In 1978, at the Third Plenum of the Eleventh National Party Congress Central Committee, Deng Xiaoping launched China on the path of Reform and Opening-up, which aimed to de-collectivize the countryside and decentralize government controls in the industrial sector. He also introduced the goal of "Four Modernizations" and the concept of "xiaokang" or "moderately prosperous society." Deng placed a strong emphasis on light industry as a stepping stone to the development of heavy industries and was heavily influenced by the economic success of Singapore under Lee Kuan Yew.

Deng also established Special Economic Zones (SEZ) in areas such as Shenzhen, Zhuhai, and Xiamen to attract foreign investment without strict government regulations and to run on a capitalist system. The Shekou Industrial Zone in Shenzhen was the first area to open up and had a significant impact on the development of other parts of China. He also recognized the importance of science and technology in the "Four Modernizations" and approved several projects such as the Beijing Electron-Positron Collider and the Great Wall Station, the first Chinese research station in Antarctica.

In 1986, Deng launched the "863 Program" and established the nine-year compulsory education system. He also approved the construction of the first two nuclear power plants in China, the Qinshan Nuclear Power Plant in Zhejiang and the Daya Bay Nuclear Power Plant in Shenzhen. Additionally, he approved the appointment of foreign nationals to work in China, including the renowned Chinese-American mathematician Shiing-Shen Chern. Overall, Deng's policies and leadership played a significant role in modernizing and transforming China's economy and society.