These two books have very different agendas: Rebalancing Growth in Asia is concerned with correcting economic imbalances, whereas Transforming the Chinese Economy recounts and celebrates China's economic successes, and—with the notable exception of one chapter—does not dwell on imbalances. Rebalancing generates its findings from econometric exercises, whereas Transforming focuses on institutions and policies. In these ways, the two books complement each other.

Rebalancing is an IMF study. It is concerned with excessively high dependence on external demand (exports) and very high rates of savings. The first three chapters (by Adil Mohommad, Papa N'Diaye, and Olaf Unteroberdoerster; Sonali Jain Chandra, Malhar Nabar, and Nathan Porter; and Malhar Nabar and Mutaza Syed, respectively) look at Asia as a whole. These establish the greater dependence on external demand in Asia than found elsewhere, the advisability of adopting rebalancing policies on a continent-wide basis, the importance of unusually high corporate saving as a component of the over-saving phenomenon, and the problem of inadequate investment that characterizes much of Asia outside of China. The book then turns to focus exclusively on China, whose imbalance problems are quite different in some ways.

The chapters on China study the sustainability of China's export-dependent growth model, the employment consequences of successful rebalancing, the determinants of private consumption, the impact of government spending on health and education upon private consumption, and the potential for improvements in consumer financial institutions to increase consumption. These are useful and informative discussions, despite occasional lapses (“the authorities have carefully avoided bubbles in construction-related sectors, equity markets, and real estate” [p. 85]). The discussion of consumption by Kai Guo and Papa N'Diaye leads to the sensible conclusion that low consumption is not due to China's unique cultural background, and that it can be changed by a variety of policy improvements that would increase household real income, develop capital markets, and prompt faster growth of services. The employment chapter bases its conclusions on simulation exercises using cross-country data, without discussion of the reasons for the low GDP elasticity of employment in China and how that might be changed. Whether substantial rebalancing would be achievable without a substantial reduction in growth rates is not addressed. Interesting issues of a broader political economy nature, such as the correspondence of many of the symptoms of imbalance with increased income inequality—and the possible feedback mechanisms on the dominant model that this suggests—are also not discussed.

The book's results are heavily data-driven, but the data do not receive much attention. Findings such as the unresponsiveness of rural consumption to higher government spending on healthcare cry out for some discussion of the underlying data: in which provinces, if any, was such spending high enough to make a difference? Was provincial spending put into purchasing power parity terms to correct for inter-province differences in price levels? And so on.

Transforming the Chinese Economy is a collection of articles by renowned Chinese economists, and is edited by one of them, Cai Fang, who is also a distinguished demographer. Cai identifies the book's purpose as summarizing the “experiences and lessons from the thirty years of reform and opening crusade” (pp. xi-xii), and he begins in a pugnaciously nationalistic mode: only Chinese economists understand China and are capable of analyzing its development. Foreigners “are often confused with figures and unable to see the truth in them;” there is a “philosophical difference between China and other countries regarding reform” (p. xvii), and China's approach has “prevented the reform in China from falling into any a priori dogmas” (p. xvii). Indeed, “at each stage of implementation, political stability and unwavering commitment to reform have encouraged and empowered the government to follow the principle of ‘Pareto efficiency’ to the maximum extent possible” (p. xxii). Cai puts aside such rhetoric in his own substantive contribution to the volume, a chapter on labor market development and employment organized around W. A. Lewis's famous dual economy model. Cai treats labor market development in terms of the working out of this model, which has meant a “gradual repeal of the hukou system” (p. 91). He makes a vigorous case for further weakening the hukou system by removing its welfare provisioning function, so that eligibility for social security and protection, education, and public services would no longer be determined by one's registration status.

Chen Xiwen writes about rural reforms since 1978, while reform in the industrial sector is chronicled by Chen Jiagui and Wang Qin in a separate chapter. Neither chapter finds any serious problems or mistakes in the history they relate, forwarding an uncritical view that is contradicted in other chapters. Banking system reform is discussed by Yi Gang, whose essay includes an interesting discussion of the U.S. Glass-Steagall Act (implemented in 1933 and repealed in 1999) and its influence on the debate about financial structure in China. Yi concludes that the banking sector faces a complicated future in which it must negotiate a path toward a more market-oriented industry, with a currency moving toward full convertibility and interest rates becoming market-determined.

Hu Angang takes on public finance and transformation of government's role in the economy. This is a substantive chapter detailing the many changes that have occurred in the relations between state, economy, and society. Hu advocates enhancing “democratic decision-making,” transparency, and public supervision of public finances, with a view to “provid[ing] citizens with equal opportunity, enabling people—especially disadvantaged groups—with different household registration and different incomes, to enjoy equal access to public services” (pp. 196–97).

The history of China's integration into the global economy and the lessons drawn from this process are presented by Justin Yifu Lin and Yan Wang. This chapter begins by rehearsing Lin's well-known distinction between “comparative advantage defying” (CAD) and “following” (CAF) policies. Part II is entitled “Why Was China Closed?” but it fails to answer that question. Factors such as the Cold War, the Korean War, the COCOM list, and the western embargo on trade with China, all of which helped dictate the development strategy at the time, go unmentioned. Nevertheless, the chapter provides an informative account of the reform and opening-up process, including the beginning of a discussion of major imbalances. For some reason, the chapter includes a discussion of the lessons of China's experience for Africa.

Although published in 2010, the book does not reflect the events of 2008–09, when China, hit by the global economic downturn, took vigorous corrective actions to preserve growth and employment and the challenges to its export and investment oriented growth model grew in magnitude. While economic imbalance is not the primary subject of this book, the chapter on “Beyond the East Asian Miracle” contributed by Wu Jinglian and Fan Shitao deals with the topic. The economy described by these authors is light years away from “Pareto efficiency.” It follows an “outdated growth model” characterized by erroneous policies and unfinished reforms that distort incentives, create rent-seeking opportunities, and promote capital accumulation and resource use rather than innovation as the primary source of growth. China cannot continue relying upon such a growth model, the authors write, yet no new one has yet been established in its place.

Growing income inequality is comprehensively examined by Li Shi, who emphasizes the country's enormous urban-rural income gap and the importance of unemployment in magnifying economic inequality. Li calls for better policies for protecting and helping vulnerable groups, larger central fiscal transfers to equalize regional public spending, a more progressive tax system, and reform of the government's functions. Specifically, government's concentrated economic power should be reduced and democratic supervision of government increased, and thus fewer means and incentives for corruption made available. “The negative impact of corruption on income equality is the most serious problem” (p. 311).

The last chapter, by Zhang Linxiu and other contributors, deals with rural labor force changes and their impact on women. The authors rebut the argument that agriculture has been entirely “feminized,” but show that such a phenomenon is indeed true for middle-aged women and for those in livestock production. Strangely, while this chapter on women identifies as a major challenge the lack of education in the poorer, more remote regions that will be furnishing much of the labor force of the future, it does not discuss the differential lack of education available to girls in such regions.