People's Republic of China

Following his death and the end of the Cultural Revolution, Deng Xiaoping and the new Chinese leadership began to reform the economy and move to a market-oriented mixed economy under one-party rule. China's economy is mainly characterized as a market economy based on private property ownership.Collectivization of the agriculture was dismantled and farmlands were privatized to increase productivity.

A wide variety of small-scale enterprises were encouraged while the government relaxed price controls and promoted foreign investment. Foreign trade was focused upon as a major vehicle of growth, which led to the creation of Special Economic Zones (SEZs) first in Shenzhen (near Hong Kong) and then in other Chinese cities. Inefficient state-owned enterprises (SOEs) were restructured by introducing western-style management system and the unprofitable ones were closed, resulting in massive job losses.

Since economic liberalization began in 1978, the PRC's investment- and export-led economy has grown 70 times bigger and is the fastest growing major economy in the world. It now has the world's third largest nominal GDP at 30 trillion yuan (US$4.4 trillion), although its per capita income of US$3,300 is still low and puts the PRC behind roughly a hundred countries.

The primary, secondary, and tertiary industries contributed 11.3%, 48.6%, and 40.1% respectively to the total economy. If PPP is taken into account, the PRC's economy is second only to the US at US$7.9 trillion corresponding to US$5,900 per capita.

The PRC is the fourth most visited country in the world with 49.6 million inbound international visitors in 2006. It is a member of the WTO and is the world's third largest trading power behind the US and Germany with a total international trade of US$2.56 trillion - US$1.43 trillion in exports (#2) and US$1.13 trillion in imports (#3). Its foreign exchange reserves have reached US$2.1 trillion, making it by far the world's largest.

It is among the world's favorite destination for FDI, attracting more than US$80 billion in 2007 alone. The PRC's success has been primarily due to manufacturing as a low-cost producer. This is attributed to a combination of cheap labor, good infrastructure, medium level of technology and skill, relatively high productivity, favorable government policy, and some say, an undervalued exchange rate.

The latter has been blamed for the PRC's bulging trade surplus (US$262.7 billion in 2007) and has become a major source of dispute between the PRC and its major trading partners – the US, EU, and Japan – despite the yuan having been de-pegged and risen in value by 20% against the US dollar since 2005.The PRC, holding US$801.5 billion in Treasury bonds, is the largest foreign financier of the U.S. public debt.