After Mao Zedong's death in September 1976, the Chinese Communist Party officially urged the continuation of Mao's revolutionary line and policies in foreign affairs. At the time of his death, China was in a political and economic quagmire due to the Great Proletarian Cultural Revolution and subsequent factional fighting. Hua Guofeng, Mao's designated successor, assumed the post of party chairman and arrested the Gang of Four, prompting nationwide celebrations. Hua Guofeng tried to fill his mentor's shoes by, among other things, sporting an identical haircut and proclaiming the "Two Whatevers", meaning that "Whatever Chairman Mao said, we will say, and whatever Chairman Mao did, we will do." Hua relied on Maoist orthodoxy, but his unimaginative policies received relatively little support, and he was regarded as an unremarkable leader. Deng Xiaoping was restored in his former posts in July 1977, and the 11th Party Congress was held in August, which again rehabilitated Deng and confirmed his election as the new Committee Vice-chairman and the Central Military Commission's vice-chairman. Deng Xiaoping made his first trip abroad in May 1978, visiting the Democratic People's Republic of Korea. China mended fences with President of Yugoslavia Josip Tito, who visited Beijing in May 1977, and in October 1978, Deng Xiaoping visited Japan and concluded a peace treaty with that country's prime minister Takeo Fukuda, officially ending the state of war that had existed between the two countries since the 1930s. Relations with Vietnam suddenly turned hostile in 1979, and in January 1979, a full-scale Chinese attack was launched on the Vietnamese border. China finally fully established diplomatic relations with the United States on January 1, 1979. The establishment of diplomatic ties with the United States brought about a mixed reaction from the communist world.

The shift in power to Deng Xiaoping and his supporters was a watershed moment in Chinese history, as it marked the end of the era of Mao Zedong Thought, and the beginning of the era of reform and openness. Deng's ideas of economic modernization and a more pragmatic approach to governance came to the forefront, and his supporters attempted to bring about a more equitable society through institutional reforms. The new leadership's focus on economic development, as opposed to class struggle and revolutionary zeal, was a major shift in Chinese policy, and it was accompanied by a number of reforms in the political, economic, and social spheres. As the old guard of the Cultural Revolution was replaced by a younger generation of leaders, the CCP made a pledge to never repeat the mistakes of the past, and to pursue gradual reform rather than drastic change.