The article discusses how China's economy evolved in the 1980s and 1990s, with rural areas initially thriving but later being overshadowed by urban development. The shift towards state control in urban areas led to negative consequences such as income inequality and reduced personal income growth. Despite rapid GDP growth, the overall welfare impact varied. The authors compare China's growth with India's democratic model to challenge the belief that democracy hinders economic progress. As China faces economic challenges in the present day, the need for significant institutional reforms is emphasized.