Since 1978 China has maintained rapid economic growth for thirty-three consecutive years. The average annual GDP growth is 9.9% and the average annual growth of foreign trade 16.3%. Between 2003 and 2010 annual GDP growth exceeded 10%, and foreign trade 21.5%. Even during the current global crisis, the most serious since the Great Depression, China's growth rate reached 9.6% in 2008, 9.1% in 2009, and 10.1% in 2010. But with the deepening reform and opening, various socioeconomic issues keep surfacing in the transition, and new tensions have emerged.

In the late 1980s and early 1990s the SOE reform was the topic of the day. Back then the SOEs were described as “one-third making apparent loss, one-third making hidden loss, and another third making profit.” After the reform roughly along the lines discussed in Chapter 9, profitability is no longer an issue. Many small SOEs have been privatized, and many large ones make handsome profits, especially those in the monopoly sectors. The new focus for the SOE reform is improving their competitiveness. The fragile banking system witnessed by non-performing loans in the four major state-owned banks has also been improving substantially after recapitalization and listing in the stock exchanges in Hong Kong, China, and Shanghai: the non-performing loan ratio has been reduced from 40% to less than 5%.