This unit, developed for high school and community college students, has a two-fold purpose: to introduce students to free market and planned economic systems, and to examine China's recent efforts to supplement its planned economy with market mechanisms. The unit is appropriate for a variety of courses, including economics, social studies, contemporary issues, and Asian studies courses. The unit consists of four lessons and a teacher background article on recent economic reforms. Lesson 1 is an introduction, through slides, to the complex issue of defining appropriate development goals for a country. (The slides referred to in this lesson are not included with this document). It also introduces students to various policy periods characterized by differing development goals in post-1949 China. Lessons 2 to 4 examine topics ranging from free market versus planned economies, to China's recent introduction of incentives and free market mechanisms into its planned economy, and to an examination of both positive and negative consequences of the Chinese economic reform. The unit includes student handouts, interactive activities, primary source materials, and exercises to develop statistical skills. (DB)