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A dynamic theory of corporate governance should be considered for transition economies that concentrate mainly on gradualism in institutional and legal reforms. Aside from pacing and sequencing, emphasis is drawn to the complementarity exhibited in structural reforms for banking, state-owned enterprises, and the securities sector. Under a gradualist strategy, the theory draws attention not only to the merits but also to the limits of the “transitional” institutions that China adopted. Despite the fact that transitional institutions are not entirely consistent with the basic features of the market, these prove to have a significant impact on improving efficiency during the economic reform's early stages. However, these institutions should be either abandoned or adjusted at later stages of transition. This chapter emphasizes the major findings of the study as well as the implications attributed to China's experience.

The arrival of the Dalai Lama and his top officials in Beijing on 4 September 1954 opened a critical window of opportunity for the Chinese leadership. Winning over the Dalai Lama had been central to Mao's gradualist strategy, but until then direct access of the Chinese to the Dalai Lama had been extremely limited. The CCP now had a rare opportunity to create a favorable impression about China, the CCP, and socialism. It also afforded the Chinese an excellent opportunity to revisit a number of outstanding issues that had been left in abeyance in 1951 and 1952, such as the Military-Administrative Committee, the Tibetan army, Tibetan currency, and the Panchen-Dalai lama conflict.

After an amazing six months in Beijing and inland China, on 12 March 1955, the two lamas and their entourages set off for Qinghai Province to start their trip back to Tibet. Whenever the Dalai Lama went to visit Chinese cities, the top officials, such as the governor and the first party secretary, always personally welcomed him if they were in town. The Dalai Lama arrived in Lhasa on 23 June 1955. For Mao, the trip was a resounding success. His gradualist strategy had set out to win over the Dalai Lama and then work down through him to transform Tibet and Tibetans. For the Dalai Lama, the trip was also a great success. He now felt that Tibet could fit into the new China as an autonomous region run by Tibetans so consequently felt great optimism and hope for the future.