Chapter 5: 1990–2000: Accomplishing the Harder Reforms

Despite immediate difficulties left over from inflation and turmoil in the 1980s, China’s economy in the 1990s squarely addressed its most difficult challenges since the breakup of communes and return to family farming. During the 1990s decade, China accomplished key agricultural price reforms, restructured state enterprise management and employment, recapitalized its banks, revamped its tax system, instituted financial securities markets, began selling off state-owned housing to urban residents, and met global standards for international trade and finance with current-account convertibility and a successfully negotiated entrance into the World Trade Organization (the WTO). The macroeconomic cycle of slowdown, boom, and then slowdown created conditions that reduced popular opposition to reforms, especially from the subsidized urban workforce…