The Third Plenary Session of the 11th Central Committee of the CPC, held in late 1978, saw introduction of Chinese reform and opening-up policies. The process of new policies was from rural reform to urban reform, from reform of economic structure to structures in all aspects, and from internal vitalization to external opening-up. Deng Xiaoping was the major leader and chief architect of Chinese reform and opening-up policies.

Deng Xiaoping initiated the theory of "building socialism with Chinese characteristics", i.e. carrying out construction to realize modernization with economic construction as central task, implementing household contract responsibility system with remuneration linked to output in rural areas, practicing various economic systems of responsibility to prevent people from "eating from same big pot" in urban areas, and establishing a socialist market economy based on public ownership of means of production. At the same time, political systems were also reformed, such as separating functions of the Party and the Government, transferring power to lower levels, simplifying administrative structure and developing a democratic style of work.

Deng Xiaoping advocated combining reform and opening-up, and set up special economic zones (SEZs). In July 1979, the State Council decided to set up the first group of SEZs in Guangdong and Fujian provinces on a trial basis. In 1980s, four SEZs of Shenzhen, Zhuhai. Shantou and Xiamen were formally set up. Over a dozen coastal cities were opened, and open economic regions were established in Yangtze River Delta, Pearl River Delta, southeast Fujian area and the area around the Bohai Sea. Hainan Island was made a full-fledged povince and an SEZs. In January 1984, Deng Xiaoping and other leaders went on an inspeciton tour of Shenzhen and Zhuhai SEZs. In 1992, Deng inspected Wuchang, Shenzhen, Zhuhai and Shanghai, and issued instructions, emphasizing boldness in reform and opening-up tasks, telling people to grasp opportunities, taking economic development as key to progress.

Deng emphasized that "science and technology are the first productive forces", and urged more respect for knowledge and talented people. He also noted the need to develop education and strengthen construction of socialist spiritual civilization.

As for Hong Kong and Macao issue, Deng initiated the principle of "one country, two systems" to realize the reunification of the country. This principle underlay the successful reunion of Hong Kong and Macao with motherland.

After more than 20 years of reform and opening-up, China has made enormous achievements in economic, political, cultural and social construction. As as result, Chinese comprehensive national power and people's living standards have increased greatly.