The gradualism of economic reforms in China and Vietnam (especially in China, which has led the way in this regard) has been commented on favourably by many analysts studying transitional economies. Early market reforms in China and Vietnam were constrained by political considerations and consequently, began in agriculture and in China’s case, in rural areas with the development of town-and-village enterprises as well. It is argued that at the time when the reforms began, they were socially responsible. However, they have created a legacy which has resulted in agricultural land disputes and many town-and-village enterprises now face new economic challenges resulting in social conflict as the structure of China’s economy alters and greater market competition occurs. A further relevant policy issue which is discussed is whether commercial industrialised farming should be encouraged at the expense of the existing predominantly small-scale household farming in China and Vietnam. At present, titles to agricultural land continue to be held by village councils and villagers only have conditional user rights to the land allocated to them. These rights can be taken away by village councils and the use of the land involved can be reallocated which has been increasingly necessary with structural economic change in China and Vietnam. Some villagers believe that their land is taken unfairly and that they are not adequately compensated for its loss. Why this problem exists and the difficulties of solving it are given particular consideration