This paper addresses the challenges facing China’s surging economy.  As the country’s economy grows and becomes more open to the world market, it is also emerging as a greater force in the world economy. Furthermore, the party/state has (so far) been remarkably effective in adapting both to the governmental challenges of providing more regularized and institutionalized procedures for managing its own affairs as well as to the challenges of a rapidly privatizing market economy.

The challenges facing the party/state – including corruption, social disorder, and dissent in various forms – may yet overwhelm the system, but it seems far more likely that for at least the foreseeable future that the government will continue a process of adaptation that will support China’s continued progress towards globalization and a market economy. Nevertheless, the dominance of the party/state means that there will continue to be the “interstices” between market and power that can be exploited both for personal profit and to resist the sorts of reforms that drive through-going marketization and rule of law.

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