As the rural township, village and private enterprises are becoming more and more significant in the Chinese economy, this book focuses on the comparison of the rural (non-state) and state firms in terms of performance. The analysis is based on the empirical results from estimating various production functions applied to cross-section and panel data. Both aggregate and firm-specific efficiencies are examined in the case-studies, exploring the potential sources of efficiency differentials such as ownership, scale, factor intensity, location and economic reforms. Special attention is also paid to the regional comparison of industrial development and performance. The implications of the findings in the book for economic and reform policy are then highlighted.