The enterprise revolution is probably the most noteworthy chapter in China’s thirty years of economic reform and opening up. In The Micro-foundation of China’s Market Economy, the author traces the interaction and evolution of state owned, privately-run, joint-stock, and foreign-invested enterprises against the backdrop of reform and opening up. The author also examines the changing external environment in which these four types of enterprises grew and explores the necessity and dynamics of institutional innovation. The book focuses on the macro framework and the major events; equal importance is placed on empirical description and theoretical interpretation.