ABSTRACT
This chapter attempts to specify some of the reasons why China's current course is apt to bring some highly favorable results over the intermediate term while generating a number of serious longer term problems. It suggests not that the course be shifted, but that greater sophistication concerning the limitations of the market and of the capitalist system would make it possible to pursue a transition to socialism while maintaining the broadly anti-statist thrust of the current reform. The direction of economic reform in China is broadly consistent with the views of the radical Chinese critics of the system that evolved under Mao Zedong. According to a preliminary estimate by the State Statistical Bureau, China's foreign trade in 1988 increased by an additional 21 percent to more than US $100 billion, with export volume rising by $7 billion. A central part of China's modernization drive is the linking of the Chinese economy to the capitalist world economy.
