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One of the predecessors of the IWEP is the Section of World Economy of the Institute of Economy in the Chinese Academy of Science. According to the instructions of Chairman Mao Zedong in 1963, the Institute of World Economy of the Chinese Academy of Science was formally established on May 19, 1964.  In 1977 the Chinese Academy of Social Sciences was formally established. It was based on the former Division of Philosophy and Social Sciences of the Chinese Academy of Sciences.  IWEP became one of its subordinate institutes.  In December 1980, part of the Institute of World Politics and the Institute of World Economy were combined to establish the Institute of World Economics and Politics.

The major tasks of the Institute of World Economy at its establishment were to provide each department of the central government with reports and reference materials about the world economy and to serve economic construction in China. Since early on researchers in IWEP have been providing important reference for economic reform, opening up to the outside world the economic development paths in China through the review and introduction of foreign economic systems, economic reforms, economic policies, development strategies and economic practices.

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