ABSTRACT
As discussed in the previous chapter, it is the restoration of the independent producer that created an economic and material foundation for the rebirth
of private ownership and private enterprises in China. It was unexpected by the CPC ruling elite that the agricultural reform and opening measures, which were meant to help sustain the planned economy, generated market forces and initiated the transition. Also unexpected, the private individual economy, in the form of specialised production households in the rural areas and self-employed producers and traders in the urban areas, developed into a ballooning private sector. When established as legal economic entities, enterprises developed into an indispensable component of the economy, compelling the ruling elite to
their policies from restrictive control to open encouragement. It took the CPC elite 14 years to adopt a market economy to replace the
planned economy, which represents a verdict on the state centralised distribution of resources. It took the elite more years, 20 years, to accept the private sector as an of the socialist market economy because the restoration enterprises based on ownership challenges the essence of socialism. enterprises were encouraged by the open-door policy on the grounds that foreign investment would bring capital, advanced technology, new and management into the rebirth of Chinese domestic private was discouraged by the and state
av~'"""u" until its contribution to the economy, in terms of job and wealth creation, could no be ignored. This chapter traces the development of enterprises on the one hand and the revision of the ideology on ownership on the trying to how the private has risen like a phoenix from the ashes, why the elite had to revise the party ideology to accommodate the rebirth of private enterprises based on private ownership, and the implications for political in China.
