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When the Chinese Communist Party (CCP) came to power in 1949, its major goal was to transform China into a modern and powerful socialist nation. In economic terms, these objectives meant at that time industrialization, improvement of living standards, narrowing of income differences, and the production of modern equipment. Subject to powerful and wilful individual leaders, idealistic revolutionary beliefs, and the inexperience of the new government, the way to national modernization never proved straight-forward. Instead, it has featured many sharp turns, with interruptions, self-contradictory impulses and discontinuities. Borrowing the words of the CCP government itself, policy making has been like ‘crossing the river by feeling each stone’.1 Policy instability can actually be found in almost every aspect of the development of Communist China. Economics is one of those areas that have gone though the most significant changes in policy making. White attributes these changes to different priorities in the Chinese leadership’s approach

The PRC Government’s Policies towards the Private Economy and Private Entrepreneurs. A Historical Review: 1949-2007