ABSTRACT
The detailed analysis in Chapter 2 compared and contrasted the growth paths chosen by the two economies and the destinations they reached. It also examined how over the last two decades of the last century China established itself as the economy with the highest long-term GDP growth in real terms, in the fastest growing region of the global economy. This feat was achieved despite the Asian economic and financial crisis of 1997-8 and the SARS (Severe Acute Respiratory Syndrome) epidemic of the early 2000s, which had a shriveling effect on the GDP growth rate. While the economic and social costs of the Asian crisis to several newly industrialized Asian economies (NIAEs)1 and the ASEAN-42 economies were high, China remained unscathed. It is one of the few socialist economies that have made a successful transition from a command economy framework to a market-oriented one, in which most economic interactions are governed by market forces. This structural transformation is so far incomplete.
