Abstract

It is not a matter of great contention that China is the star performer amongst the transition economies. What is highly contentious, however, are the reasons that have been proposed to explain China’s stellar growth. Because China avoided the prolonged recession of eastern Europe and the former Soviet Union (EEFSU) in the beginning of their transitions, it was fashionable almost up to 2000 to attribute China’s success in economic transition to the particular set of reform policies that China implemented. The most enthusiastic contributors to this laudatory literature would even trumpet the inevitable appearance of a new set of economic practices that was based on neither Soviet-style socialism nor free-market capitalism, e.g. Nolan (1993) and Rawski (1995). The whiff of a forthcoming revolution in economic theory was certainly in the air as the bulk of the economic transition literature that related to China in the first-half of the 1990s expounded various lessons that EEFSU should learn from China’s seemingly unorthodox approach to economic transition.