China’s Transition from Socialist Economy to Capitalism: The Role of Deng Xiaoping and Economic Reform Since 1978

Abstract

This paper examines Deng Xiaoping's role in China's economic reforms, focusing on the Communist Party's (CCP) crisis under Mao Zedong, which was characterized by Cultural Revolution failures and socialist economic stagnation. The study assesses China's economic reform policy under Deng Xiaoping, highlighting his pragmatic approach and acknowledging policy limitations, which significantly impacted China's economic trajectory. The study uses a descriptive approach and thematic analysis to identify traditional socialist policies that align with capitalism or planning, utilizing secondary sources from 1980 and 2000.The study found that planning mechanisms and market dynamics drive growth and navigate economic challenges, with economic reinforcements and policies showing the strongest correlations, suggesting further research is needed in some nations. The study also found that cultural factors play a significant role in shaping economic outcomes. It concluded that a holistic approach is necessary to fully understand economic development. The study suggests that China's communist system necessitates a delicate balance between market dynamics and communist principles, posing a significant challenge to economic reform.