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Foreign trade accounted for only 7 per cent of China’s GNP in

1978 but by the early 1990s it had soared to 40 per cent and it has

stayed at that level ever since. China’s share of world trade quad-

rupled during the same period. By 2002, over 40 per cent of

China’s GDP was accounted for by foreign direct investment (and

manufacturing accounted for half ). By then China had become the

largest recipient of foreign direct investment in the developing

world, and multinationals were exploiting the China market pro

fit-

early 1990s, re-entered the market at the end of the decade and by

2003 was reporting far higher pro

fits on its Chinese venture than

on its domestic US operations.

28

It seemed as if an export-led development strategy had suc-

Deng had signalled a departure from Mao’s policies of internal

self-reliance, but the 

first openings towards the outside were ten-

tative and con

fined to special economic zones in Guangdong. It

was not until 1987 that the party, noting the success of the

Guangdong experiment, accepted that growth should be export-

led. And it was only after Deng’s ‘southern tour’ in 1992 that the

full force of the central government was put behind the opening

to foreign trade and foreign direct investment.

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 In 1994, for

fficial and market)

was abolished by a 50 per cent devaluation of the o

fficial rate.

While the devaluation sparked something of an internal in

flation-

capital in

flows that have now positioned China as the world’s

most dynamic and successful economy. What this betokens for the

future of neoliberalization, given the latter’s penchant for change