This paper analyzes the Chinese model of gradual transition from a planned to a market-oriented economy and the shift from hard to soft authoritarianism. The first section of the paper examines the major features of the Chinese path of reform including (1) growth with prolonged stability, (2) soft-authoritarianism, (3) incremental economic reform with delayed political liberalization, and (4) an inclusionary dominant party system. The second part of the paper enumerates the weaknesses of the Chinese reform strategy. This article holds that despite achievements of the Chinese reform, the reform has serious limitations. The government largely failed to implement significant political reforms, and because the political reform has lagged behind economic reforms, rent-seeking and corruption have become institutionalized in the transition process. To mitigate those thorny problems, the government often resorts to traditional administrative measures that cause the economy's dynamic growth to come to a halt and retard institutional development. Essentially, Beijing avoided the pains at the beginning of the reform but is paying the long-term price now. The third part of the article deals with the implications of the Chinese reforms for other transition and developing countries. The Chinese reform has resulted in fast and continuous growth. In the aftermath of the failure of Yeltsin's shock therapy, some argue that China might have invented a preferable approach, i.e. gradual transition to a market economy. The article concludes that due to different initial conditions for reform and unique historical, cultural, and external factors, China cannot serve as a comprehensive blueprint-in terms of policy measures and performance criteria used to evaluate those policies--for other transition and developing countries. It is insufficient to suggest that the Chinese economic miracle will be repeated in other developing countries.