How China's Transition to a Market Economy Propelled it Past Russia's Reform in the '90s

Over the past twenty years, one of the major economic policies of Communism has been the paradigm shift from centrally planned economies to market or mixed economies and modernization. Two countries that best exemplify this integration into the international economy by formerly centrally planned economies countries are China and Russia, with two greatly different results. This paper looks at how China's slow and gradual transition to a market economy propelled it past Russia's shock therapy reform of the early 1990s.

An important step to understanding Russia's lack of foreign integration and general lackluster economic performance since the fall of communism is understanding the history of invasions from Mongolia and European powers. The precursor to the Russia state was Kievan Rus', an Eastern Slavic state dominated by the city of Rus from the late 800s to around 1237AD, which is now northern Russia. In 1236 around 35,000 mounted archers crossed the Volga River with Batu Khan and Subutai and started the Mongol invasion of Kievan Rus'. Many scholars believe that believe that the Mongol occupation of Rus' gave rise to the idea of "oriental despotism", today used to describe any despotic form of government that opposes the western tradition, but refers to rent-seeking, manipulating the economy instead of gaining wealth through trade. In addition, many scholars contend that the oppression of the Mongols retarded Russia's political, social, economic and scientific develops as compared to Europe by about two hundred years. After finally defeating the Mongol-Tatars around 1380 Ivan III takes the title "grand of all the Russias" and by 1547 Ivan IV was crowned the first Tsar of Russia (May).