China 88: The Real China and How to Deal with It

Chapter 7. Companies in China

Under Deng Xiaoping, China initiated large-scale economic reforms in 1978. The reforms aimed to decentralize decision making in the economy, allow markets to operate more freely and permit the entry of foreign firms through their direct investments in China. It sometimes seems China has changed in an instant but a close look at the economy and financial markets shows that the process of reform has been one of slow and steady progress.

Unlike the countries of Central and Eastern Europe, whose transition from communist centrally planned economies to western-style capitalist market economies took place virtually overnight, China chose a gradualist approach for its transition that continues today, more than 30 years ...