China’s 40 Years of Economic Reforms and Growth

China’s growth from 1978 to 2018 shifted China’s population from extreme poverty to the engine driving the world’s second-largest economy and largest exporter. Could economic theories help explain China’s phenomenal growth, given its complex cultural, political, and social transformations? Which factors were most decisive? Any business executive making decisions about global trade and investments in China had to assess whether China would maintain its growth trajectory and economic practices in the future. This case offers a review of China’s institutional changes and explores the mechanisms of growth during the four decades of transformation from 1978 to 2018. It also presents challenges to China’s future growth in the aftermath of the COVID-19 pandemic and the US–China trade war. At the University of Virginia Darden School of Business, it is taught in the first-year “Global Economies and Markets” class and the second-year “China in the World Economy” class; it would also be suitable in a module covering emerging markets for executive training.