growth (Early, 2019). Due to the employment of this approach, the state managed to enter the WTO, which was a significant achievement for the country that had always been considered a poor one (Yang, 2013). The cooperation with the global market and international partners contributed to the generation of funds essential for the future rise of China. Moreover, it acquired new markets that could be used to export various goods and align the improved cooperation with foreign partners.

As it has already been stated, changes in the international context were another factor that preconditioned the success of China. In general, the decision to initiate radical changes in various spheres appeared due to the influence of external forces. Chow (2018) assumes that the fast economic development in other parts of Asia, such as Taiwan, Hong Kong, Singapore, and South Korea, which became known as the Four Tigers, helped the government of China to realise the weakness of the planned economy in the modern conditions and the advantageous character of market forms. Many countries from the region benefited from the employment of these forms and were able to guarantee their stability and prosperity. This factor impacted Deng Xiaoping, who took control of the Communist Party in 1978 and became the main initiator of reforms.

The situation in the world was also beneficial for China’s entry and transformation. The European countries and the USA did not consider the state their primary rival and were focused on the opposition with the USSR as the leading representative of the opposing camp (Hirst, 2015). The Cold War was in its final part, and the countries of the fast-growing regions acquired their chance to enter the stage and find new partners out of the traditional bipolar system (Lau, 2015). For this reason, China, as one of the most powerful actors of the Asian region, had time and opportunities to reconsider its economy and engage in cooperation with multiple partners across the globe, which guaranteed the existence of stable outlets and markets. The combination of these factors contributed to the fast growth of the economy and its radical transformation.


Finally, the presence of high savings, broad investment, and the powerful financial sector can be considered one more factor that stipulated the success of incentives aimed at the fast development of the economy. Huang and Wang (2018) assume that in terms of the theory of economic growth, the level of savings available for the government is the key determinant of growth. China, during the period of industrialization and the stable rise of income, managed to accumulate a significant amount of savings if to compare with other nations (Morrison, 2019). They become a force that supported new projects and the state’s fast evolution. The existence of this pool also minimised risks related to some possible failures and ensured that various sectors of the economy and industries would be provided with needed resources to continue their evolution.

Altogether, the given literature review shows that the surprising growth of the Chinese economy after 1980 was preconditioned by several factors. First of all, the authors admit effective and successful domestic policies and regulations that radically altered the structure of the economy and allowed private ownership and foreign investment. The constant opening up increased the speed of the development and contributed to the formation of a positive environment.

At the same time, China possessed massive savings that were spent on new projects. Finally, the nation benefited from the changes in the international discourse and managed to use the opportunity to enter the global stage and become one of the leading forces impacting relations. Due to the combination of these elements, the country transformed into one of the most powerful actors that have multiple opportunities for the future rise. At the moment, China preserves the high speed of its growth, and it competes with traditional leaders such as the USA, Russia.

Reference List

Breslin, S. (2005). ‘Power and production: rethinking China’s global economic role’. Review of International Studies, 31, pp. 735-753. Web.

Chow, G. (2018) ‘China’s economic transformation’ in Garnaut, R., Song, L. and Fang, C. (eds.) China’s 40 years of reform and development 1978-2018. Canberra: ANU Press, pp. 93-117.

Early, J. (2019) The rise and future of China as an economic power. Web.

Morrison, W. (2019) China’s economic rise: history, trends, challenges, and implications for the United States. Web.

Hirst, T. (2015) A brief history of China’s economic growth. Web.

Huang, Y. and Wang, X. (2018). ‘‘Strong on quantity, weak on quality’: China’s financial reform between 1978 and 2018’ in Garnaut, R., Song, L. and Fang, C. (eds.) China’s 40 years of reform and development 1978-2018. Canberra: ANU Press, pp. 291-313.

Jacques, M. (2012) ‘The beginning of a new world order’. NewStatesman. Web.

Kiely, R. (2015) The BRICs, US ‘decline’ and global transformations. Basingstoke: Palgrave Macmillan.

Lau, L. (2015). ‘The sources of Chinese economic growth since 1978’. IGEF Working Paper, 40. Web.

Yang, L. (2013) China’s growth miracle: past, present, and future. Web.

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