Abstract This paper applies a systems-oriented, “holistic” approach to China’s radical economic
reforms during the last quarter of a century. It characterizes China’s economic reforms
in terms of a multidimensional classification of economic systems. When looking at the
economic consequences of China’s change of economic system, I deal with both the
impressive growth performance and its economic costs. I also study the consequences
of the economic reforms for the previous social arrangements in the country, which
were tied to individual work units: agriculture communes, collective firms and state-
owned enterprises. I continue with the social development during the reform period,
reflecting a complex mix of social advances, mainly in terms of poverty reduction, and
regress for large population groups in terms of income security and human services,
such as education and, in particular, health care. Next, I discuss Chinas future policy
options in the social field, whereby I draw heavily on relevant experiences in developed
countries over the years. The future options are classified into three broad categories:
policies influencing the level and distribution of factor income, income transfers
including social insurance, and the provision of human services.
