China’s reform and opening-up campaign constitutes a history of creating economic miracles. It is also a history in which different economic institutions competed against one another to promote growth and development. The planned economy and the market economy represent two entirely different technical routes in the government’s economic governance. They co-existed and rivaled with each other and experienced waxing and waning throughout the competition cycle. Eventually, China chose the market economy which is lower in transaction costs and gave up the planned economy which was higher in transaction costs.