This policy brief argues that Minxin Pei’s China’s Trapped Transition: The Limits of Developmental Autocracy contains a number of useful insights into the political economy of contemporary China. 

China’s economic transition is not ‘trapped’. Instead, China has the capacity to move forward to a more sophisticated and equitable economy.

This brief adopts a neo-institutional approach to derive some generalizations about how China’s policies are enforced, why enforcement remains such a problem, and what foreign firms can do to meet the challenges provided by China’s enforcement regime.

The reform of the urban housing system, begun in the late 1980s, has resulted in a general improvement in accommodation for most of the urban population in China. In less than twenty years, the government managed to provide new and reasonable quality owner-occupied housing to as much as 80 per cent of the urban population.

For the past 20 years, China has embarked on a multi-track programme of reforms to build a bankruptcy system. The passage of an Enterprise Bankruptcy Law in 2006 (2006 EBL) represents a milestone, but there is still a long way to go.

Competition policy and law, appropriately implemented and enforced, are essential to the optimal functioning of a market-orientated economy.