How are women faring in the transformation from planned economies to market economies that began in the 1980s? Specifically, is the gender wage gap increas ing or decreasing? A picture is now emerging, and it shows great diversity in find ings from various countries. While available signs point to an increasing gender wage gap in Russia and Ukraine, it appears to be falling in Central and Eastern European countries moving toward a market economy (Brainerd, 1996a, b). This chapter attempts to add another example, as we focus on the size and development of the gender earnings gap in urban China from the second part of the 1980s to the middle of the 1990s. Although we study only the urban population of China, this alone is a labor force larger than that found in any other single country moving away from central planning.