From Deng Xiaoping's reforms to Xi Jinping's accession, the CCP kept its monopoly on power while decentralising economic management, piloting reforms locally (Shenzhen), evaluating cadres on growth and adopting collective leadership and term limits. Growth averaged over 9% a year and extreme poverty fell by nearly 800 million; the 1989 Tiananmen killings set the limits of political reform.
After Mao's death and the arrest of the Gang of Four in 1976, Deng Xiaoping and his allies outmanoeuvred Mao's chosen successor, Hua Guofeng. The Third Plenum of the 11th Central Committee in December 1978 made economic modernisation the party's central task. Ezra Vogel's biography of Deng describes the leadership's goal as rescuing the party's legitimacy by delivering prosperity while preventing another Mao. The 1981 Resolution on party history repudiated the Cultural Revolution but kept Mao as a founding symbol.
Sebastian Heilmann describes reform policy as "experimentation under hierarchy". Local governments tried new practices in designated "experimental points" and zones; the centre watched, selected and generalised the successful ones, and kept the power to stop them. Decollectivisation spread from local initiatives into the national household responsibility system around 1980–83. In August 1980 four Special Economic Zones were created, including Shenzhen (see the Shenzhen Special Economic Zone entry), where foreign investment, land leasing and labour contracts were tried before being extended. Deng's "southern tour" of early 1992 revived market reform after the post-1989 freeze. The method made reform reversible and politically safer, but it also produced uneven regional development and local protectionism.
Dual-track pricing, township and village enterprises, foreign direct investment, the restructuring of state-owned enterprises in the late 1990s and accession to the World Trade Organization in December 2001 made China a manufacturing centre for the world. The World Bank reports that GDP growth has averaged over 9 percent a year since 1978. Growth brought sharp inequality between coast and interior and between city and countryside, severe air and water pollution, and widespread corruption linked to land and licences.
Whether promotion rewarded performance is contested. Hongbin Li and Li-An Zhou found that between 1979 and 1995 provincial leaders were more likely to be promoted, and less likely to be dismissed, when their provinces grew faster. Victor Shih, Christopher Adolph and Mingxing Liu found no evidence that growth was rewarded with higher Central Committee rank, and instead found that factional ties, education and provincial revenue collection mattered. Both may hold at different levels of the hierarchy. Feedback from below remained weak: the press was licensed and censored, and petitioners who took grievances to Beijing were often detained in "black jails".
The reform era was not liberal. In spring 1989 students and workers occupied Tiananmen Square and protested in many cities. The leadership declared martial law on 20 May and on the night of 3–4 June the army cleared Beijing with live fire. An official report at the end of June 1989 counted over 200 dead, including 36 college students, and several dozen soldiers; Amnesty International estimates that hundreds, possibly thousands, were killed. Party chief Zhao Ziyang, who opposed martial law, was removed and held under house arrest until his death in 2005. The one-child policy was enforced with fines, forced abortions and sterilisations. Falun Gong was banned in 1999 and its followers persecuted; protests in Tibet (2008) and Xinjiang (2009) were met with mass arrests; the writer Liu Xiaobo was sentenced to eleven years in 2009 and awarded the Nobel Peace Prize in prison in 2010.
Under continued one-party rule, China decentralised economic management, piloted reforms in zones such as Shenzhen, opened to trade and joined the WTO in 2001. GDP growth averaged over 9% a year from 1978, and the number of people below US$1.90 a day fell by close to 800 million over four decades. The party adopted collective leadership, term limits and two peaceful successions. It crushed the 1989 protest movement with lethal force and enforced the one-child policy coercively.
The configuration ended not by collapse but by deliberate revision after Xi Jinping became general secretary in November 2012. Collective leadership had been accompanied by factional networks, pervasive corruption and growing local autonomy that the new leadership saw as threats to party control. The informal and constitutional rules on term limits, never independently enforced, were dismantled after 2012.
Over four decades of reform the number of people in China living below the US$1.90-a-day international poverty line fell by close to 800 million, almost three-quarters of the global reduction in extreme poverty.[1][2]
Provincial leaders in reform-era China were more likely to be promoted, and less likely to be dismissed, when their provinces' economies grew faster.[1][2]
China's reform policy relied on 'experimentation under hierarchy': local pilots and zones tested new policies that the centre selected, generalised or stopped.[1][2]
China's rapid growth after 1978 was caused by its one-party authoritarian system.[1][2][3]