# Reform and Opening Up The program [[Deng Xiaoping]] set in motion at the Third Plenum of December 1978 — two years after Mao's death and two months after Deng had consolidated control — that turned a collectivized, autarkic economy into the export engine at the center of every later U.S.–China dispute, without loosening the [[Chinese Communist Party]]'s political monopoly. The vault treats it as the origin of the "engagement consensus" and of the grievance that replaced it. ## The sequence It began in the countryside, and partly from below: farmers in Anhui secretly contracting land to households in 1978, then legalized as the household responsibility system that ended the communes and doubled grain output in six years. Four special economic zones followed in 1980 — Shenzhen, a fishing town across from Hong Kong, the emblem — where foreign capital could operate under different rules; a dual-track price system let a market economy grow beside the planned one; township and village enterprises absorbed the labor. The political limit was set at Tiananmen in June 1989, and the retrenchment that followed ended with Deng's 1992 Southern Tour, in which the retired leader toured the zones and told the party that "development is the hard truth" — the signal that reform would continue and the state would not. Jiang Zemin's decade privatized most state industry ("grasp the large, release the small"), and the 2001 accession to the [[World Trade Organization]] completed the opening: permanent access to Western markets, on the theory that trade would liberalize the polity. ## The bet and the bill The Western wager was Clinton's — "the more China liberalizes its economy, the more fully it will liberalize the potential of its people" — and it produced the outcome the economists later named the [[China Shock]]: some 2.4 million American jobs lost to import competition in the decade after 2001 by the Autor–Dorn–Hanson estimate, concentrated in the manufacturing counties that became the political geography of the last decade. [[Xi Jinping]]'s party did not liberalize; it used the wealth to build the surveillance state and the [[Belt and Road Initiative]]. The American right now reads the whole sequence as the original sin behind deindustrialization — the argument of [[Peter Navarro]], the [[Trump China Trade War]], the [[Liberation Day Tariffs]] and [[Decoupling]] — and the left largely agrees about the shock while disagreeing about the cure, which is why tariffs are the one area of bipartisan continuity from 2018 to 2026. The [[Chinese History Hub]] has the longer arc; [[Industrial Policy]] has what the United States did in response. ## See Also - [[Deng Xiaoping]] · [[Chinese Communist Party]] · [[Xi Jinping]] · [[Chinese History Hub]] · [[China]] - [[World Trade Organization]] · [[Peter Navarro]] · [[Trump China Trade War]] · [[Liberation Day Tariffs]] · [[Decoupling]] · [[Belt and Road Initiative]] · [[Industrial Policy]]