ECONOMY

The socialist economic system set up in 1949 has changed consierably over the years, most dramatically since Deng Xiaoping's reforms in the late 1970s.

The key to recent reforms has been the opening of china to foreign trade and, most crucially, foreign investment. At the beginning of the reforms, special Economic Zones were set up in coastal towns that were located strategically close to Hong Kong, Macao and Taiwan .Here overseas business people were offered tax concessions, simplified paperwork ,import allowances and other incentives to invest in join-venture companies.

They have been proved so successful that cities all over China now compete for foreign investment .At the same time a new generation of domestic entrepreneurs has learned the lessons of capitalism and now applies them for their personal advantage, encourage by Deng' dictum that 'to get rich is glorious'.

Though world economy is changing all the time, China¡¯s economy has kept to grow at a high rate. China managed to stand strong without devaluing its currency during the financial crisis that sent most of Asia into a tailspin in late 1997. In 2000 China has gain the membership in the world Trade Organization (WTO), which will render China¡¯s economy great advantages as well as challenges. As many economists predicts, in the near future, China will become the leader in the world economy stage.