Pressures for change are inherent in leadership succession under any political system. In China, because of his longevity and close involvement in major strategic initiatives, Mao Zedong's passing was bound to intensify such pressures. When he died in September 1976, Mao had held supreme power, largely unchallenged, for four decades. Since 1949, China's economic development had been uniquely, if not consistently, influenced by his personal prejudices and idiosyncratic view of how best to realize the country's development potential.

China's post-Mao economic reforms have generated rapid and sustained economic growth, unprecedented rises in real income and living standards, and have transformed what was once one of the world's most insular economies into a major trading nation. The contrast between China's transitional economy and those in Eastern Europe and the former Soviet Union could not be more striking. Where the latter struggle with severe recessions and pronounced declines in real income, China has looked more like a sprinting East Asian “tiger” than a plodding Soviet-style dinosaur mired in the swamps of transition. The realization that reform measures and energetic growth continue even after the political crisis of 1989 has made China a subject of intense interest far outside the customary confines of the China field. Understood increasingly as a genuine success story, it is moving to the centre of international policy debates about what is to be done to transform the stagnating economies of Eastern Europe, and various aspects of its case now figure prominently in academic analyses ranging from theories of the firm and property rights to the political foundations of economic growth.

Why has China been so much more successful than the former Soviet Union and its East European satellites in making the transition away from a centrally planned economy? While other articles address a wide range of explanations of China's success, this one explores the possible contri- bution of China's grass roots social organization, and particularly its family and kinship structures. Attention is drawn to social factors by the obvious fact that China, through its spectacular recent growth, has taken its place among other Chinese (and Chinese cultural orbit) populations in East Asia, reinforcing the position of this region as the most dynamic portion of the world economy. Could China share with other Chinese populations, despite more than 30 years of collectivist socialism, grass roots social structures that are conducive to economic growth under the proper conditions - social structures that are different in strategically important ways from those in the former Soviet Union and Eastern Europe?

As the People's Republic of China approaches a half century of existence, it seems to be an anomaly. Not only has it survived “the mass extinction of Leninist regimes,” it also continues along the path of reform. And this is despite the widely accepted assumption that Soviet-style systems are, by their very nature, incompatible with the assumptions of systemic reform - namely, the gradual and incremental transformation of economic and political systems by leaders who “use and build upon the existing structures of society.”

The ever-greater roles played by markets and pecuniary incentives, and the increasing decision-making authority of localities, enterprises and individuals, have been central elements of China's economic reforms. Compared with these radical departures from the past, change in the area of property rights has been ambiguous. Depending on one's perspective, China might be seen as on its way to establishing a socialist market economy, in which public and collective ownership forms are predominant, or well along the path to a radical transformation of property rights, including a de facto private agriculture, massive private foreign investment, stock markets and the growth of private enterprise. What role property rights have played in the successes and problems of China's reforming economy is similarly debatable. The view that property rights have remained largely “social” leaves open interpretive possibilities ranging from the conclusion that China offers evidence of the viability of a market socialist option, to arguments that the transformation of property rights remains a major hurdle on the road to an economy that can support sustained growth. The quite different view that sectors experiencing substantial privatization have been the main contributors to the achievements of the reform economy, and that those maintaining public ownership have held back economic growth, is also taken by some.

The nature of the property rights that have characterized China's economy during the years of economic reform, and the influence of property rights and property rights reform on the performance of the economy during that era are the subjects of this article.