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Economies in Transition: China and Russia

15 January, 2016 - 09:47

LEARNING OBJECTIVES

  1. Discuss the major problems in transitioning from a command socialist economy to a market capitalist one.
  2. Compare the approaches to economic transition taken in China and Russia.

Just as leaders of the Soviet Union had to create their own command socialist systems, leaders of the economies making the transition to market capitalist economies must find their own paths to new economic systems. It is a task without historical precedent.

In this section we will examine two countries and the strategies they have chosen for the transition. China was the first socialist nation to begin the process, and in many ways it has been the most successful. Russia was the dominant republic in the old Soviet Union; whether its transition is successful will be crucially important. Before turning to the transition process in these two countries, we will consider some general problems common to all countries seeking to establish market capitalism in the wake of command socialism.