ABSTRACT
This chapter discusses the evolution of the economic development in China. The comparative performance of the Chinese and Russian economy is for the whole world to see. While the economic effect of Russia on Asia and Europe is still relatively minor by contrast. This apparent success of China and the lack of it in Russia have constantly raised the question of why and whether the Russians could learn from China. The fact that both Russia and China overemphasized the development of secondary industries, at the expense of primary and tertiary industries, clearly demonstrate the guidance of the State rather than via traditional comparative advantage. The piecemeal experimental approach adopted by China is by definition slower going, and is imbedded into the Chinese culture over the past two millenniums. The disastrous Cultural Revolution had an unexpected benefit, as it led to Chinas reform following the natural sequence of agriculture first and industry second.
