An Economic Analysis of the Rise and Decline of Chinese Township and Village Enterprises

Abstract

This book provides a historical economic analysis of two key issues relating to township and village enterprise (TVE) development in China. Firstly, the nature of the evolving relationship between TVEs and local government; in particular how TVE entrepreneurs have used institutionalized power to secure the political influence needed to defend their financial independence. Secondly, the relationship between TVEs and state-owned enterprises (SOEs), and the role of SOEs in China's economic transition. This study highlights the importance of the role of SOEs in the "dual-track pricing system" and its impact on other parts of the economy. Township and village enterprises were key to China's success in the late twentieth century, but have more or less disappeared as an entity over the past decade or so. By measuring the structural difference of the SOE sector before and after 1998-2003 SOE reform, Jin explains their fast catch-up in productivity since the mid-1990s, as well as the r elative decline of TVE productivity. Introduction -- TVEs : theories and methodology -- Township and village enterprises : history and institutions (1958-1997) -- Ownership structures of TVEs : TVE and local politics -- The fall and rise of state-owned enterprises (I) : the dual-track price system -- The fall and rise of state-owned enterprises (II) : the institutional root of the Chinese dual head economy -- TVE and the economic environment -- Conclusions.