Abstract: This chapter explores the rapid economic and technological developments in China since the late 1970s from an evolutionary economic perspective. It deals with crucial aspects of evolutionary economic theory. The chapter reviews China’s reform policies and aspects of economic history, starting with the opening of China to the world economy. Evolutionary thinking is very suitable to explain economic development as a dynamic process where the economy is constantly changing. At its core lies innovation in the sense of new products or production processes, which keep an economy in motion. The evolutionary literature emphasizes that innovation is a process, not just a single event at a certain point in time or “manna from heaven.” In this sense, innovation includes a learning process that involves the supply side and the market or demand side alike. The innovation system approach – conceptionally closely related to evolutionary principles – has traditionally been applied to innovation analyses related to established market economies.