ABSTRACT
The Chinese economy is currently undergoing an institutional transformation as profound as the replacement of the people’s communes with the household responsibility system in the early 1980s and the emergence of township and village enterprises as the main locus of economic dynamism in the second half of the 1980s. This third transformation is the emergence of the private sector as the main source of economic growth. Like the two preceding transformations of the reform era, it has proceeded quietly and swiftly, with change accelerating once the benefits of private ownership have been recognised by the authorities and given official blessing.
