This paper examines the patterns of entry into self-employment in urban and rural China and across different reform stages, focusing on how communist cadres have responded to new market opportunities. Analysis of data from a national representative survey shows that both education and cadre status deter people from entry into self-employment in urban areas but not in rural areas. However, urban cadres have become increasingly more likely to be self-employed over time, and only those who became self-employed in the late reform stage have enjoyed higher income returns. The paper concludes that the labor mobility process should be taken into account in studying changes in advantages/disadvantages associated with different social groups in post-socialist transition economies. (Contains 4 tables, 1 figure and 9 notes.)