Abstract
In the history of China’s economic and rural development, the rise and fall of the collective township and village enterprises are extremely perplexing.
Township and village enterprises mainly comprise township (town) collective enterprises, village collective enterprises and private enterprises (simplified as “TVPS” in the academic world, which is the abbreviation of “township, village and private enterprises”). Some researchers indicate that the Chinese TVPSs have the following characteristics: dynamism, competitiveness, small scale, diversity, outward orientation, community orientation and factor immobility (Byrd and Lin 1990). In the analysis of this chapter, we will confine the township and village enterprises within the collective domain, so as to distinguish them from private enterprises. If not specifically pointed out, in the subsequent analysis, the township and village enterprises are equivalent to the collective enterprises based in townships and villages.
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Notes
- 1.
On March 1, 1984, the CPC Central Committee and the State Council of China agreed and distributed the Report of How to Create New Situations of Commune and Brigade Enterprises delivered by the Ministry of Agriculture and decided to rename the “commune and brigade enterprises” as the “township and village enterprises”. See Wu (2010, p. 1621).
- 2.
On March 31, 1994, the Ministry of Agriculture of China promulgated the Opinion on the Reform of Property Rights of Township and Village Enterprises (1995, Yearbook of China’s Township and Village Enterprises (1995), Beijing: China Agriculture Press, pp. 65–67.).
- 3.
China Statistical Yearbook (1994), Beijing: China Statistics Press, 1994, pp. 373–375.
- 4.
Yearbook of China’s Township and Village Enterprises (2001), Beijing: China Agriculture Press, 2001, p. 6.
- 5.
Xiong (2010).
- 6.
Fei (2000).
- 7.
Pan (2003a, pp. 72, 75, 376).
- 8.
Oi (1995).
- 9.
Zhao (2012).
- 10.
According to Pan Wei, if a county government is regarded as a “local state”, there are about 2000 local states in China; if a township is regarded as a “local state”, there are nearly 50,000 local states; if a village is regarded as a “local state”, there are over 800,000 local states. Compared with the county government, townships and villages are independent community entities. The county government acts often as protector and predator of township enterprises (Wei 2003a, p. 16).
- 11.
Walder (1995).
- 12.
Tan (2003).
- 13.
Cai (1995).
- 14.
Zhou (2000).
- 15.
Wang (2000).
- 16.
Li (1995).
- 17.
Nee (1992).
- 18.
Zhou (2005).
- 19.
Zhou
- 20.
Zhe and Chen (2005).
- 21.
Cao (2013).
- 22.
Zhou (2005).
- 23.
Zhe and Chen (2005).
- 24.
- 25.
Zhou (2006).
- 26.
Qu et al. (2009).
- 27.
According to Panwei, the occupancy of the working capital of township and village enterprises by state-owned enterprises emerged in the late 1980s, especially at the time of macroeconomic depression. Since 1994, their payment in arrears kept at a higher level. The account receivables were virtually about half of TVEs’ working capital. The closer connections they had with state-owned enterprises, the situations were more serious (Pan 2003a, pp. 329–330).
- 28.
Zhi (2001).
- 29.
Xia and Wang (2005).
- 30.
Qiu (1999).
- 31.
Xiong (2010).
- 32.
Merton (1968, pp. 130–131).
- 33.
Merton (1936, p. 130).
- 34.
Giddens (1998, pp. 73–74).
- 35.
Giddens (1998, pp. 74–75).
- 36.
Liu and Yang (2008).
- 37.
Merton (1968, p. 130).
- 38.
Mann (2007, pp. 24–25).
- 39.
Mann (2007, pp. 19–25).
- 40.
Mann (1986).
- 41.
Li et al. (1996).
- 42.
Xiong (2009).
- 43.
Meyer and Rowan (1977).
- 44.
Qian, Yingyi and Chenggang Xu, “Why China’s economic reforms differ: the M-form hierarchy and entry/expansion of the non-state sector”, in Zhang Jun and Zhou Li’an (eds.), 2008, Compete for Growth, Shanghai: Shanghai People’s Publishing House.
- 45.
Xiong (2010).
- 46.
- 47.
Zhang (1990, p. 22).
- 48.
- 49.
The “First Five-Year Plan” (1953–1957) was formulated based on the general line and overall task of the Party during the transitional period with the aid of the Soviet Union experts (concentrating efforts on the development of the heavy industry by 694 large and medium-sized industrial projects, including 156 core projects, so as to lay solid foundations for the preliminary industrialization and subsequent industrial development), and thus inevitably sharing similarities with the social and economic system of Soviet Union. Its planned goal was mainly to achieve the socialist industrialization, and the strategic steps had been put forward, comprising the progressive realization of the country’s industrialization, as well as the socialist transformation of the agriculture, handicraft industries and capitalist industries and commerce.
- 50.
Qian, Yingyi and Barry R. Weingast, “Beyond Decentralization: Market-Preserving Federalism with Chinese Characteristics”, in Zhang Jun and Zhou Li’an (eds.), 2008, Compete for Growth, Shanghai: Truth & Wisdom Press, p. 25.
- 51.
Bo (2008, pp. 478–486).
- 52.
Ibid., p. 498.
- 53.
Party History Research Center of the CPC Central Committee, 2011, History of the Communist Party of China (1949–1978) (Volume II), Beijing: The Chinese Communist Party History Publishing House, p. 490.
- 54.
Bo (2008, pp. 511–512).
- 55.
Zhang (1990, p. 13–14).
- 56.
The “large and public” people’s communes were characterized by “free requisition” and “shared properties” either. “When necessary, a people’s commune could requisition any piece of land within its administrative region, without any specified formality or even formally recorded documents … In December 1958, since the inception of the commune, several hectares of land were appropriated from L Production Brigade to construct a so-called “Qiantang River University”. In October 1959, the commune allocated tens of hectares of land for setting up Qiantang River Commune Silkworm Breeding Plant … The animal farm, steel mill, ramie factory, grass woven factory, farm tool factory, brick and tile factory and salt fertilizer factory established by the commune also occupied a lot of land.” “Properties of peasants within the commune were requisitioned by a variety of means. Of course, the civilized collection was the most high-sounding. In 1959, the commune obtained the public welfare fund of 9,742 yuan from L Production Brigade, which plus the agricultural tax of 13,162.43 yuan was equal to 22,904.43 yuan, accounting for 13% of its total income and 26% of net income. But this was only part of shared properties. The commune also required the brigade to deliver 20,000 kg feed grains to meet the need of the animal farm. The brigade was unbearable and finally delivered only 14,000 kg. Besides the aforesaid money and grains, the commune could requisition the properties of peasants or brigade from time to time or took away cheap materials allocated by the state to peasants, for the need that they needed them … Another important aspect of the commune power was that it could use the labor force of natural villages at any time or even free of charge.” (Zhang 2005, pp. 57–59).
- 57.
Zhang (1990. p. 14).
- 58.
Ma et al. (1991, p. 37).
- 59.
Wang et al. (1988).
- 60.
Zhang and Zhang (2001).
- 61.
On January 3, 1961, one of the four drawbacks mentioned by Li Fuchun in the report was too much decentralization of power (Bo 2008, p. 627).
- 62.
“Revolutionary education regime” means the state has a strong sense of mission to the social transformation and sees the extraordinary endowment of the state conforming to the social transformation needs as the basis for the legitimacy of the regime (Feng 2011).
- 63.
Sun (1994).
- 64.
Except some major and special and “experimental field” enterprises being still under the central management, other enterprises were in principle decentralized to local governments. 885 in 1165 enterprises directly managed by the central government were decentralized (Zhou 2008, p. 282).
- 65.
Zhang (2005, pp. 50–51).
- 66.
According to the study of Justin Yifu Lin, during the “Three Years of Great Chinese Famine”, the estimated number of famine victims reached 30 million. Through constructing a game model, he demonstrated that the repeated game relying on individual self-restraints for which the rural collectivization became successful was replaced by the one-shot game, thus the self-compliant contract form underwent changes, such as demotivation of commune members. It was difficult to sustain the agricultural collective production pattern and eventually a large-scale collapse of grain production occurred (Lin 1990).
- 67.
Bo (2008, pp. 661–662).
- 68.
Adjustment of commune enterprises comprise the following measures: first, to confirm that commune enterprises are the hope of achieving the agricultural mechanization; second, the State Council set up the People’s Commune Industry Administration to strengthen the leadership of commune enterprises; third, to invest 1 billion yuan each year in support of commune enterprises; fourth, to determine that providing services for the agriculture, industry, life and exports is the guideline for the development of commune enterprises; fifth, to specify the business scope of commune run industrial sector; sixth, to weigh their own abilities and act accordingly; seventh, commune enterprises must streamline the workforce and adhere to the principles of joint running of industry and agriculture, being more in the slack season of farming, less in the busy season and stopped during very busy days, farming in the busy season and work in the leisure season; eighth, to refund and eradicate the free requisition; ninth, to perfect the management system of commune enterprises; tenth, to emphasize the liquidation of “old accounts”; and eleventh, to focus on the economic accounting of commune enterprises (Zhang 1990, pp. 14–15).
- 69.
Zhang (1990, pp. 16–17).
- 70.
Luo (1990).
- 71.
Zhou (2008, pp. 279–280).
- 72.
Zhang (2005, p. 127).
- 73.
Zhang (1990, pp. 18).
- 74.
Pan (2003a, p. 308).
- 75.
In 1961, Mao Zedong wrote the poem Reply to Comrade Guo Moruo, in which the two sentences are “The deluded monk was not beyond the light, but the malignant demon must wreak havoc.”.
- 76.
Wu (2010, p. 519).
- 77.
Zhao and Hall (1994).
- 78.
Wu (2010, p. 534).
- 79.
Pan (2003a, p. 80.).
- 80.
In order to implement the goal of agricultural mechanization, the central government proposed the following measures: first, good management of gradually increasing large and small enterprises of communes and brigades can play a greater role in the socialist construction; second, the repair network should be built at the three levels, county, township and brigade, so as to achieve the goal of heavy repair at the county level, medium repair at the commune level and minor repair at the brigade level; third, to develop the local “five small industrial sectors” with iron and steel as raw materials; and fourthly, each year the state will subsidize people’s communes with the fund of about 1 billion yuan for agricultural mechanization.
- 81.
Compared with that in 1958, the decentralization in the 1970s is regarded as the “second round” by the central government.
- 82.
- 83.
- 84.
Here, the contradiction between the rural labor surplus and the shortage of labor in the opinion of the government is an emphasis on the different aspects of the same problem. The labor surplus refers to the relationship between the labor force and the grain output. When the grain production and the required labor are established, the surplus population becomes surplus labor force. But the labor shortage observed by the government is mainly related to the low working efficiency and demotivation of people. As pointed out by Perkins and Yusuf, inefficient rural construction projects can always absorb more labor force, weeds in the cropland can always be pulled and pulled, and there is always a need for more people to carry water to irrigate the land (cited from Pan 2003a, p. 79).
- 85.
- 86.
- 87.
Qu et al. (2009).
- 88.
Zhou (2008, p. 281).
- 89.
- 90.
In October 1983, the CPC Central Committee and the State Council issued the Notice on the Establishment of Township Government by Separating Government and Commune. At the end of October 1983, 9028 people’s communes in 902 counties (cities and districts) in the whole country had separated the government from the commune. In total 12,786 township people’s government was constructed, including all over 176 counties (cities or districts) (Zhao 2010, pp. 24–25).
- 91.
Please refer to the statistics of data in relevant years in the Yearbook of China’s Township and Village Enterprises.
- 92.
The most critical policies was the Regulations on Several Issues concerning the Development of Commune and Brigade Enterprises promulgated by the State Council on July 3, 1979, the Several Regulations of the State Council on Implementing the National Economic Adjustment Guidelines by Commune and Brigade Enterprises promulgated on May 4, 1981, the Survey Report on Implementing the Operation Contract Responsibility System by Commune and Brigade Enterprises of the Commune and Brigade Administration distributed by the Ministry of Agriculture, Animal Husbandry and Fishery in May 1982, and the Report on Adjustment and Reform, Improving Efficiency and Creating New Development Pattern of Commune and Brigade Enterprises of Ministry of Agriculture, Animal Husbandry and Fishery distributed by the Central Committee of CPC and the State Council and so on.
- 93.
It is generally believed that the agricultural production management mode of the “production contract to household” recognized by the institution began in Xiaogang Village, Fengyang County, Anhui Province. In fact, the attempt of peasants to resist cooperatives had never stopped. “In over 20 years of cooperatives, resistance occurred against the operation modes created by peasants, including production contract to villager’s groups or to household and work contract to household. There were three times in large scale, before the anti-rightist movement in 1957, before the struggle against right deviations in 1959 and before the 10th Plenary Session of the 8th Central Committee, all of which were suppressed by political movements” (Party History Research Center of the CPC Central Committee, 2011, History of the Communist Party of China (1949–1978) (Volume II), Beijing: The Chinese Communist Party History Publishing House, p. 1036.).
- 94.
Gao (2009).
- 95.
- 96.
Pan (2003b).
- 97.
- 98.
- 99.
- 100.
Walder (1995).
- 101.
Zhang and Zhang (2001).
- 102.
Zhou (2008, pp. 284–285).
- 103.
Ibid., pp. 284–287.
- 104.
Qu et al. (2009).
- 105.
Lin et al. (2012).
- 106.
1995, “Opinions on the Reform of Property Rights System of Township and Village Enterprises” in Yearbook of China’s Township and Village Enterprises (1995), Beijing: China Agricultural Press, pp. 65–67.
- 107.
Li (1995).
- 108.
Based on the statistics of the Yearbook of China’s Township and Village Enterprises, Pan Wei indicated that the degree of losses of rural collective enterprises was not higher than that of private enterprises. Using the year 1995 as the observation point, 980,000 township and village enterprises suffered from losses, 900,000 of which were private enterprises. The total losses were 47.8 billion yuan, including 16.8 billion yuan suffered by collective enterprises and 31.0 billion yuan suffered by private enterprises. The added value of collective enterprises was twice that of private enterprises, but their losses were only half of private enterprises. Since 1996, the Yearbook of China’s Township and Village Enterprises uses the number of profitable enterprises and the profit-making percentage to replace the number of enterprises suffering losses and the loss-making percentage, respectively. From 1996 to 2001, the profit-making percentage of collective enterprises is more than 90% (Pan 2003a, pp. 336–339).
- 109.
Lin et al. (1998).
- 110.
“Once at a meeting hosted by leaders of the former Economic and Trade Commission of the PRC with the attendees being executives of super large state-owned enterprises, a considerable number of attendees imputed the plight of state-owned enterprises to competitions from township and village enterprises and accused that the previous reform “shackled tigers but released monkeys” (Zhou 2008, p. 286).
- 111.
Zhe (2000).
- 112.
Zhe and Chen (2005).
- 113.
Qu et al. (2009); the calculation results of the two proportions by Zhou Feizhou in another article are slightly different from the values above, one proportion is 31.6% in 1993 and the other proportion is 12.6% in 1993 (Zhou 2006); our calculation results are 22% for the first proportion in 1993 and 12.3% for the other proportion.
- 114.
- 115.
1990, Yearbook of China’s Township and Village Enterprises (1990), Beijing: China Agriculture Press, pp. 201–202.
- 116.
Pan (2003a, pp. 329–330).
- 117.
Chen (2002).
- 118.
Zhao (2010, pp. 108–110).
- 119.
Zhou (2006).
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Wei, Q., Li, H. (2019). The Government and Rural Collective Enterprises. In: Entities and Structures in the Embedding Process. Social Development Experiences in China. Springer, Singapore. https://doi.org/10.1007/978-981-13-2390-4_4
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