More than a decade has elapsed since the beginning of Deng's open-door policy. By the standard of Stalinist economies, China has taken giant strides in institutional reforms in order to open its door: the power of foreign trade and investment has been significantly decentralized, the renminbi has been devalued substantially, a grey market for foreign exchange has been introduced, foreign joint ventures and fully owned foreign enterprises have been allowed, special economic zones have been established, and the formula of ‘one country, two systems’ has been promulgated for Hong Kong and Macau. The last two innovations are unheard-of in communist countries.

However, so far, the results of the open-door policy are mixed. Export expansion has been rapid but uneven, and the 1979–80, 1984–85 and 1988 reform drives have resulted in severe internal and external imbalances. On each of the three occasions, economic planners were forced to recentralize and adopt restrictive macro-policies. China succeeded in lessening its dependence on oil exports, but its dependence on textile exports is high and increasing. China relies increasingly on Hong Kong for marketing, re-exporting and transshipment. Service exports have boomed, especially tourism, but most foreign tourists are Hong Kong residents. Reform of the trading system has not met initial expectations, and the radical 1984 trade reforms have been only partly implemented. The existing system of trade controls is not effective and leads to many inefficiencies.