Evolution of Urban Collective Enterprises in China

Abstract

China's economy has been undergoing major changes since 1979 that are beginning to affect both the structure and performance of her economic system. Although the changes have been carried out largely on an exploratory and experimental basis, they promise to infuse greater management flexibility into some units of production. China's economic system has been greatly influenced both by excessive administrative control that has tended to slow down the processes of decision-making and production adjustment, and by ideological mandates that predetermined the forms and functions of the national economic system. The new economic order being shaped was formally sanctioned by the third plenary session of the eleventh central committee of the Communist Party of China held in Beijing between 18 and 22 December 1978, which called for the adoption of a series of major new economic measures to relax the central government's tight grip on production units. Such tight control has left most, if not all, production enterprises with little management authority and has to a large extent hindered the performance of the economy as a whole.