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The economic history of China describes the changes and developments in China's economy from the founding of the People's Republic of China.in 1949 to the present day.
China has been the fastest growing economy in the world since the 1980s, with an average annual growth rate of 10% from 1978 to 2005, based on government statistics. Its GDP reached $USD 2.225 trillion in 2005. Since the end of the Maoist period in 1978, China has been transitioning from a state dominated planned socialist economy to a mixed market socialist economy. This transformation required a complex number of reforms in China's fiscal, financial, enterprise, governance and legal systems and the ability for the government to be able to flexibly respond to the unintended consequences of these changes.This transformation has been accompanied by high levels of industrialization and urbanization, a process that has influenced every aspect of China's society, culture and economy.
The large size of China means there are major regional variations in living standards that can vary from extreme poverty to relative prosperity. In much of rural China, peasants live off the land, while in major cities like Shanghai and Beijing a modern service-based economy is forming.
Since the PRC was founded in 1949, China has experienced a surprising and turbulent economic development process. It has experienced revolution, socialism, Maoism, and finally the gradual economic reform and fast economic growth that has characterised the post-Maoist period. The period of the Great Leap Forward famine and the chaos of the Cultural Revolution negatively impacted the economy. However, since the period of economic reform began in 1978, China has seen major improvements in average living standards and has experienced relative social stability. In that period, China has evolved from an isolated socialist state into a backbone of the world economy.
The high growth rates of the reform period were caused by the massive mobilization of resources, and the shift of control of those resources from public to private ownership which allowed for improved efficiency in the management those resources. The benefits reaped from this era of massive resource mobilization are now coming to an end and China must rely more on efficiency improvements in the future to further grow its economy.
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