In the late 1970s, the Chinese leadership led by Deng Xiaoping, implemented economic reforms, transitioning the nation from Maoist Communism into a "socialist market economy". By the late 1980s, grievances over inflation, limited career prospects for students, and corruption of the party elite were growing rapidly. Internationally, Communist governments were losing their grip on power in Eastern Europe. In April 1989, spurred by the death of deposed Communist Party General Secretary Hu Yaobang, mass gatherings and protests took place in and around Tiananmen Square. The largely student-run demonstrations aimed for continued economic reform and liberalization, and eventually evolved into a mass movement for political reform and freedom of the press. Peaceful protests also occurred in other cities, such as Shanghai and Wuhan, while looting and rioting broke out in Xi'an and Changsha.

The aftermath of the protests strengthened the power of socialist hardliners within the party opposed to Deng, and delayed further Chinese market reforms until Deng Xiaoping's 1992 southern tour.