Abstract
The year of 1978 was a watershed in contemporary Chinese history. In the thirty years before 1978, the governance of the whole society was realized through the overall authority or mobilized mass movements.
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Notes
- 1.
Fei Xiaotong’s idea of rural industrialization was also based on the principles of land system and family organization.
- 2.
See Yang et al. (1992, pp. 1–37), Sachs et al. (2003).
- 3.
Walder (1995).
- 4.
In the above-mentioned three rural social changes, peasants were the earliest beneficiaries of reform, with the urban-rural gap significantly narrowed before 1985. In 1978, the average income of the urban residents was equivalent to 2.36 times that of the rural residents, but in 1984 this ratio dropped to 1.86. After 1984, the urban-rural income ratio fluctuated, but until the year of 1989, when the ratio was 2.31, the ratio remained below the level of 1978. See Zhao (1994).
- 5.
Before the establishment of the people’s commune, township enterprises had been called “commune run industry.” In the early period of the people’s commune, they were called “people’s commune industry.” From 1960s to 1984, they were called “commune and brigade run enterprises.” In March 1984, the term of “township enterprises” (xiang zhen qi ye) came into use. In 1983, the central government decided to cancel the people’s communes and establish township governments, and the name of “commune and brigade run enterprises” needed to be changed. After the cancellation of the people’s commune system, the original commune and brigade enterprises were each placed under the management of their corresponding departments, the names and contents of these enterprises became clearly defined.
- 6.
Qiu (1999).
- 7.
See “Regulations of the People’s Republic of China on Enterprises of Collective Ownership by the Working People in Cities and Towns.” It was promulgated in 1991, and came into effect in 1992.
- 8.
See the passage about how the collective ownership system is a part of the redistribution system, in Nee (1989).
- 9.
Xiaoye and Yingying (2005).
- 10.
Chen Jianbo believes that the property rights boundaries of the township enterprises were determined in the transaction between the enterprises and the community/government. The essential elements in the business operation of the enterprises (land, labor force, capital) needed to be provided by the community government, while the government participated in the sharing of net surplus of the enterprise and in the mean time carved up the decision-making space of the enterprise. In this reciprocal transaction, the acquisition of operating elements became the prerequisites for determining property rights boundaries. See Chen (1995).
- 11.
Liu (1996); previously published in Naigu and Rong (1996).
- 12.
See Li (1995).
- 13.
See Zhang (2006).
- 14.
For example, Yang Xiaokai, Wang Jianguo, Willis had used 12 indices to describe the transaction efficiency of defining three types of rights (right of use, right of transfer, right to earnings) for 4 types of property (products, labor, land, financial assets), so as to explain the social changes in China’s rural areas in different stages in the 1980s. In the first stage, the transaction efficiency of defining right of use and right to earnings for products and that of defining right of use for labor and land were significantly improved. In the second stage, the transaction efficiency of defining right of transfer for products and labor and that of defining right to earnings for labor were significantly improved; the transaction efficiency of defining right of transfer for land was somewhat improved. In the third stage, the transaction efficiency of defining all three types of rights for financial assets was significantly improved, and that of defining right of transfer for land was further improved. See Footnote 2.
- 15.
“Work contracted to households” means, the contractor household must pay agricultural tax to the state, sell the products specified in the contract to the state, pay the common reserve fund and public welfare fund to the collective, and the remaining products all belong to the peasants themselves. “Fixing farm output quotas for each household” means implementing the policy of “fixing output, fixing investment and fixing workpoints.” The output in excess of the production target belongs to the peasants, compensations should be made if the output falls short of the target. At present, the form of “work contracted to households” is the most widely adopted. At that time a saying was widely circulated in the countryside, “pay the due amount to the state, leave enough for the collective, and the rest all belong to ourselves.” This is a true picture that shows the priority of rural land use right.
- 16.
Szelényi (2010, pp. 42–53).
- 17.
Of course, it is not enough to see only the authoritarian side, and those who think that township enterprises only have the extensive management pattern, in fact, have not noticed the power of spontaneous rationalization determined by the principle of supremacy of business operation. Firstly, the workers’ discipline was strengthened, that is, the peasants gradually became qualified enterprise employees through strict training in the rigid production system. Secondly, the enterprises’ learning ability for specialized knowledge was greatly improved; most township enterprises would resort to every conceivable means to obtain specialized knowledge, such as digging talents, stealing technology, imitating famous brands, optimizing production process. They took the lead in rationalizing allocation of resources, organizational form and operating channels within the enterprise in various links of business operation, including production process, technology, circulation, sales, etc., and each did their best to obtain profits by faithfully adhering to the principle of rationalizing business operation and maximizing efficiency. Although the motivation of rationalization only came from the business operators, there already existed the typical characteristics of “rational economic activities,” a term used by Weber. Focusing on utility (Nutzleistungen) to obtain the right of disposition, they adopted all means of raising funds (Beschaffungsmittel) in a planned way to generate or transport utility. These activities all existed in the monetary income forms of operation and management. See Weber (2005, pp. 10, 14).
- 18.
See Oi (1995), Fan (1994), Shanhua and Hong (2002). However, to understand the issue from the perspective of the form of whole-people ownership under state agency, there is no logic contradiction between the agentic type of political power manager and the profit-seeking type of political power manager.
- 19.
See Fan (1993), Lin et al. (1994), Naughton (1994).
- 20.
Zhang (2006, p. 97), Hu (1992).
- 21.
Jingdong (2012).
- 22.
Jingdong et al. (2009).
- 23.
Economists refer to this fiscal system as “fiscal federalism.” See Qian and Weingast (1997, pp. . 83–92), Qian and Roland (1998, pp. 1143–1162). About the impact of fiscal decentralization on local government behaviors, see Zhang (2006).
- 24.
See Shang and Liu (2001).
- 25.
See the news article “From ‘smoke rising up in every village’ to ‘concentration in linked areas’: a survey of the industrial zone in Tongzha Town of Hanshan County in Anhui.” The article says, “In the late 1980s and early 1990s, under the guidance of ‘eliminating the administrative villages without factories,’ Tongzha Town launched a vigorous campaign of setting up township enterprises. In addition to the original 20 township enterprises, the 17 administrative villages set up a total number of 39 enterprises, including annular kiln plants, grain and oil processing plants, lime kiln plants, quarries, small compound chemical fertilizer plants, etc. However, these village enterprises did not last long. By the mid-1990s, except a few grain and oil plants, which were still running and processed grain and oil for the local peasants, the other enterprises had all closed doors, or stopped production. As a result, these villages not only destroyed large areas of farmland, but also incurred heavy debts, each of the 17 administrative villages running into debts ranging from tens of thousands yuan to hundreds of thousands yuan.” Retrieved from http://news.sina.com.cn/c/287792.html.
- 26.
Dai Muzhen pointed out that in the process of market-oriented transformation, “the upward flow of information brought about by the mass line did not originate from the bottom-up efforts of the peasants, but was under the top-down control of the state like the opening or closing of valves.” See Oi (1989).
- 27.
Deng Xiaoping said in the Southern talks in 1992, “Don’t engage in argument. This is a invention of mine. Save time for doing real things. If people start arguing, things will become complex, time will be wasted, and nothing will get accomplished. So don’t argue, try bold experiments and blaze new trails. This applies to the rural reform, as well as the city reform.” See Deng (1993, p. 374).
- 28.
In a study on “Xiaogang Village,” a typical example of the contract system reform, Li Jie pointed out that the “Xiaogang story” functioned as a promoter and bridge in the transformation of the fundamental discourse structure of the country. The shaping process of this typical example is also the process of discourse construction for the transformation of the state governance system. Xiaogang Village, as a symbol of state governance, has a symbolic value far greater than the incident itself in China’s social transformation. It marks the state’s reshaping of governance discourse and image in the implementation of the household contract responsibility system. That is, through converting the survival ethics of the peasants into their own governance symbol, the state successfully completed the significant transformation of its discourse logic. On the one hand, the brief highlighting of survival ethics gave incentives to the peasants, as producers bearing the will of the country, to devote themselves into the production process with greater enthusiasm, so as to create a sustained and stable source of revenue for the country. On the other hand, the success of rural reform laid a good basis of legitimacy for the promotion of further market transformation. See Li (2009).
- 29.
Wu Jinglian pointed out that by the beginning of 1983, more than 90% of the production teams nationwide had implemented either “bao chan dao hu” or “bao gan dao hu,” thus eventually establishing the new system in China where the peasants set up their own family farms on the contracted (“bao”) land that belonged to the collective. See Jinglian and Huang (2008a).
- 30.
See Footnote 11; previously published in Naigu and Rong (1996).
- 31.
ibid. pp. 21–22.
- 32.
In the development of township enterprises, the phenomenon of “administration running the whole show” was quite serious. A considerable part of the township governments launched projects blindly without adequate project evaluation and justification in advance, just in order to complete the task, or save face. Many township governments, under the push of administrative forces, spent great efforts to get their projects approved and obtain funds, but the projects eventually failed and became a burden. Because of this, the township governments were later faced with the serious danger of running into heavy debts. See Cheng (2009).
- 33.
See Yang and Zhao (2011).
- 34.
See Gan (1994).
- 35.
See Wang (1997).
- 36.
See Nee and Su (1996).
- 37.
See Lin (1995, pp. 301–354).
- 38.
Fei (1999. p. 456).
- 39.
Ibid.
- 40.
Zhang (2008, pp. 77–81).
- 41.
See Zhou (1998).
- 42.
Liu (1996); previously published in Naigu and Rong (eds.) (1996).
- 43.
About the relationship between the family culture in Wenzhou, the family economy and the private enterprises, see Shi et al. (2004).
- 44.
See Zhang (2006), Yang (2007).
- 45.
Great controversy once existed over the legitimacy of “affiliate operation.” See Hanxian (2002).
- 46.
Zhang Jianjun made a detailed analysis of the restructuring processes and differences in the restructuring mechanisms of the two areas from the three dimensions of fiscal constraints, supervision constraints and information constraints.
- 47.
The embryonic form of the fiscal contracting system had come into being since 1980. At that time, the central government and 15 provinces had implemented the fiscal system of “division of revenue and expenditure, multi-level contract responsibilities.” By 1985, the system had been further improved and popularized. Its main features were “classification of tax categories, verification of revenues and expenditures, multi-level contract responsibilities”.
- 48.
See Deng Xiaoping’s remarks in a meeting with Stefan Korosec, member of the Presidium of the Central Committee of the League of Communists of Yugoslavia, in June 1987. See Deng (1993, p. 164).
- 49.
See Deng (1993, p. 371). In January 1983, the central government issued “A number of issues concerning the current rural economic policy,” which pointed out that since The Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, China’s rural areas had undergone many significant changes. Among them, the change with the most far-reaching impact had been the widespread implementation of various forms of agricultural production responsibility system, and the household contract responsibility system had increasingly become the main form. The household contract responsibility system was a great creation of the Chinese peasants under the leadership of the Party. It was also the new development of the Marxist theory of agricultural cooperation in China. In the same month, Deng Xiaoping said in a meeting with the leaders of the State Planning Commission, the State Economic Commission and the agricultural departments, “I agree with implementing ‘large-scale contract farmers’. We have not done enough to liberate our mind. There are many breakthroughs to make in agriculture, we have not started yet”.
- 50.
See Zhou (2012).
- 51.
Yang Xiaokai believes that the special economic zones in fact were direct imitation of the export processing zones and free trade zones in Taiwan and some capitalist countries. See Yang (2011).
- 52.
In October 1978, after obtaining the approval of the State Council, Sichuan Province took the lead in implementing the reform of “giving greater autonomy to the enterprises,” launching pilot projects in Chongqing Iron and Steel Company and other six local state-owned enterprises. The main contents of the reform were the following: appraise and fix the profit target of each enterprise; set the targets of increase in production and income; allow the enterprises to keep a small amount of profits as corporate fund after the completion of the annual plan at the end of the year; allow the enterprises to give out small amounts of bonus to the workers; allow the enterprises to engage in production beyond the state’s mandatory plans; allow export enterprises to have some foreign exchange earnings at their own disposal. In January 1979, Sichuan Province increased the number of pilot enterprises from 6 to 100, and at the same time carried out experiments on the expansion of management autonomy in the state-owned commercial enterprises. In the same year, the Capital Iron and Steel Company also joined the pilot program, which was a landmark event in the reform. See Zheng (2008, pp. 30–31).
- 53.
In 1957, after China’s socialist transformation, the system of planned economy was basically established; almost all enterprises became state-owned enterprises, private enterprises and other forms of ownership no longer existed. Under this system, all enterprises were incorporated into the highly centralized planning system of the state. The enterprise’s personnel rights, management rights, distribution rights, as well as various types of benefits and welfare for the workers, were all appointed, allocated and regulated by the state in accordance with unified standards. The enterprise became a subsidiary organization with no independent rights, no independent interests and no independent responsibility; or, more precisely, the enterprise became a subordinate administrative organization that completed mandatory tasks and met operational objectives under the government’s arrangement. In management system, the state adopted the approach of “unified leadership, hierarchical management” towards the enterprises. The state-owned enterprises were basically divided into two categories, those directly under central management and those under the joint management of central and local authorities, of which the enterprises directly under central management accounted for half of the total industrial output value. In planned allocation, almost all of the business activities of the enterprise were specified by state plans. Each year the government departments in charge would issue planned targets in output value, production output, products, technology, funds, labor productivity, total wages, average wage and so on, and the enterprises should timely fill out more than 40 kinds of forms for reporting statistics to the higher authorities. In investment management, the state strictly examined and approved the investment projects, and the enterprises had no investment decision-making power. In financial management, the state implemented “unified state control over income and expenditure.” The funds needed by the enterprise were all allocated free of charge by the central government or the local government in full accordance with the relationships of affiliation. The state financial departments and departments directly in charge of the state-owned enterprise would appraise and fix the liquidity plan of the enterprise, and in turn the enterprise would turn over all the depreciation funds and the majority of the profits to the central and local governments in accordance with the relationship of affiliation. In circulation of products, the state exercised “state monopoly of the purchase and marketing of enterprise products and raw materials” to implement unified management of distribution and pricing.
- 54.
See “Provisions of the State Council on Further Enlarging the Autonomy of the State-owned Industrial Enterprises,” promulgated on May 10, 1984.
- 55.
See Footnote 2
- 56.
See Lin (1995).
- 57.
Wu and Huang (2008b).
- 58.
See Li (2004).
- 59.
Szelényi et al. (2010).
- 60.
See Li and Jingdong (2005).
- 61.
See Zheng (2008, pp. 34–35).
- 62.
About the discussion on the “simulated market” in the planned socialist commodity economy, see Xu (1990), Luo and Jiang (1994).
- 63.
Li (2009).
- 64.
Yang and Ng (1995, pp. 107–128).
- 65.
Sachs et al. (2000).
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Qu, J., Fu, C., Wen, X. (2018). Changes in Labor Relations in the Dual-Track System Reform. In: Organizational Transition and Systematic Governance. Social Development Experiences in China. Springer, Singapore. https://doi.org/10.1007/978-981-10-7377-9_4
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