Introduction -- State versus market capitalism. Product markets ; Labor and capital markets ; Competition ; Evolving role of economic planning -- The reform of state-owned enterprises. Grasping the large, releasing the small ; Emergence of SASAC ; Did the Hu-Wen reforms succeed? -- The rise of the private sector. Changing structure of ownership ; Role of private firms in generating employment and exports ; Explaining the growth of the private sector -- The future reform agenda. State firms drag down growth ; The opportunity in services ; Financial sector reform ; Power of the Chinese state in perspective ; Debating the role of the market -- Appendix A: Alternative measures of private sector credit -- Appendix B: State versus private borrowing costs -- References.