The chinese economic strategy emphasizes an explosion of production and jobs outside the state enterprise sector. The fruits of rising productivity are then used to manage the problems of debt, state enterprise deficits, security threats, unemployment, infrastructure scarcity, and discontent over unequal degrees of progress by different sectors of society. This emphasis on construction produces more rapid growth, less inflation, and a greater sense of common interest than the Eastern European approach, which gives priority to destruction of the institutions of socialism rather than to construction of a productive market economy. The absence of a plan is not the same thing as the existence of a market.

The differences between Chinese and Soviet performance derive from profoundly different economic and political strategies. Much of the West long believed a myth that China was an impoverished version of the Soviet Union which must inexorably follow the latter's failures—because, after all, both were communist countries. On the contrary, China has been following a model of development more similar to South Korea than to its formerly communist bedfellows.

Based on analysis of neighboring Asian countries, including most notably South Korea, Taiwan, Hong Kong,...