Introduction

China's economic reforms were driven by the desire of Chinese leaders to tackle poor public living conditions and to enhance the political legitimacy of the CCP. Although Chinese leaders reintroduced the market to China's socialist system, they lacked a blueprint to change its inefficient Soviet-style socialist economic system (Chow, 1999). As a result, China's economic reforms have been a process of gradual development rather than big changes. The Chinese government's approach, according to Deng Xiaoping, is ‘crossing the river by groping for stones’ (quoted in Qian and Wu, 2000, p 1). However, the impact of the slow economic reforms have almost completely destroyed China's socialist welfare system centred on the welfare activities of communes and state-owned enterprises. In order to compensate for this and to address unmet social needs, the Chinese government has attempted to construct a new welfare system that is compatible with its socialist market economy. Against this background, this chapter aims to present a wider picture of the development of China's social policy in the context of economic reforms.

The pre-reform economic system

Before the economic reforms, China practised communism, adopting a closed door policy. One of the most dramatic changes following the establishment of the PRC was the implementation of land reform in the early 1950s through which 117 million acres of arable land were redistributed to 300 million farmers. Large businesses were also nationalised (Zhiyuan et al, 2000). Thus, in the early years of the PRC, central government tried to build a more equal society through the nationalisation of private property.