This paper seeks to construct an explanation of China's sustained rapid economic growth over the era of its systemic reform, which centers around the notion of an evolving ''regime of accumulation'', or development path, that embodies an uneasy mix of the attributes of allocative and productive efficiency. The paper provides two main propositions. First, in contrast to the general direction of market reform in the institutional dimension, and in contradiction to the principle of comparative advantage, China's actual path of industrialization and economic growth has been in the direction of capital deepening. Second, China's reformed economic institutions have encompassed both market-conforming and market-supplanting elements, represented by non-state-owned enterprises and state-owned enterprises, respectively, with the former accounting for the improvement in allocative efficiency while the latter accounting for the improvement in productive efficiency. The paper concludes with a discussion on the social implications of the findings and propositions.
 
November 30, 2006.