Douglas Elliott is a Fellow in Economic Studies at the brookings Institution Kai Yan is a ph. D. student in Finance at Yale uni- versity and was an intern at the Brookings Insti tution KNow The authors thank both the John L. Thornton China Center and the Economic Studies program at Brook- ngs for their support of this work and particularly Jonathan Pollack for his detailed and intelligent sugges- tions on the drafts, and Ken Lieberthal and Wang Feng for their continuing support. The authors would also like to gratefully acknowledge the assistance of a number of experts who provided background information and, in some cases, detailed review comments on earlier drafts. These experts include Nick Lardy, Pieter Bottelier, Andrew Sheng, Shengman Zhang, David Dollar, Jason Bedford, Michael Pettis, Logan Wright, Joyce Poon, Changchun Hua, Andre Meier, Vincent Chan, Alicia Garcia-Herrero, Stephen Green, Wei Hou, Jun Ma, Frank Packer, Rebecca Terner, Nick Ronalds, Jiemei Bao, Chang Chun, Ning Zhu, Charlene Chu, Thomas Orlik, Dinny McMahon, John Caparusso, Lawrence Chen, and a few who preferred to remain anonymous. Any errors or omissions are solely the responsibility of the authors and the opinions expressed are solely those of the authors and do not represent the views of the Brookings Institution. Finally, we would like to thank Jeffrey Gianattasio for his expert research assistance. He played a key role in bringing this paper to fruition.Acknowledgments: The authors thank both the John L. Thornton China Center and the Economic Studies program at Brook￾ings for their support of this work and particularly Jonathan Pollack for his detailed and intelligent sugges￾tions on the drafts, and Ken Lieberthal and Wang Feng for their continuing support. The authors would also like to gratefully acknowledge the assistance of a number of experts who provided background information and, in some cases, detailed review comments on earlier drafts. These experts include Nick Lardy, Pieter Bottelier, Andrew Sheng, Shengman Zhang, David Dollar, Jason Bedford, Michael Pettis, Logan Wright, Joyce Poon, Changchun Hua, Andre Meier, Vincent Chan, Alicia Garcia-Herrero, Stephen Green, Wei Hou, Jun Ma, Frank Packer, Rebecca Terner, Nick Ronalds, Jiemei Bao, Chang Chun, Ning Zhu, Charlene Chu, Thomas Orlik, Dinny McMahon, John Caparusso, Lawrence Chen, and a few who preferred to remain anonymous. Any errors or omissions are solely the responsibility of the authors and the opinions expressed are solely those of the authors and do not represent the views of the Brookings Institution. Finally, we would like to thank Jeffrey Gianattasio for his expert research assistance. He played a key role in bringing this paper to fruition. Douglas Elliott is a Fellow in Economic Studies at the Brookings Institution. Kai Yan is a Ph.D. student in Finance at Yale Uni￾versity and was an intern at the Brookings Insti￾tution