Summary — The paper grasps some aspects of the evolution of the economic systems in China and the USSR/Russia since the Tiananmen crisis (1989) and the break-up of the Soviet Union (1991).

Since then on Russia and China took very different routes toward the economic transition from a planned economy to a market economy. Russia adopted the " big bang " approach (shock therapy) and the near term results have been devastating. In sharp contrast, the Chinese success has been explained within the framework of the gradualist approach.

This paper argues that the dichotomy between the " big bang " and gradualist approach is too simplistic and fails to grasp the fundamental structures that are embodied in the economic processes in Russia and China. The paper — which basically accepts the institutionalist and evolutionary approach — points out: 1) the different constraints of the socialist institutions and economic structure; 2) the importance of a stable framework for a successful transformation and the fact that this framework cannot be created quickly. The hybrid character of both economies seems to be the outcome of this situation.