ABSTRACT
During the last three decades, China has seen the rapid development and
emerging prosperity of the private economy. Previously, in the mid-1950s,
the Central Government had managed to all but eliminate the private sector
of the economy. Over the next 20 years or so, the economy remained
dominated by the state sector. The collective sector became the non-planned
(outside the state plan) state sector and the existence of the private sector
remained exceedingly small with only occupations such as ice-cream sellers,
tinkers and itinerant barbers left (Goodman 1995: 12-32). With reform, the state sector has decreased in scale and scope; and both the collective and
private sectors have boomed. According to the first economic census survey
conducted by the National Statistics Bureau, by the end of 2004, China had
altogether 179,000 state-owned enterprises accounting for 5.5 percent of the
country’s total; 343,000 collective enterprises (10.5 percent); and 1,982,000
private enterprises (61 percent) (Zhongguo Guojia Tongjiju 2005). The All-
China Federation of Industry and Commerce forecast in 2005 that by 2010
the private economy will contribute more than 75 percent of the country’s GDP (Liu Jing 2005). Moreover, the private sector has also become a major
source of employment for workers laid-off from state-owned enterprises and
the country’s increasing surplus labour force.
