The rural coal mines and their owners: social costs and benefits
The most dramatic change in China’s coal industry after the onset of reforms was the growth of a collectively owned or privately owned small mine sector in rural areas. This intensified the dualism that had previously existed within the SOE sector, with SOE mines now counterposed to large numbers of small-scale TVMs. The two sectors differed in scale, technology and market orientation. The SOE mines were mostly larger, offered higher wage packages and better conditions and operated with higher levels of capital intensity and technology; up to the 1990s, they faced softer budget constraints with weak exposure to market signals. The TVMs were characterized by their smaller scale, lower wages and poorer conditions, use of labour-intensive technology, relatively hard budget constraints and a greater sensitivity to market signals.