The tremendous success of China's economic reform, in contrast with the vast difficulties encountered by the former Soviet Union and Eastern European countries in their transition, has attracted worldwide attention. Using a historical, comparative and analytic approach grounded in mainstream economics, the authors develop a consistent and rational framework of state-owned enterprises and individual agents to analyze the internal logic of the traditional Chinese planning system. They also explain why the Chinese economy grew slowly before the market-oriented reform in 1979 but became one of the fastest growing economies afterwards, and why the vigor/chaos cycle became part of China's reform process. The book also addresses the questions: Can China continue its trend of reform and development and become the largest economy in the world in the early twenty-first century? What are the general implications of China's experience of development and reform for other developing and transition economies? In this revised edition, the authors update the data and information in the book and include a new chapter on the impact of China's WTO accession on its reform.

About the Author

Justin Yifu Lin is professor and founding director of the China Center for Economic Research (CCER) at Peking University and professor at the Hong Kong University of Science and Technology. His articles have appeared in various academic journals such as American Economic Review and Journal of Political Economy.

Fang Cai is research fellow and director of the Institute of Demography, the Chinese Academy of Social Sciences, Beijing.

Zhou Li is deputy director of the Institute of Rural Development, the Chinese Academy of Social Sciences, Beijing.

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