I began work on this book in the early 1980s as a graduate student at Yale University. At that time, some of the most basic facts about the Chinese economy and its characteristic institutions were unknown in the West. Inevitably, the early stages of my research were motivated by a simple curiosity to understand how this economy worked, and what were the prospects for its reform and opening to the outside world, then just beginning. I was extraordinarily lucky to have had the guidance of two superb teachers. Nicholas Lardy knew everything about the Chinese economy that was available in the West at that time, and he generously shared his knowledge of the Chinese economy and of the use of Chinese sources. John Michael Montias taught the European command economies, and provided a broad analytic approach to the socialist economy in which macroeconomics and development strategy mattered as well as the incentives, information, and institutions that structured individual behavior. James Tobin provided inspiration from the example of his work and from direct personal encouragement. Later, with the assistance of a Fulbright-Hays Fellowship, and the hospitality of Wuhan University, I spent the year 1982 in China. This allowed me to immerse myself in the Chinese sources at the University Library, and to conduct my first interviews at Chinese factories.