China is the world's third largest country and biggest developing country in terms of its geographical area of 9.6 million square kilometers and its population of about 1.3 billion. Its government administration is divided into three basic levels: provinces (autonomous regions, municipalities directly under the Central Government), counties (cities, banners, special districts, industrial-agricultural district, forest district), and townships (towns) administratively. There are 23 provinces, 5 autonomous regions, 4 municipalities, and 2 special administration regions directly under the Central Government.

In 1978, the Chinese government adopted the economic reform program to transform the Chinese economy from a socialist central planning system into a market economy. Since 1980, the Chinese government has established 5 Special Economic Zones to foreign investment. In 1984, it further opened 14 Coastal Cities to attract overseas investment. Since 1988, the Chinese government has been extended its opening to its border areas, areas along the Yangtze River and inland areas.

In June 1990, the Chinese government decided to open the Pudong New Zone in Shanghai to overseas investment, and opened more cities along the Yangtze River valley. With Shanghai's Pudong as the "dragon head", a chain of open cities has been extended up the Yangtze River valley. Between March and July of 1992, the State Council further opened a number of border cities and all the capital cities of inland provinces and autonomous regions. Additionally, 15 free trade zones, 32 state-level economic and technological development zones, and 53 new- and high-tech industrial development zones have been established in large and medium-sized cities. At the twenty-one century, the Chinese government has begun to implement the strategy for the wide-ranging development of Western China, including Shaanxi, Gansu, Qinghai, Sichuan, Yunnan and Guizhou provinces, the Ningxia Hui, Xinjiang Uygur and Tibet autonomous regions, and Chongqing Municipality.

The Chinese economy has been formed by a multi-level, multi-channel, omni-directional, and diversified pattern of opening, integrating coastal areas with riverine, border, and inland areas. The Chinese government adopts different preferential policies in different open areas. As a result, they play the dual roles of "Windows" in developing the foreign-oriented economy, generating foreign exchanges through exporting products and importing advanced technologies and of "radiators" in accelerating inland economic development.