China's Reforms at Twenty-five: Challenges for the New Leadership

While the precise starting point of China's reforms is rather difficult to pinpoint, a series of crucial events—ranging from the famous 3rd Plenum in 1978 and 5th Plenum in 1980, to the 1981 "Decisions on Some Historical Problems of the Party Since Its Inception" and the 12th Party Congress of 1982—were perhaps collectively responsible for the evolutionary path in which China's reforms were gradually shaped as the policy platform that we know today. Irrespective of the timeframe chosen, there is no denying that China's reforms in the last two and a half decades have been remarkably successful. Its impressive accomplishments are further highlighted when juxtaposed with the successive fiascos of the Maoist "egalitarian" experiments as well as with the postsocialist troubles in which Russia has found itself.

A wide range of measures and indicators are available to suggest that China's economic reforms have been a remarkable success. The 9.4% average annual GDP growth rate for the 1978 to 2000 period is very impressive as it is almost three times that of the world at large (3.3%). China is currently the largest producer of television sets, air conditioners, cameras, and telephones. China ranks 2nd in terms of total foreign currency reserves that reached $250 billion in late 2002. China's economy ranks 6th in terms of total GNP and total volume of foreign trade. When purchasing power parity (PPP) is used, China's economy ranks 2nd only to the United States. If China maintains an average annual growth rate of 5% or more over the next decade, it will certainly surpass Britain, France, and Germany, if not Japan also, by 2010.

China has indeed become, as Lee Hsien Loong, Deputy Prime Minister of Singapore, aptly put it, "the biggest new variable in the global equation." On top of being a permanent member of the United Nations' Security Council and the exclusive "nuclear club," China is slowly but undeniably strengthening its foothold in various regional and global issue-areas. Regionally, during the late 1990s, it displayed leadership potentials by not devaluing its currency during the financial crisis that engulfed East Asia. China has also been very active in participating in a wide range of multilateral institutions, including ASEAN plus three, and the Four-Party Talks on Korean Peninsular issues. Furthermore, China has made efforts to create multilateral forums of its own by establishing the Boao Asian Forum and the Shanghai Cooperation Organisation (or the "Shanghai Six").

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