This article discusses how two decades of economic reforms have intensified popular unrest and redefined the composition, interests and political attitudes of China's ever more complex social strata. It then analyses some of the fundamental domestic and international issues facing Beijing in the course of those reforms and the social problems that have accompanied economic growth. The Communist Party has responded to the challenges generated by these problems and been forced to undertake more active political reforms or face an even greater loss of its authority. The article explains how the Party under the slogan the “three represents” cast its lot with the emerging beneficiaries of its economic reforms in the belief that only continued rapid development can mitigate the most pressing social problems and ensure stability.