ABSTRACT
One of the phenomena that confront economists interested in East Asia in general, and China in particular, is the episodes of very rapid growth that have occurred and are occurring here.1 From an empirical and theoretical standpoint, this phenomenon cries out to be understood, especially as it contrasts so sharply with the experience in other parts of the world. From a welfare perspective, as well, the issue looms very large indeed. When one begins to grasp the potential size of the Chinese economy if it were more fully developed and the numbers of people that would be affected, it is difficult to think of other areas of economics where a clearer understanding yields greater potential benefits.
