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Chinese industrial firms under reform (English)

State-owned industrial enterprises in China underwent far-reaching changes during the 1980s. Reforms altered the operating environment, financial arrangements, business and administrative relationships, and internal structure and motivation of firms. This book, a compilation of detailed case studies, analyzes how reforms and other changes in the economic system affected the behavior and performance of enterprises. The authors develop the following themes that emerge from the case studies: (a) how changing market conditions influence the actions of enterprises; (b) how directive planning by government agencies hinders the reform process; (c) how enterprise objectives are molded by the strong emphasis on worker's interests in the urban state-owned economy; (d) how reforms affect the constraints faced by firms in pursuing their objectives, often leading to unanticipated consequences; (e) how lack of financial discipline weakens incentives and undermines reforms; and (f) how the fragmented, overlapping, and confusing system of bureaucratic supervision inhibits business decision-making. The case studies illustrate that continuing government administrative control over enterprises brings with it fundamental problems and that partial reform can induce distortions.

Details

  • Author

    Byrd, William A. [editor]

  • Document Date

    1992/02/29

  • Document Type

    Publication

  • Report Number

    10557

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    China,

  • Region

    East Asia and Pacific,

  • Disclosure Date

    2010/07/01

  • Doc Name

    Chinese industrial firms under reform

  • Keywords

    Gross Value of Industrial Output;state enterprises;allocation of factors of production;total value of output;township and village enterprise;contractual responsibility;state industrial sector;industrial good;Industrial Goods;case study method;total wage bill;share of output;direct foreign investment;industrial growth rate;economic responsibility system;international economic relation;forms of ownership;small state enterprises;forms of energy;international experiences show;public finance system;state enterprise reform;absence from work;flow of labor;ownership of state;soft budget constraint;tax at rate;radical reform;number of workers;local public service;allocation of labor;allocation of resource;standard of living;lifetime employment system;rural labor market;form of decentralization;loan repayment schedule;payment of tax;iron rice bowl;threat of bankruptcy;nonferrous metal industry;flow of capital;state industrial enterprise;types of firms;terms of performance;event of failure;investment fund;delivery of good;incentives for enterprise;average exchange rate;machinery and equipment;share of state;tax system;industrial producer;fixed asset;financial discipline;private enterprise;state industry;Fixed Assets;market price;profit retention;market condition;consumer good;consumer goods;state sector;financial incentive;supervisory agency;work force;financial reform;ownership structure;inflationary pressure;market mechanism;price system;foreign exchange;retention rates;personal asset;Bank Credit;directive planning;ratchet effect;industrial economy;excess supply;living standard;consumer durable;constant price;industrial administration;price control;political change;regular worker;total output;market competition;investment financing;profit remittance;financial account;direct marketing;machine tool;administrative allocation;average worker;economic reform;rural area;basic package;short period;regional variation;urban neighborhood;reform strategy;urban community;municipal government;administrative apparatus;government planning;improved resource;intensive growth;extensive growth;quantitative performance;important change;pricing system;administrative practice;industrial market;business decision;supervisory apparatus;private industry;market environment;government bureaucracy;goods market;industrial structure;foreign capital;size distribution;partial ownership;market development;industrial planning;labor system;government leadership;Austerity policies;local control;exchange arrangement;reform package;depreciation allowance;macroeconomic crisis;paid worker;subsidized housing;macroeconomic framework;industrial efficiency;lending decision;financial capital;finding employment;fiscal deficit;budgetary fund;credit expansion;credit growth;municipal organization;managerial incentive;legal contract;corporate management;wholesale privatization;share ownership;stock ownership;enterprise institute;investment finance;administrative hierarchy;lease period;social burden;Food Services;government budgetary;extensive use;enterprise control;generating capacity;fuel oil;heavy oil;advanced technology;foreign trade;Medical care;international economy;market-oriented reforms;domestic production;labor discipline;vested interests;pig iron;subsequent years;international standard;frequent postponement;loan financing;effective sanction;Bankruptcy Law;contract renewal;limited resources;reform measure;adjustment policy;bankruptcy procedure;sulfuric acid;incentive effect;government revenue;profit tax;uniform rate;price distortion;medium-size enterprise;tax rate;Public Facilities;social responsibility;systemic feature;fundamental problem;aggregate statistic;quantitative data;retrieval system;enterprise survey;supervisory authority;graduate school;primary data;individual study;administrative directive;information base;government supervision;government body;scarcity value;labor allocation;important component;Technology Transfer;technological modernization;financial arrangement

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Citation

Byrd, William A. [editor]

Chinese industrial firms under reform (English). Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/435431468771837438/Chinese-industrial-firms-under-reform