China’s economic transformation since 1978 has been remarkable. At the commencement of the reform period, China’s per capita GDP was lower than India’s, Pakistan’s, Indonesia’s, and Thailand’s, and about 3 per cent of that of the US. Today, it is multiples above Indian, Pakistani and...

This article discusses China’s incremental approach to SOE reform, the difficulties of continuing this approach as the need to make efficiency gains across all sectors of the economy becomes more acute, and future reform options and the challenges in carrying them out.