Most discussions of the development of market socialism in China adopt an “institutional approach” in which socioeconomic and political organizations are described as a complex set of arrangements determined by the policies and role of the Communist Party. Such institutions are often seen to be little more than passive forces responding to the imperatives and stipulations of the party. However, the character and continuing development of market socialism is far more complex than this. It is made up of interacting forces that are the outcome of the purposive actions of economic agents that, although created and nurtured by the party, create tensions within the socioeconomic structure and thereby shape the direction of societal change. It is these that constitute many of the defining characteristics of market socialism. There are, the tensions between the imperatives of an emerging market economy and the political imperatives of the party. But there are others that are determined by the goals and values of a diversity of agents within both the state-owned and privately owned sectors of the economy. For an understanding of these, we argue in this article for the need to adopt an “agency approach,” that is, one that focuses on the key roles of actors and agencies in shaping institutional arrangements of the sort that constitute present-day market socialism. This, we argue, does not displace an “institutional” theoretical perspective but complements it, thereby offering a more complete insight into the generic character of a socioeconomic structureÑin this case, Chinese market socialism. © 2013 Wiley Periodicals, Inc.