ECONOMIC TRANSITION: COMPARING CHINA WITH RUSSIA

China has experienced impressive ecenomic growth since I978, while Russia has struggled with severe recessions and obvious dcciincs in real income, This paper examines the determinants of success in China.The refbrm poiicies and the initial conditions on the eve of reform are compared between China and Russia.Some of implications are provided based on comparative analysis.The JapaneseSociety forSlavic and East European Studies Katsuhire MIYAMOTO ET AL. ket become$ increasingly more important, In the current Chinesc society.every enterprise is pursuing to maximize its profit.It is common knowledge that cn- terprises must produce the goods that are needed by consurners, and must produce thcm in an efficicnt way, j, Kornai defined thc socialist econoniy as a resouree constrained economy2.Under this system, both the shortage and the enterprise's soft budget constraint are two common phenomena in the whole society, However, after near twenty years of reform, Chinese econemy can't be characterized as a shortage economy again.