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China's incremental reforms have been compared favorably as a transition strategy with the "shock therapy" attempted in Eastern Europe and Russia. Reality is more complex, progress is mixed, and the country is now facing major challenges from delayed reforms, especially in the industrial and financial sectors. How are the state's priorities set? Relevant theories on socioeconomic development and transitions will be analyzed through a detailed study of the policymaking process in China. China provides an interesting empirical testing ground for comparative theory, as it has moved from a statist model of development to one that makes greater use of market forces within an authoritarian political structure. The course first analyses the role of different government agencies in the policy process. Second, it provides an analysis of the politics of the transition, with detailed discussion of economic and social policy formulation and implementation.