surplus that has emerged in China has exacerbated the inequalities, and makes them harder to address. The trade surplus stimulates the urban manufacturing sector, which is already relatively well off. It limits the government's scope to increase funding for public services such as rural health and education. The government has been trying to rebalance China's production away from investment and exports towards domestic consumption and services, to improve the country's long-term macroeconomic health and the situation of the relatively poor in China. Recent government measures to reduce disparities include relaxation of the hukou system, abolition of the agricultural tax, and increased central transfers to fund health and education in rural areas. Poverty reduction China has maintained a high growth rate for more than 30 years since the beginning of economic reform in 1978, this sustained growth has generated a huge increase in average living standards. 25 years ago, China had many characteristics in common with the rest of developing Asia: large population, low per capita income, and resource scarcity on a per capita basis. But in the 15 years from 1990 to 2005, China averaged per capita growth of 8.7% The whole reform program is often referred to in brief as the "open door policy". This highlights that a key component of Chinese reform has been trade liberalization and opening up to foreign direct investment, but not opening the capital account more generally to portfolio flows. China improved its human capital, opened up to foreign trade and investment, and created a better investment climate for the private sector. After joining the WTO China's average tariffs have dropped below 100%, and to around 5% for manufactured imports. It initially welcomed foreign investment into "special economic zones". Some of these zones were very large, amounting to urban areas of 20 million people or more. The positive impact of foreign investment in these locations led to a more general opening up of the economy to foreign investment, with the result that China became the largest recipient of direct investment flows in the 1990s. The opening up measures have been accompanied by improvements in the investment climate. Particularly in the coastal areas, cities have developed their investment climates. In these cities, the private sector accounts for 90% or more of manufacturing assets and production. In 2005, the average pretax rate of return for domestic private firms was the same as that for foreign-invested firms.