The gradual encroachment of an idea: Large enterprise groups in China

Abstract

This article illuminates the ideational foundations of China's 'large enterprise strategy', an early experiment in China's efforts to employ industrial policy to cultivate a group of state-controlled business groups. Based on archival research, the author argues that Chinese policymakers believed the development of state-owned large enterprises would bring several kinds of benefits, both economic and political. Drawing eclectically from Marxian economics and the history of capitalist development in East Asia, they argued that large enterprises could serve as both engines of domestic development and as safeguards and vanguards in the context of China's re-entry to the global marketplace. These enterprise groups were also seen as key elements in a market-conforming model of state control that senior officials began to envision and plan for as early as the late 1980s. The archival documents also shed light on internal debate in the 1980s and 1990s about the pros and cons of promoting monopolies, the substance of which anticipates much of the current heated discussion about China's 'monopoly industries' (longduan hangye).