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'Letting Go of the Small': An Analysis of the Privatisation of Rural Enterprises in Jiangsu and Shandong

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  • Samuel Ho
  • Paul Bowles
  • Xiaoyuan Dong

Abstract

Since the policy of "grasping the large, letting go of the small" was initiated in 1996, there has been a program of mass privatisation of China's rural industrial enterprises. This paper, based on interviews and survey data from three counties in Jiangsu and Shandong, analyses the process of privatisation and examines its impacts. Our analysis, which incorporates both choice theoretic and power theoretic considerations, shows how rapid privatisation was driven by the desire to prevent further asset stripping, how 'efficiency' objectives were seen as requiring majority share ownership by enterprise managers, and how the privatisation process better served the interests of some agents (most notably, township governments and enterpise managers) than others (most notably, workers).

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Journal of Development Studies.

Volume (Year): 39 (2003)
Issue (Month): 4 ()
Pages: 1-26

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Handle: RePEc:taf:jdevst:v:39:y:2003:i:4:p:1-26

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Related research

Keywords: privatisation; rural China; township and village enterprises; rural industry; transition economies;

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Cited by:
  1. Dong, Xiao-Yuan, 2005. "Wage inequality and between-firm wage dispersion in the 1990s: A comparison of rural and urban enterprises in China," Journal of Comparative Economics, Elsevier, vol. 33(4), pages 664-687, December.
  2. Guariglia, Alessandra & Liu, Xiaoxuan & Song, Lina, 2008. "Internal Finance and Growth: Microeconometric Evidence on Chinese Firms," IZA Discussion Papers 3808, Institute for the Study of Labor (IZA).
  3. Dong, Xiao-yuan & Putterman, Louis & Unel, Bulent, 2006. "Privatization and firm performance: A comparison between rural and urban enterprises in China," Journal of Comparative Economics, Elsevier, vol. 34(3), pages 608-633, September.
  4. Pandey, Manish & Dong, Xiao-yuan, 2009. "Manufacturing productivity in China and India: The role of institutional changes," China Economic Review, Elsevier, vol. 20(4), pages 754-766, December.
  5. Hovey, Martin & Naughton, Tony, 2007. "A survey of enterprise reforms in China: The way forward," Economic Systems, Elsevier, vol. 31(2), pages 138-156, June.
  6. Xiao-yuan Dong & Louis Putterman & Bulent Unel, 2004. "Enterprise Restructuring and Firm Performance: A Comparison of Rural and Urban Enterprises in Jiangsu Province," William Davidson Institute Working Papers Series 2004-668, William Davidson Institute at the University of Michigan.
  7. Ito, Junichi, 2006. "Economic and institutional reform packages and their impact on productivity: A case study of Chinese township and village enterprises," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 167-190, March.

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