ABSTRACT. Soon after Deng Xiaoping became China's premier in 1978, a program of reform and openness was initiated. Its goals were to introduce free-market mechanisms into the command economy, to eliminate Mao-era inefficiencies, and to bring China to parity with developed countries of the West and to a leadership role among Asia's newly industrialized countries. Drastic changes quickly transformed China's planned economy into one of mixed-market socialism. Although the economic achievements have been impressive and commendable at the national and provincial levels, questions have been raised as to the role of economic reform and openness in the growth and development of Chinese cities. To answer them, we examine Lijin Zhen, the seat of Lijin County, Shandong Province.