The Emergence of Relative Affluence in Developing Markets

China is not alone in its development but it does provide the most striking example of the effects of long term economic development. Over the past three decades, China has undergone a complete economic revolution, forever transforming the fate of the country and the course of the world’s future.

In 1978, Communist Party leader Deng Xiaoping unleashed economic reforms that liberated China from state ownership and opened the nation to a market-oriented economy, bringing a surge in foreign trade and a heightened interest from foreign investors. What followed is perhaps the single greatest welfare improvement in all of human history. More people experienced more economic growth in a shorter period of time than has ever occurred before.

Efficiencies resulting from China’s economic reforms have led to a more than 10-fold increase in the country’s GDP from 1978 to today. In fact, the nation’s GDP growth rate in the 21st century has averaged approximately 10% per year.