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This study, first published in 1992, explores the relationship between China's foreign trade reforms and the domestic economic reforms that underlie China's policy of openness. It provided the first comprehensive analysis of how China emerged, since reform began in 1978, as one of the most dynamic trading nations in the world. It examines both the external policy changes, such as the decentralisation of trading authority and the devaluation of the domestic currency, and internal economic reforms such as the increased use of markets and prices. The volume concludes with an analysis of the sources of China's export growth and outlines further domestic economic reforms that the author believes will be required to sustain China's integration into the world economy.