The political challenge of liberating these markets trumps the economic challenge that there was in liberating markets in goods and services. Without confronting it, however, China will remain an economy hobbled by waste and inequality and will impose its problems through international markets on the rest of the world. Take the incomplete reform of the capital market, for example, which presents a real and immediate danger to continuing, robust recovery of the Chinese economy and threatens perpetuation of the savings-investment imbalance in the international economy. The private banking sector is controlled and truncated in China. State-owned banks serve state-owned enterprises with cheap credit, and fuel their surpluses and excess savings nationally. Private firms, especially small and medium scale firms, which are the most dynamic and largest part of the Chinese economy, are starved of access to funds except at usurious rates of interest. And China pours these excess savings onto the rest of the world through its current account surpluses. These are just some of the immediate consequences of failure to reform Chinese factor markets. Huang’s sharp insight is right. We share his hope that these problems won’t take another thirty years to fix.