Consistent with this is the fact that China continues to be ruled by an authoritarian, neo-Stalinist state which is responsible for strategic planning and large swathes of economic co-ordination. In this, the Chinese government and its economic planners have undoubtedly learned a great deal from the development models pioneered by other countries in the East Asian region. In preparation for the economic reforms that began in the late 970s, Chinese economic planners are reputed to have turned to early examples of how to combine state socialism with private sector activity, such as the debates led by Bukharin in the 1920s Soviet Union and the experience of Hungary’s ‘new economic mechanism’ after 1968 (Fewsmith 1994). Viewing the ‘lessons’ implied there as inadequate to the task of igniting economic growth China, they soon turned their attention to the experiences of some of their East Asian neighbours; those that had emerged from the 1950s and 1960s as ‘developmental states’. While much debate focussed on the developmental experience of Japan and Taiwan, it was probably South Korea that attracted most attention. With its very high levels of capital concentration (that is, 30 companies responsible for over 80 percent of GDP by the 1980s, and this concentration rising into the early 1990s) and strategic direction exercised by an authoritarian, militaristic state, it is not hard to see why South Korea, of all East Asian developmental states, might emerge as a model for Chinese government perceptions of the country’s economic future (Kim 1997). This ‘demonstration effect’ – a form of knowledge transfer between the Northeast Asian region and China – was subsequently complemented by major investment flows from Japanese, Korean, Taiwanese and Hong Kong companies which in the case of the first three have now resulted in China’s integration into the world economy via foreign-dominated global production networks.