This is an excellent companion volume to the one above. It is the first comprehensive analysis by an economist of how China has emerged since 1978 as one of the largest trading nations and with the world's fastest-growing economy in the 1980s. Lardy places China's trade policy in a stimulating context. After World War II developing countries faced two basic alternatives in trade policy: an outward-oriented strategy that sought to link the domestic economy with the globe's in order to foster industrialization; or an inward-oriented strategy that sought to spur industrialization through stiff protection and replacement of imports with domestically produced manufactures. China followed the inward strategy until the 1970s; then it embarked on a strategy of trade liberalization. The contrast in the results has been stunning. By liberalizing trade China became the 13th largest exporting country in the world, its economic growth rates increased by more than half and the Chinese standard of living rose substantially. Lardy concludes with suggestions as to how China's experience may be relevant to both eastern Europe and the former Soviet Union.
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