In the late 1970s China embarked on economic reform, gradually transforming what was originally a centrally planned system into a more liberal one. As a result, in 2010 China stood as the second-largest economy in the world. Many aspects of a market-oriented system are now in place: competitive commodity and labor markets, the development of stock exchanges, a rapid growth of the private sector, and opening up to foreign trade and investment. Some observers believe that China is on the right track toward a market economy. They also believe that economic reform will finally bring about political reform – that a Taiwan style democratic China will emerge in the mainland. However, this is not what the initiator of reform – the ruling Chinese Communist Party (CCP) – wants.
This article shows that the Communist Party initiated economic reform for its own survival and the continuation of its one-party governance. The Party used private ownership, foreign capital, and a competitive market to strengthen the socialist system instead of deviating from the socialist path, and it is now using its economic success to justify the one-party political system.