Although Mao talked about rural industrialization, there was nothing substantial in its approach because China by the international community isolated.
Western countries had the technology and know-how for the modernization. But since China was isolated, there was hardly a chance to access what they need.
Deng saw this dilemma, thinking that the only way was to go to the progress of China in the world and be a part of the globalization process.
The improvement of relations with the outside world was the second of two important philosophical shifts in Deng's reform program - "gaige kaifang" (Reforms and Openness).
The domestic social, political and economic systems went through significant changes. Agriculture, industry, science and technology, and military - The goals of Deng's reforms were summed up by the "four modernizations".
had become a strategy for achieving these goals of a modern, industrial nation, to create a "socialist market economy".
A rational method China's economy from the development was at the 5th National People's Congress (NPC) session determined in June and July 1979th
Readjustment, reconstruction, consolidation and improvement - The policy was summed up in four key buzzwords. The aim was to adjust China's economy initially, by reconstructing the framework to strengthen economic growth and improve the living standards of the Chinese population.
This approach was confirmed by the August September 1980 session of the NPC, when surprisingly two significant new factors were introduced to stimulate production and to increase the foreign trade and "free market economy" and "decentralization".
Deng realized that the modernization, China had the world to open, so he created the "open door policy".
This manifests itself in a number of ways; For example, a wide range of raw materials from state planned production of regulation was transmitted by a market economy; Factories were for gains and losses; People were encouraged to set up collective enterprises; Workers were in the factories they worked in may invest.
The decentralization of economic decision encourages provinces to their own work well being so rural companies were called Township and Village Enterprises created and compete allowed.
In the late 1980s, they made for most of China's exports, but also small family farms have been encouraged and finally foreign and domestically owned private enterprises were allowed.
Deng attracted foreign companies through the creation of the exclusive economic zones where foreign investment and market liberalization were encouraged.
The government encouraged to engage local companies in joint ventures with foreign companies that brought in their much-needed technology, investment, management expertise and market access.
The changes in economic policy, in particular free enterprise and decentralization were the foundations of the new socialist market economy.
Deng used socialism to justify its introduction of a free market. Market socialism is a doctrine that can achieve socialism without a massive state apparatus. It postulates that while capital will be cooperative and, or in some cases should be left centrally on market forces and not planned by the state, decisions on the production and exchange.
Deng was careful in the way he socialism in terms of economic liberalization of capitalism.
He was not interested in getting rid of Marxism and socialism. He wanted to amalgamate Marxism and socialism with Chinese Schneider conditions with specific Chinese characteristics.
His idea was influenced by Confucian-Taoist philosophy to a certain extent. The famous Yin-Yang (black and white) circle shows the harmonious coexistence of opposing ideas. Fusing elements of capitalism with socialism, was Deng able to take a pragmatic approach to reform the economy.
Deng said socialism the first stage of communism. In the advanced stage, the principle of from each according to his ability and to each according to his needs would be applied. This required advanced productive forces and an overwhelming abundance of material wealth.
Consequently, the fundamental task of the socialist phase, to develop the productive forces was. The superiority of the socialist system was demonstrated by the faster and better development of these forces than under the capitalist system.
As it develops, believed Deng poverty would be reduced.
Decentralization was the icing on the cake; it was certain that the planned development instead of top-down bottom-up was to make acid.
The process of China's reform have brought about influential changes, no one to turn more prominent than the reform Deng took China from an isolated and stagnant nation to a rapidly growing economic power.
Deng reformed China, with a centrally planned economy merge a communist country by elements of the free market in the existing traditional economic system to justify his actions with the theory of market socialism and Confucian-Taoist philosophy.