(Re)interpreting Chinese Enterprise Reform

Abstract

This chapter seeks to interpret China’s economic reform over the period of 1978–94 in a way that differs significantly from the orthodox emphasis on marketization and privatization. Succinctly, my central thesis is that the observed good performance of Chinese industrial enterprises of all ownership types should be seen as the outcome of the combination of improved micro-level efficiency and favourable macro-level and development conditions. As far as micro-level efficiency is concerned, the improvement, in turn, has been accounted for by an appropriate combination of the market and non-market institutions. Throughout, the argument is based on a wealth of empirical evidence that appears to be contradicting the orthodox accounts, but being consistent with the late industrialization literature which I draw upon.