Ownership Restructuring in Chinese State Industry: An Analysis of Evidence on Initial Organizational Changes

Abstract

China has now entered the third decade of its economic reform. While the sweeping decollectivization in the rural sector during the early 1980s is widely regarded as successful, reform in the urban sector has proceeded at a much slower pace and with mixed results.For overviews, see Barry Naughton, Growing Out of the Plan: Chinese Economic Reform, 1978–1993 (New York: Cambridge University Press, 1995); Dwight H. Perkins, “Reforming China's economic system,” Journal of Economic Literature, Vol. 26 (1988), pp. 601–645, and “Completing China's move to the market,” Journal of Economic Perspectives, Vol. 8 (1994), pp. 23–46. The main carriers of economic activities in the urban sector are state-owned enterprises (SOEs). Since 1993, the Chinese government has embarked on a major effort to shift the focus of SOE reform from delegation of decision-making authority to enterprises, which was the predominant strategy in the preceding decade, to ownership restructuring.