China's Transitional Economy: Interpreting its Significance

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Abstract
China's post-Mao economic reforms have generated rapid and sustained economic growth, unprecedented rises in real income and living standards, and have transformed what was once one of the world's most insular economies into a major trading nation. The contrast between China's transitional economy and those in Eastern Europe and the former Soviet Union could not be more striking. Where the latter struggle with severe recessions and pronounced declines in real income, China has looked more like a sprinting East Asian “tiger” than a plodding Soviet-style dinosaur mired in the swamps of transition. The realization that reform measures and energetic growth continue even after the political crisis of 1989 has made China a subject of intense interest far outside the customary confines of the China field. Understood increasingly as a genuine success story, it is moving to the centre of international policy debates about what is to be done to transform the stagnating economies of Eastern Europe, and various aspects of its case now figure prominently in academic analyses ranging from theories of the firm and property rights to the political foundations of economic growth.