This study traces the development of China's tax system from a closed, centrally planned communist economy to a largely market-oriented open economy. The study examines the political and economic forces that shaped the development of the tax system and identifies some of the issues and problems that were involved at various stages. For purposes of practical analysis and to recognize the boundaries where new factors began to affect the course of events, the development of China's tax system is divided into three broad periods: the closed-door period (1949-1978), the post-open-door period (1979-1990) and the Pacific Rim Era (1991-2006).