Since 1978 the Soviet-like central planned economy of China began to move to a more market-oriented system. Though the political system still is under power of communist ideas, the economic influence of non-state organizations and individual citizens has been steadily increasing. In industry the small enterprises were permitted soon, in services and light manufacturing, and opened the economy to increased foreign trade and investment. The results were not great but substantial.
In 2003 China appeared to be the second-largest economy in the world after the US (measured on a purchasing power parity basis). In industry and agriculture it has reached a lot, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment has helped to increase the domestic and export goods sale. The leadership, however, often has experienced - as a result of its hybrid system - the worst results of socialism (bureaucracy and lassitude) and of capitalism (windfall gains and growing income disparities).
Severe periods of stagnations had occurred, the country control was tried to be grasped by communist party. The government has reached the following:
(a) received substantial profit from provinces, small business, and individuals;
(b) decreased corruption and a number of other economical crimes;
(c) saved huge governmental companies keening them from the bankruptcy, though many of them were in stagnation nit even capable to pay the taxes.
A lot of money had been invested in rural areas of the country. That became possible due to the surplus from the word of industrial cities, the unemployment was substantially diminished. Popular resistance, changes in central policy and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining long-term growth in living standards. But the country continue to progress.
One of the biggest problems of China is a problem of environment, i.e. air and water pollution, notably air pollution, soil erosion, and the steady fall of the water table especially in the north. That can cause the epidemiological situation in the long run. Because of the industrial economical development and erosion, the country looses agricultural lands.
The capital of the country – Peking – assures to intensify efforts to stimulate growth through spending on infrastructure - such as water control and power grids - and poverty relief and through rural tax reform aimed at eliminating arbitrary local levies on farmers. But the results are expected today.
Accession to the World Trade Organization helps strengthen China's ability to maintain strong growth rates but at the same time puts additional pressure on the out of date system of post dictatorship communist control and growing market influences.
China has benefited from a huge expansion of electronic supplies. Foreign investment remains a strong element in China's remarkable economic growth. Hope it will remain so in future too.