China's transition from a planned to a market economy has required a fundamental change in the role of government in economic decisions. Progress in reforming public investment management (PIM) has been uneven, with notable successes alongside glaring weaknesses. This report examines the institutional framework of China's PIM system and its evolution through the transition period, its, efforts at reform, and outcomes. The government s strategy was to reform the existing PIM framework incrementally by decentralizing responsibility to subnational governments (SNGs) and opening up investment to private participation at the margin. The process of decentralization and marketization proceeded much faster than expected in the 1980s and 1990s, when dismantling the planning mechanisms caused a steep decline in government revenues, especially central government revenues. China's transition from a planned to a market economy has required a fundamental change in the role of government in economic decisions. Among the most important are those affecting investment, where reform has seen the Chinese government curtail its role and attempt to shift from directing the overall pattern of investment to ensuring adequate support to economic growth and public services.