Based on the survey of the literature on China's recent reform experience, this paper proposes to see China as a four sector economy under a semifederalist government. The four sectors are the agriculture, the state industry, the semistate rural industry and the private industry. The four sectors are divided and grouped under the jurisdiction of the increasingly more autonomous local governments. The economy faces the challenges that, first, as a development problem, agriculture labor needs to be allocated to the industry. Second, as a reform problem, the efficiency of state-owned enterprises needs to be improved and the ownership in township and village enterprises needs to be restructured. Third, government power needs to be structured to ensure a check-and-balance between the central and the local governments to offer protection to property rights. China's experience suggests a model of development featured by multiple types of organizations under a modified nondemocratic government.
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