Historical Development of Chinese SMEs

History Of Enterprise Development In China

This section introduces the contemporary history of Chinese SMEs’ development to understand how the modern Chinese enterprises formed and developed. The discussion follows the important historical cornerstone of the launch of China’s Open Door Policy in 1978 led by the great economic reformer Deng Xiaoping, when China opened up to foreign investment and encouraged the development of regional small enterprise. This has transformed the Chinese economic system from a central-planned economy to a market-based economy and brought great changes to Chinese SMEs’ developmental system (Ahlstrom & Ding, 2014). Since the introduction of the policy, China has transformed from a poor country to the world’s second largest economy (behind the USA). Two sub-sections follow: the situation pre-1978 and the situation since the introduction of the Open Door Policy.