Summary of a Narrative of “Reform without Losers”



Summary of a Narrative of “Reform without Losers”

Strong growth of China after 1978 is attributed to the gradual improvement of its economic and political institutions. In essence, growth accelerated when price, quota and work constraints were removed from farmers, and China opened up to the world, it put some discipline and stability of economic and political institutions in response to the Cultural Revolution and, introduced pro-market institutions. In fact, the narrative considers a particular period of “reform without losers” during the Zhao Ziyang (1978-1989; and, 1984-89). Intrinsically, this is always remembered in every anniversary of the Tiananmen Square movement because it was the turning point for China (Zhu, 2012) it consisted of the creation of balance between the economic reform and political reform as a result of a change in the Chinese Communist Party (CCP).

China started opening to the world and reforming its economy in the late 1970s through Deng Xiaoping. However, the CCP was suspicious about the speed at which that change is taking place probably in both the political and economic fronts. The Party has made significant progress in both the economic and political spheres, and it was trying to have a reasonable balance between the economic reform and political reform (Xu, 2011). Objectively, such balance is not natural to achieve because of challenges that exist due to the dynamics involved in both economic and political.

Towards 1989 especially from 1985 the CCP started facing a crisis about its legitimacy with a culmination in 1989 when there were Tiananmen Square protests. Indeed, these protests became a real challenge to the continuous rule of the CCP as well as its leaders who were compelled to opt on how they were going to deal with the situation (Zhu, 2012). Drawing from the past scenarios, leaders made the first conclusion that without political stability in China, it would be incapable to effectively champion for economic development (Guthrie, 2012). Inherently, this is the reason why the Chinese government has a strong belief in the stability theory for the recommendation for the leaders of the developing countries.

The party leadership guided by Zhao Ziyang decided to apply the possible resources for the sake of achieving a stable society and at the same time implementing economic reforms (Xu, 2011). From this decision, they quickly started to embrace free trade, market capitalism, and going global. It led to the opening of stock markets in Shenzhen and Shanghai which was coupled with the banking reforms (Guthrie, 2012). Intrinsically, this could be termed as the Party endorsing a “socialist market economy” in China and rejecting the old model which was primarily struggling to balance economic and political reforms (Zhu, 2012). It is the period known as “reform without losers” since the government applied ways which all the citizens were perceived to be equal and could benefit to all services. It involved the state in applying tight controls especially it when coming to the budget of the government towards maintaining social stability rather than concentrating on the defense budget (Guthrie, 2012). Eventually, it demonstrates that the democratization hopes were halted for some time for the sake of having a stable society.

The choice made due to Tiananmen Square protests was referred to as “1989 Choice” that entirely combined political repression and market economics to help in embracing globalization. The dramatic transformation of China over some time is fundamentally related to the 1989 Choice in which policies and decisions revolve from it (Xu, 2011). Period of “reform without losers” depicts a transformation with exciting stories regarding the Chinese growth path since the 1989 Choice made by the Party.


Guthrie, D. (2012). China and globalization: The social, economic and political transformation of Chinese society. Routledge.

Xu, C. (2011). The fundamental institutions of China’s reforms and development. Journal of economic literature49(4), 1076-1151.

Zhu, X. (2012). Understanding China’s growth: Past, present, and future. Journal of Economic Perspectives26(4), 103-24.

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