Property Rights and New Commercial Organizations: A Comparison of Agricultural Reform in China and Russia

The transition from a centrally planned to a market economy seems to have been more successful in China than in Russia. While China has been one of the fastest-growing economies in the world since the initiation of market reforms, Russian output has fallen dramatically even after adjusting for problems in under-estimating data. How should we interpret this difference? Does it mean that China’s gradualist reform strategy is superior to Russia’s strategy of rapid privatization? Does it mean that the Chinese strategy has solved the key problems of transition where Russia has failed? Moreover, does it mean that China can maintain its gradualist strategy to achieve further success? Finally, does it mean that Russia should alter its rapid reform strategy and adopt the Chinese pattern? While scholars who study socialist reform hold different opinions on these issues, based on a comparison of the agricultural reforms which have taken place in China and Russia, I will argue that in the case of agriculture neither Russia nor China have yet solved a fundamental problem. Moreover, Russia’s experience of radical privatization of the large, state-owned organizations (SOEs) may hold important lessons for China’s reform.