Economics & Finance / Macroeconomics / Economic Development & Transition

Private sector is the core engine driving contemporary Chinese economic growth|中国私营企业的崛起私企才是中国经济真引擎

Markets over Mao: The Rise of Private Business in China

Nicholas R. Lardy

Markets over Mao: The Rise of Private Business in China (Nicholas R. Lardy) Nicholas R. Lardy's book challenges the conventional wisdom that the Chinese economy is dominated by "state capitalism," arguing that the private sector is the core engine driving contemporary Chinese economic growth. The book systematically documents China's transformation from a backward system where the government set prices and bureaucrats allocated resources to an economy characterized by market pricing and competition. Through comparative studies, the author finds that private enterprises significantly outperform state-owned enterprises (SOEs) in terms of return on assets, job creation, and export contributions, and this lead has remained strong despite recent policy fluctuations. While SOEs still maintain a monopoly in certain service sectors such as finance and telecommunications, Lardy argues that this inefficient distribution of productivity has become a major obstacle to China's future development. The book ultimately concludes that China's continued economic prosperity depends on further market-oriented reforms, eliminating remaining price distortions, and opening up government-protected monopolies.