Forging Reform in China: The Fate of State-Owned Industry

by Edward S. Steinfeld

• ISBN13: 9780521633352
• ISBN10: 0521633354
• Format: Hardcover
• Copyright: 1998-07-28
• Publisher: Cambridge University Press

Summary

The greatest economic challenge facing China in the post-Deng era is the reform of unprofitable, state-owned enterprises that have never truly been forced to face the pressure of a bottom line or the threat of bankruptcy. Forging Reform in China explains how and why well-intentioned, market-oriented reform measures have not been sweepingly successful to date, and what it would take to achieve meaningful reform. This book makes a compelling argument that private ownership cannot work in China's current system until governance over complex economic factors has been established, that is, until credit is tightened and market selection processes made to work.

Table of Contents

List of Tables and Figures	xi	(2)
Preface	xiii
1 Introduction: China's Ailing State Enterprises	1	(26)
The Terrain of Chinese Industrial Reform	10	(3)
The Role of SOEs in China's Contemporary Economy	13	(5)
The Performance of the State Sector	18	(4)
The Search for Explanations	22	(5)
Part I Conceptual Approaches to Postsocialist Enterprise Reform	27	(54)
2 Property Rights, Privatization, and the State-Owned Firm	27	(18)
Property Rights: Theoretical Underpinnings	28	(5)
Theory Meets Practice: Privatization Efforts in Transitional Economies	33	(5)
Theory Revisited: What's Wrong with the Property-Rights Approach?	38	(6)
Conclusion	44	(1)
3 The Nested Problems Dynamic: An Alternative Approach	45	(36)
Nested Problems and Feedback Loops	45	(3)
From Plan to Market: The Changing Nature of Autonomy and Constraint	48	(9)
Controlling the Controllers: The State Intervention Side of the Nested Problems	57	(6)
Barriers to Effective Enterprise Governance in Transitional Systems	63	(10)
The Dynamic in Operation	73	(8)
Part II Enterprise Case Studies: The Commanding Heights in Transition	81	(146)
4 The Living Museum of Iron and Steel Technology	81	(43)
The Financial Performance of Anshan Iron and Steel	84	(6)
Governmental Decentralization and Angang	90	(16)
Market-Oriented Reforms and Nonmarket Behavior	106	(12)
Managerial Incentives and the Profit Motive	118	(3)
Conclusion	121	(3)
5 King of the Red Chips: Ma'anshan Steel and the Debacle of the "Public" SOE in China	124	(41)
Introduction: Magang Goes Public	124	(8)
The Evolution of Stock Measures: Reform in Theory	132	(5)
Magang under Contract: The Prestock Years	137	(6)
Magang under Joint Stock Ownership: Reform in Practice	143	(10)
Problems Realized: Magang's Joint Stock System in Operation	153	(5)
Conclusion	158	(7)
6 Shougang: The Rise and Fall of an Industrial Giant	165	(62)
Introduction	165	(5)
Shougang: An Overview	170	(5)
The Profit Contract	175	(24)
Enterprise Strategy under the Contract	199	(7)
Shougang's 1995 Collapse	206	(13)
The Broader Lessons of the Shougang Experience	219	(8)
Part III Reassessing Chinese Patterns of Economic Development	227	(34)
7 Extending the Argument: Budget Constraints and Patterns of Growth in China	227	(22)
Traditional Approaches to Chinese Reform	227	(6)
Extending the Argument: The Factual Terrain of Chinese Reform	233	(2)
Local State Corporatism: A Rights-Based Approach to TVE Growth	235	(2)
The Constraints-Based Response	237	(4)
Why Does the Distinction Matter?	241	(6)
Summary	247	(2)
8 Conclusion	249	(12)
The Constraints-Based Approach	249	(6)
The Constraints-Based Approach and Neoclassical Notions of the State	255	(3)
SOE Restructuring and Images of China	258	(3)
Notes	261	(26)
Bibliography	287	(8)
Index	295