Introduction

This introduction presents an overview of the key concepts discussed in the subsequent chapters of this book. The book focuses on property-rights relations and agency problems to analyze the problems of Chinese enterprise reform. It describes the level of economic efficiency in socialist economic organization is determined by its "objective" and "subjective conditions". The book discusses the first stage of the reform, covering the period since 1978 up to the early 1980s. It analyses firms in China, Japan, and Korea in terms of their structural characteristics and implications of these for long-term performance of firms. The book also analyses performance of the CMI model by developing and testing hypotheses about its behavior. It also discusses the two-tier collusion problem in the CMI model and argues that, as was the case with the initial model, the CMI reform did not satisfactorily solve this problem either. The book examines various forms of nonstate enterprises in China.