China's transition to a market economy has propelled its remarkable economic growth since the late 1970s. In this book, Nicholas R. Lardy, one of the world's foremost experts on the Chinese economy, traces the increasing role of market forces and refutes the widely advanced argument that Chinese economic progress rests on the government's control of the economy's "commanding heights." In another challenge to conventional wisdom, Lardy finds little evidence that the decade of the leadership of former President Hu Jintao and Premier Wen Jiabao (2003–13) dramatically increased the role and importance of state-owned firms, as many people argue. This book offers powerfully persuasive evidence that the major sources of China's growth in the future will be similarly market rather than state-driven, with private firms providing the major source of economic growth, the sole source of job creation, and the major contributor to China's still growing role as a global trader. Lardy does, however, call on China to deregulate and increase competition in those portions of the economy where state firms remain protected, especially in energy and finance.

"Everyone concerned with the future of China in the global economy should carefully consider Lardy抯 thesis."

——Lawrence H. Summers, former US Treasury Secretary and Director of the National Economic Council

"Nick Lardy is one of the world抯 leading experts on the Chinese economy. This book is critical reading for anyone trying to gauge China抯 economic prospects."

——Robert Rubin, former US Treasury Secretary and cochairman of the Council on Foreign Relations

"At a time when the new conventional wisdom is that the Chinese dragon is deploying 'state capitalism' to challenge the international market economy, Lardy has mined the data to discover China抯 real driving engine: its private sector."

——Robert B. Zoellick, former World Bank President, US Trade Representative, and US Deputy Secretary of State

Nicholas R. Lardy is the Anthony M. Solomon Senior Fellow at the Peterson Institute for International Economics. He joined the Institute in March 2003 from the Brookings Institution, where he was a senior fellow from 1995 until 2003. Before Brookings, he served at the University of Washington, where he was the director of the Henry M. Jackson School of International Studies from 1991 to 1995. From 1997 through the spring of 2000, he was also the Frederick Frank Adjunct Professor of International Trade and Finance at the Yale University School of Management. He is an expert on the Chinese economy.

Lardy's most recent books are Markets over Mao: The Rise of Private Business in China (2014), Sustaining China's Economic Growth after the Global Financial Crisis (2012), The Future of China's Exchange Rate Policy (2009), and China's Rise: Challenges and Opportunities (2008). In 2006, he contributed chapters on China's domestic economy and China in the world economy to China: The Balance Sheet (Public Affairs, 2006). In 2004, he coauthored Prospects for a US-Taiwan Free Trade Agreement with Daniel Rosen. His previous book, Integrating China into the Global Economy, published in January 2002, explores whether reforms of China's economy and its foreign trade and exchange rate systems following China's WTO entry will integrate it much more deeply into the world economy. In September 1998, he published China's Unfinished Economic Revolution, a study that evaluates the reform of China's banking system and measures the economic consequences of deferring reform in the state-owned sector. Some of his other publications include: Debating China's Exchange Rate Policy (2008); China: Toward a Consumption-Driven Growth Path (Peterson Institute for International Economics Policy Brief 06-6, October 2006); China's Role in the Revived Bretton Woods System: A Case of Mistaken Identity with Morris Goldstein (Peterson Institute for International Economics Working Paper 05-2, March 2005); What Kind of Landing for the Chinese Economy? with Morris Goldstein (Policy Brief 04-7, 2004); "China and the Asian Contagion," Foreign Affairs 77, no. 4 (July/August 1998); "The Role of Foreign Trade and Investment in China's Economic Transformation," China Quarterly, no. 144 (December 1995); China in the World Economy (1994); "Chinese Foreign Trade," China Quarterly, no. 131 (September 1992); Foreign Trade and Economic Reform in China, 1978–1990 (Cambridge University Press, 1992, paperback, 1993); Agriculture in China's Modern Economic Development (Cambridge University Press, 1983); and Economic Growth and Distribution in China (Cambridge University Press, 1978).

Lardy is a member of the Council on Foreign Relations and of the editorial boards of Asia Policy and the China Review.

He received his BA from the University of Wisconsin in 1968 and his PhD from the University of Michigan in 1975, both in economics.