How has China's economic system been shaped since Deng Xiaoping instituted the Four Modernizations program in 1978, and how does this system affect current domestic and international business?

This question will be answered with economic statistics analyzed in a historical context. China is seen as the largest untapped market in the world for two reasons: size and inaccessibility. Historically, China has had a relatively isolationist economic policy. In 1978, a fundamental shift occurred when Deng Xiaoping launched the four modernizations. This program economically revolutionized four areas: agriculture, industry, science and technology, and defense. Since this time, the economic policy of China has gradually turned outward.

Currently, China is quickly developing its resources to increase its industrial might, but it lacks an infrastructure to adequately finance this growth. The Chinese government in Beijing is performing a precarious tightrope act between a centralized bureaucracy and a free-market economy. China is allowing non-Chinese joint ventures with many restrictions. In order to truly judge ChinaÍs unique economy, one must participate.

The research for this paper will be done in two distinct segments. The historical research can be done in libraries stateside. The pertinent economic data will be gathered from various economic journals, and the shift in economic policy can be documented from various books, journals, newspapers, and magazines. This information will provide the historical framework of Chinese economic policy, and it will be used to construct ChinaÍs current economic model.

In China, extensive interviews will be used to piece together various pieces of the economic puzzle. Chinese professionals, non-Chinese business people, and Chinese students will be interviewed. Questions will be pointed to career decisions. All of these people will also be asked to predict the long-run security of the Chinese economy. I expect to find that almost all of the Chinese will be very optimistic about long-run security. While Western businesspeople will be frustrated by the demands of operating in China.

Another avenue to gain insight on the Chinese economy is to look at the goods on Chinese store shelves. By learning the major Chinese brand names and examining shelves in various regions (Shanghai, Xian, and Beijing), it will be possible to gauge how the system truly works. I expect to see many products manufactured by state-run monopolies on all the shelves throughout China. On the other hand, I do expect to see Western goods, especially in more urban areas. The combination of these techniques will show the development and current state of the Chinese economy on the micro and macro levels.