Skip to main content

Capitalist Firms, Public Enterprises: Ownership Reform and Privatization of Chinese State-owned Enterprises

  • Chapter
Book cover The Chinese Economy under Transition

Part of the book series: Studies on the Chinese Economy ((STCE))

Abstract

Privatization has been a policy programme designed, as it was often put in Britain by Conservative Party politicians, to ‘roll back the frontiers of the state’. It has characterized government policies in much of the 1980s and early 1990s from the developed to developing, and from the Western mixed to formerly socialist economies. The issue has also figured prominently in debates on Chinese economic reforms, and many are convinced that this is a dose of medicine the Chinese economy simply has to take.1

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Chapter
USD 29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD 84.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Hardcover Book
USD 109.99
Price excludes VAT (USA)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Bibliography

  • Aoki, M. (1990) ‘Toward an Economic Model of the Japanese Firm’, Journal of Economic Literature, 28, pp. 1–27.

    Google Scholar 

  • Aylen, J. (1987) ‘Privatization in Developing Countries’, Lloyds Bank Review, January, pp. 15–30.

    Google Scholar 

  • Ayub, M. A. and S. O. Hegstad (1987) ‘Management of Public Industrial Enterprises’, World Bank Research Observer, 2, pp. 79–101.

    Article  Google Scholar 

  • Bardhan, P. and J. E. Roemer (1992) ‘Market Socialism: A Case for Rejuvenation’, Journal of Economic Perspectives, 6(3), pp. 101–16.

    Article  Google Scholar 

  • Beijing Review (1997) 3–9 March, 9–15 June, 11–17 August.

    Google Scholar 

  • Berle, A. A. and C. C. Means (1933) The Modern Corporation and Private Property (New York: Macmillan).

    Google Scholar 

  • Bienen, H. and J. Waterbury (1989) ‘The Political Economy of Privatization in Developing Countries’, World Development, 17(5), pp. 617–32.

    Article  Google Scholar 

  • Boardman, A. E. and A. R. Vining (1989) ‘Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-owned Enterprises’, Journal of Law and Economics, 32, pp. 1–33.

    Article  Google Scholar 

  • Brett, E. A. (1988) ‘State, Markets and Private Power: Problems and Possibilities’, in P. Cook and C. Kirkpatrick (eds), Privatization in Less Developed Countries (London: Harvester Wheatsheaf).

    Google Scholar 

  • Brooks, J. (1995) ‘China’s Stock Markets’, in K. Cao (ed.), The Changing Capital Markets of East Asia (London: Routledge).

    Google Scholar 

  • Chen, K., G. H. Jefferson and A. Singh (1992) ‘Lessons from China’s Economic Reform’, Journal of Comparative Economics, 16, pp. 201–25.

    Article  Google Scholar 

  • Coase, R. H. (1960) ‘The Problems of Social Cost’, Journal of Law and Economics, 3, pp. 1–31.

    Article  Google Scholar 

  • Cosh, A. D. and A. Hughes (1987) ‘The Anatomy of Corporate Control: Directors, Shareholders and Executive Remuneration in Giant US and UK Corporations’, Cambridge Journal of Economics, 11, pp. 285–313.

    Google Scholar 

  • Cosh, A. D., A. Hughes and I. Singh (1990) ‘Take-overs and Short-termism: Analytical and Policy Issues in the UK Economy’, in Take-overs and Short-termism in the UK, Industrial Policy Paper 3 (London: Institute of Public Policy Research).

    Google Scholar 

  • Crozier, M., S. P. Huntington, and J. Watanuki (1975) The Crisis of Democracy (New York: New York University Press).

    Google Scholar 

  • Demsetz, H. (1968), ‘Why Regulate Utilities?’, Journal of Law and Economics, 11, pp. 55–66.

    Article  Google Scholar 

  • Demsetz, H. and K. Lehn (1985) ‘The Structure of Corporate Ownership: Causes and Consequences’, Journal of Political Economy, 93(6), pp. 1155–77.

    Article  Google Scholar 

  • Franks, J. and C. Mayer (1990) ‘Capital Markets and Corporate Control: A Study of France, Germany and the UK’, Economic Policy, April, pp. 191–231.

    Google Scholar 

  • Grifin, J. M. and S. N. Wiggins (1992) ‘Take-overs: Managerial Incompetence or Managerial Shirking?’, Economic Inquiry, 30, pp. 355–70.

    Article  Google Scholar 

  • Grossman, S. J. and O. D. Hart (1980) ‘Take-over Bids, the Free-rider Problem, and the Theory of the Corporation’, Bell Journal of Economics, 11(1), pp. 42–64.

    Article  Google Scholar 

  • Groves, T., Y. Hong, J. McMillan, and B. Naughton (1994) ‘Autonomy and Incentives in Chinese State Enterprises’, Quarterly Journal of Economics, February, pp. 183–209.

    Google Scholar 

  • Hart, O. D. (1983) ‘The Market Mechanism as an Incentive Scheme’, Bell Journal of Economics, 14, pp. 366–82.

    Article  Google Scholar 

  • Hay, D., D. Morris, G. Liu, and S. Yao (1994) Economic Reform and State-owned Enterprises in China, 1979–1987 (Oxford: Clarendon).

    Google Scholar 

  • Hermalin, B. E. (1992) ‘The Effects of Competition on Executive Behaviour’, Rand Journal of Economics, 23(3), pp. 350–65.

    Article  Google Scholar 

  • Hu, Zuliu (1997) ‘Social Protection and Enterprise Reform: The Case of China’, in M. Rein, B. L. Friedman, and A. Worgotter (eds), Enterprise and Social Benefits after Communism (Cambridge: Cambridge University Press).

    Google Scholar 

  • Hussain, A. and J. Zhuang (1996) ‘Pattern and Causes of Loss-making in Chinese State Enterprises’, Development Economics Research Discussion Paper Series, CP 31, STICHERD (London School of Economics).

    Google Scholar 

  • Jarrell, G. A., J. A. Brickley and J. M. Netter (1988) ‘The Market for Corporate Control: The Evidence Since 1980’, Journal of Economic Perspectives, 2(1), pp. 49–63.

    Article  Google Scholar 

  • Jefferson, G. H. and W. Xu (1991) ‘The Impact of Reform on Socialist Enterprises in Transition: Structure, Conduct, and Performance in Chinese Industries’, Journal of Comparative Economics, 15, pp. 45–64.

    Article  Google Scholar 

  • Jefferson, G. H., G. T. Rawski and Y. Zheng (1992) ‘Growth, Efficiency, and Convergence in China’s State and Collective Industry’, Economic Development and Cultural Change, 40(2), pp. 239–66.

    Article  Google Scholar 

  • Jefferson, G. H., G. T. Rawski and Y. Zheng (1996) ‘Chinese Industrial Productivity: Trends, Measurement Issues, and Recent Developments’, Journal of Comparative Economics, 23, pp. 146–80.

    Article  Google Scholar 

  • Jensen, M. C. (1986) ‘Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers’, American Economic Review, 76(2), pp. 323–29.

    Google Scholar 

  • Jensen, M. C. (1992) ‘Market for Corporate Control’, in (ed.), New Palgrave Dictionary of Money and Finance, 2, (London: Macmillan), pp. 657–66.

    Google Scholar 

  • Jensen, M. C. (1993) ‘The Modern Industrial Revolution, Exit, and the Failure of Internal Control Systems’, Journal of Finance, 48(3), pp. 831–80.

    Article  Google Scholar 

  • Journal of Comparative Economics (1993) Symposium on ‘The Structure and Behaviour of Economic Organizations: Theoretical and Empirical Perspectives’, 17(2).

    Google Scholar 

  • Journal of Economic Perspectives (1991) symposium on ‘Organizations and Economics’, 5(2).

    Google Scholar 

  • Journal of Law and Economics (1983) symposium on ‘Corporations and Private Property’, 26(2).

    Google Scholar 

  • Karmel, S. M. (1994), ‘Emerging Security Markets in China: Capitalism with Chinese Characteristics’, China Quarterly, 140: 1105–1120.

    Article  Google Scholar 

  • Kay, J. A. and D. J. Thompson (1986) ‘Privatization: A Policy in Search of a Rationale’, Economic Journal, 96, pp. 18–32.

    Article  Google Scholar 

  • Kornai, J. (1986) ‘The Soft Budget Constraint’, Kyklos, 39, pp. 3–30.

    Article  Google Scholar 

  • Kornai, J. (1993) ‘The Evolution of Financial Discipline under the Postsocialist System’, Kyklos, 46, pp. 315–36.

    Article  Google Scholar 

  • Lee, C. J. (1993) ‘An Assessment of Taiwan’s Privatization of Public Enterprises and Development of Small and Medium Enterprises’, paper presented at the Seminar on the Reform of State-owned Enterprises: Privatization and Experiences of Asian Countries (Vietnam) (27–8 May).

    Google Scholar 

  • Lin, J. Y., F. Cai and L. Zhou (1995) ‘The Core Task in Reforming China’s State Owned Enterprises Is to Create an Competitive Environment’, Xin Hua Wen Zhai, September, pp. 42–47 (in Chinese).

    Google Scholar 

  • Liu, Z. and G. S. Liu (1996) ‘The Efficiency Impact of Chinese Industrial Reform in the 1980s’, Journal of Comparative Economics, 23, pp. 237–55.

    Article  Google Scholar 

  • Lo, D. (1997) ‘Re-appraising China’s State-owned Industrial Enterprises’, Working Paper Series, 67, Department of Economics, School of Oriental and African Studies, University of London.

    Google Scholar 

  • Malatesta, P. H. (1992) ‘Takeover Defences’, in (eds), New Palgrave Dictionary of Money and Finance, 3 (London: Macmillan), pp. 633–6.

    Google Scholar 

  • McMillan, J. and B. Naughton (1992) ‘How to Reform a Planned Economy: Lessons from China’, Oxford Review of Economic Policy, 8(1), pp. 130–43.

    Article  Google Scholar 

  • Millward, R. (1988) ‘Measured Sources of Inefficiency in the Performance of Private and Public Enterprises’, in P. Cook and C. Kirkpatrick (eds), Privatization in Less Developed Countries (London: Harvester Wheatsheaf).

    Google Scholar 

  • Mookerjee, R. and Q. Yu (1995) ‘Capital Market Reform on the Road to a Market-Oriented Economy: The Case of Stock Markets in China’, Journal of Developing Areas, 30, pp. 23–40.

    Google Scholar 

  • Morck, R., A. Shleifer and R. W. Vishny (1990) ‘Do Managerial Objectives Drive Bad Acquisitions?’, Journal of Finance, 45(1), pp. 31–48.

    Article  Google Scholar 

  • Morris, D. (1995) ‘The Reform of State-owned Enterprises in China: The Art of the Possible’, Oxford Review of Economic Policy, 11(4), pp. 54–69.

    Article  Google Scholar 

  • Naughton, B. (1994) ‘What is Distinctive about China’s Economic Transition? State Enterprise Reform and Overall System Transformation’, Journal of Comparative Economics, 18, pp. 470–490.

    Article  Google Scholar 

  • Naughton, B. (1995) ‘China’s Macroeconomy in Transition’, China Quarterly, 144, pp. 1083–1104.

    Article  Google Scholar 

  • Newbery, D. (1992) ‘The Role of Public Enterprises in the National Economy’, Asian Economic Review, 10(2), pp. 1–34.

    Google Scholar 

  • Oxford Economic Policy Review (1992) Symposium on ‘Corporate Governance and Corporate Control’, 8 (3).

    Google Scholar 

  • Prager, J. (1992) ‘Is Privatization a Panacea for LDCs? Market Failure versus Public Sector Failure’, Journal of Developing Areas, 26, pp. 301–22.

    Google Scholar 

  • Prowse, S. D. (1992) ‘The Structure of Corporate Ownership in Japan’, Journal of Finance, 47(3), pp. 1121–40.

    Article  Google Scholar 

  • Robertson, D. H. (1923) The Control of Industry (Cambridge: Cambridge University Press).

    Google Scholar 

  • Schaffer, M. E. (1989) ‘The Credible-commitment Problem in the Centre-Enterprise Relationship’, Journal of Comparative Economics, 13, pp. 359–82.

    Article  Google Scholar 

  • Scharfstein, D. (1988) ‘The Disciplinary Role of Takeovers’, Review of Economic Studies, 55, pp. 185–99.

    Article  Google Scholar 

  • Schelling, T. C. (1960) The Strategy of Conflict (Cambridge, Mass.: Harvard University Press).

    Google Scholar 

  • Scherer, F. M. (1988) ‘Corporate Take-overs: The Eficiency Argument’, Journal of Economic Perspectives, 2(1), pp. 69–82.

    Article  Google Scholar 

  • Shleifer, A. and R. W. Vishny (1986) ‘Large Shareholders and Corporate Control’, Journal of Political Economy, 94(3) pp. 461–88.

    Article  Google Scholar 

  • Shleifer, A. and R. W. Vishny (1988) ‘Value Maximization and the Acquisition Process’, Journal of Economic Perspectives, 2(1), pp. 7–20.

    Article  Google Scholar 

  • Singh, A. (1992) ‘Corporate Takeovers: A Review’, Discussion Paper, 9206, Department of Applied Economics, University of Cambridge.

    Google Scholar 

  • Stein, J. C. (1988) ‘Takeover Threats and Managerial Myopia’, Journal of Political Economy, 96(1), pp. 61–80.

    Article  Google Scholar 

  • Stein, J. C. (1989) ‘Efficient Capital Markets, Inefficient Firms: A Model of Myopic Corporate Behaviour’, Quarterly Journal of Economics, 104, pp. 655–69.

    Article  Google Scholar 

  • Stiglitz, J. E. (1985) ‘Credit Markets and the Control of Capital’, Journal of Money, Credit, and Banking, 17(2), pp. 133–52.

    Article  Google Scholar 

  • Stiglitz, J. E. (1991) ‘Symposium on Organizations and Economics’, Journal of Economic Perspectives, 5(2), pp. 15–24.

    Article  Google Scholar 

  • Streeton, P. (1983) ‘Twenty-one Arguments for Public Enterprise’, in K. Haq (ed.), Global Development: Issues and Choices (Washington DC: North-South Roundtable of the Society for International Development).

    Google Scholar 

  • Twight, C. (1993) ‘Channelling Ideology Change: The Political Economy of Dependence on Government’, Kyklos, 46(4), pp. 497–527.

    Article  Google Scholar 

  • Vickers, J. S. (1985) ‘Delegation and the Theory of the Firm’, Economic Journal Conference Supplement, 95, pp. 138–47.

    Google Scholar 

  • Vickers, J. S. and G. K. Yarrow (1988) Privatization: An Economic Analysis (Cambridge, Mass.: MIT Press).

    Google Scholar 

  • Vickers, J. S. and G. K. Yarrow (1991) ‘Economic Perspectives on Privatization’, Journal of Economic Perspectives, 5(2), pp. 111–32.

    Article  Google Scholar 

  • Willner, J. (1994) ‘Eficiency under Public and Private Ownership Reform: A Survey’, Economics Paper Series, A. 422, Department of Economics, Abo Akademi University, Finland.

    Google Scholar 

  • Wood, A. (1991) ‘Joint Stock Companies with Rearranged Public Ownership: Invigoration of China’s State Enterprises Further Considered’, Discussion Paper, CP 11, The Development Economics Research Programme, London School of Economics.

    Google Scholar 

  • Wood, A. (1993) ‘Joint Stock Companies with Rearranged Public Ownership: What Can we Learn from Recent Chinese and East European Experience with State Enterprises?’, China Economic Review, 41(2), pp. 181–94.

    Article  Google Scholar 

  • World Bank (1985) China: Long-Term Development Issues and Options (Baltimore and London: Johns Hopkins University Press).

    Google Scholar 

  • World Bank (1993) The East Asian Miracle (Oxford: Oxford University Press).

    Google Scholar 

  • Wu, Yanrui (1995) ‘Productivity Growth, Technical Progress, and Technical Eficiency Change in China: A Three Sector Analysis’, Journal of Comparative Economics, 21, pp. 207–29.

    Article  Google Scholar 

  • Yao, Shujie (1997) ‘Proit Sharing, Bonus Payment, and Productivity: A Case Study of Chinese State-owned Enterprises’, Journal of Comparative Economics, 24, pp. 281–96.

    Article  Google Scholar 

  • Yarrow, G. K. (1985) ‘Shareholder Protection, Compulsory Acquisition and the Eficiency of the Take-over Process’, Journal of Industrial Economics, 34(1), pp. 3–16.

    Article  Google Scholar 

  • Yarrow, G. K. (1986) ‘Privatization in Theory and Practice’, Economic Policy, 2, pp. 325–77.

    Google Scholar 

  • Yotopoulos, P. A. (1989) ‘The (Rip)Tide of Privatization: Lessons from Chile’, World Development, 17 (5).

    Google Scholar 

Download references

Authors

Editor information

Editors and Affiliations

Copyright information

© 2000 Palgrave Macmillan, a division of Macmillan Publishers Limited

About this chapter

Cite this chapter

Liu, M. (2000). Capitalist Firms, Public Enterprises: Ownership Reform and Privatization of Chinese State-owned Enterprises. In: Cook, S., Yao, S., Zhuang, J. (eds) The Chinese Economy under Transition. Studies on the Chinese Economy. Palgrave Macmillan, London. https://doi.org/10.1057/9780230288164_3

Download citation

Publish with us

Policies and ethics