[MUSIC] Hello and welcome to this module on China's Gradualist Reform. In this introduction, I want to provide some motivations for why we should be interested in studying China's economic transformation. And second, introduce you to the topics that we'll be covering in this module. If we look at the growth in China's Gross Domestic Product, since the establishment of the Socialist Republic in 1949, you can see that there has been a dramatic change. In particular, since the period of economic reform began in 1978, there has been exponential growth in China's economic output. This really shows the power of compounded high rates of annual economic growth. By the end of this period, China's output is a thousand times greater than in 1952. The question, of course, is how did China accomplish such a remarkable economic transformation? That's what we're going to try to address in this course and in this module. China has also become increasingly important to the global economy. You can see here that compared in the 1980s, when China's growth was relatively unimportant to global economic output and the leading countries were the USA and Japan. By the 2000s, China has become the most important country in contributing to total economic growth in the world. And much faster than even the United States and other emerging market countries. So if we return to the question, why should we bother studying Chinese economic reforms? We can think of several different perspectives. The first, of course, is China's global importance. In the future, no matter where you live in the world, what happens in China will matter because it will affect what's happening in all of the other countries in the world. Second, if we're trying to understand the general process of economic development, how do poor countries become rich countries? China's historic accomplishment becomes an incredibly important case study for studying this general process. And finally, if we want to understand the current challenges facing the Chinese economy and the likely paths or outcomes that are going to occur in the future. We really need to understand what has happened in the past, what has happened during the past 30 years of economic reform. In this module, we will cover five main topics. The first is institutional change as a framework for thinking about economic reform. So we will use these concepts to try to understand analytically why reform has unfolded in the way it has and what it has meant for economic performance. We will then provide a overview of China's graduous reform experience, contrasting it with the big bang, big shock therapies applied in Russia and Eastern Europe. Then we will turn to reforms and specific sectors of the economy. And in this module, we will look both at agriculture and the industry. On the agricultural side, we will examine the decollectivization reforms that returned farming to households at the beginning of the reform period. On the industrial side, we will analyze the rise and fall of China's township and village enterprises. And also discuss the continuing problem of state-owned enterprise reform in China. And as we examine each of these topics, we will continue to use this framework of institutional change as a lens for understanding what is happening in China's economic reforms.