State-Owned Enterprise Reform and Smooth Institutional Transition in China -- A Three-Stage Economic Reform Method
This paper addresses the methods of state-owned enterprises’ ownership reform and the smooth institutional transition of the economic system in China. By using the theory of endogenous ownership arrangements developed in Tian (1995), a three stage method of China’s economic reform will be given. We show that a smooth institutional transition to a market economy needs to go through three stages: (1) economic liberalization; (2) marketization; and (3) privatization. In the first stage, the entry and competition of enterprises of all kinds of ownership make the non-state owned sector of the economy develop quickly. In the second stage, competition among enterprises of all kinds of ownership and the introduction and development of the market system lead to reduction of state-owned enterprises. In the third stage, state-owned enterprises will face large scale bankruptcy and privatization. The first stage began with rural economic reform in China in 1979. The second stage began in 1992. The third stage has not begun and should not be expected too soon. It is preferable to wait about 5-10 years until the non-state owned economy has become a large proportion of the economy, say above 80% of GNP, and the social security network is almost completed.
|Date of creation:||1996|
|Publication status:||Published in The Reformability of China's State Sector (1996): pp. 220-240|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Hussain, Athar, 1994. "Social Security in Present-Day China and Its Reform," American Economic Review, American Economic Association, vol. 84(2), pages 276-280, May.
- Gary H. Jefferson & Thomas G. Rawski, 1994. "Enterprise Reform in Chinese Industry," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 47-70, Spring.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:41213. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If references are entirely missing, you can add them using this form.