The developmental state model originated in Japan and later spread to other East Asian countries. Over the past decade it has ascended to the status of the leading paradigm for the study of the East Asian political economies (Johnson 1982, 1995; Deyo 1987; White and Wade 1988; Amsden 1989; Haggard 1990; Wade 1990; Fallows 1994; Evans 1995; Simone and Feraru 1995; Chan, et al, 1998; Woo-Cumings, 1999). After the summer of 1997, a financial crisis swept over this region and severely challenged the developmental state model (Krugman 1994; Lingle 1997; Sanger 1997; Kim 1998). Despite this fact, it is very unlikely that scholars will abandon this paradigm for explaining the miraculous economic take off in this region over the past four decades. Moreover, many of the wellknown Asian specialists have suggested that this model has been emulated in China. Thus, the largest Asian country has become part of the “flyinggeese” pattern of development led by Japan, followed by the “Four Little Dragons” and the other East Asian countries (Perkins 1986; White and Wade 1988; White 1991; Overholt 1993; Simone and Feraru 1995; Cheng 1998; Gilley 1998). The words of the Chinese leaders, those specially of Deng Xiaoping, as well as the policies recently implemented have further confirmed this view. Given this development, it is disappointing that no case study on China has been conducted within the context of the developmental state theory. Meanwhile, the institutional arrangements for development in other East Asian countries have been examined in relative detail. This study is designed to fill this academic lacuna.