During its 25 years of reform China has made impressive progress in the transition to a market economy. Much of the production and distribution in China is managed through the market, and the efficiency of this mechanism is evident in the country’s sustained rapid growth. While the market is good at many things, however, it is not good at everything. One place in particular where the market breaks down concerns the use of natural resources and the environment, particularly where some important resource is freely available. While China’s record of production and GDP growth is fantastic, its record of During its 25 years of reform China has made impressive progress in the transition to a market economy. Much of the production and distribution in China is managed through the market, and the efficiency of this mechanism is evident in the country’s sustained rapid growth. While the market is good at many things, however, it is not good at everything. One China house record of production GDP growth is fantastic, its record of