China's reforms straddled the global transition from the Cold War. China's future had hung in the balance in the late 1970s after the excesses of the Great Leap Forward and the Cultural Revolution. Following the death of Mao Zedong in 1976, Deng Xiaoping rose to power, determined to reform a failing system. Deng was opposed by those who believed that he would place the whole socialist project in jeopardy. The contest between the two sides came to the fore clearly at the Fifth National People's Congress in early 1978, when the Hua Guofeng faction (which would come to be branded as leftist) and Deng's moderates clashed. Within the year, there were signs that Deng had won. At the Third Plenum of the 11th Congress of the Chinese Communist Party in December, the party line calling for protracted class struggle was repudiated in favour of the Four Modernizations of agriculture, industry, research and development, and the military. The Four Modernizations, which reoriented China towards the market, marked four successive phases of reform: agricultural and industrial devolution from 1979 to 1983; the second phase of reform from 1983 to 1987 that abolished communes and saw greater emphasis being placed on the establishment of special economic zones; the third phase from 1987 to 1993, during which the private sector was legalized as a complement to the public sector; and the fourth phase from 1993, when the socialist market economy was codified in the Constitution. It was clear that the Dengists were charting China's future anew.

However, Satya J. Gabriel argues that even when Marxian ideas ceased to determine public policies in post-Mao China, there remained among the Chinese leadership “a latent Marxian ontology of economic life as a continuous series of tensions and struggles…”. History had shaped the jagged contours of that ontology. Both the leaders of China and its masses could draw on a common pool of memory of how their country had been forced to open its markets to Western traders in the 19th century through a series of “unequal treaties“, notably the Treaty of Nanjing in 1842 that had ceded Hong Kong to Britain.