Janos Kornai, the dean of socialist economics, wrote these remarks before the collapse of communism in Eastern Europe (1990: 14). His focal concern was the intermittent, largely unsuccessful attempts to incorporate market mechanisms into centrally planned economies in the Soviet Bloc during the preceding two decades. Indeed, the setbacks to such attempts were so severe and widespread that there was a growing consensus that in a partially reformed command economy market forces were unlikely to outgrow and redefine the institutional parameters set by the communist state, much less become the primary driver of sustained economic growth.

China's reform experience since 1978, however, tells a different story. The central planning system, along with strict state ownership, has steadily declined. Markets have grown to become the center of economic activities.