In the debate about the stratification order during social transitions in former socialist countries, little research is done about changes in gender inequality in these countries. In this paper, I examine the differences in gender inequality between the public and private economic sectors in China, and the distinct mechanisms of change for the gender stratification order in the workplace. Data analysis shows that there is a dramatic difference. There is a very small or zero gender inequality in the public sector in coastal Chinese cities, where the market economy has developed faster than in other regions of China. However, gender inequality is significant in the private sector in all the cities in the data set with or without controlling for human capital, family status, and political capital. Close examination of the institutions before the social transition shows that there is a powerful institutional system that tries to minimize gender differences in employment. During the market transition, this system continues to exist in the public sector; while in the newly emerging private sector, these institutions do not appear. Gender stratification has different mechanisms of change during social transitions than the stratifications based on social capital, political capital, and human capital. Women do not have the resources bonded with gender in the newly emerging market economy that would allow them to maintain their positions in the gender stratification order. Without the support of institutions, the gender stratification order exhibits a discontinuity in the private sector.