ABSTRACT
State-owned enterprises play a predominant role in the Chinese economy. In 1978, the year just before economic reform started, state-owned enterprises accounted for 21 per cent of industrial output and 92.3 per cent of retail sales. The rest was provided by collectives, with the private sector offering nearly nothing, save for agricultural produce. Furthermore, collectives are by no means genuine cooperatives, but are public enterprises attached to a lower administrative hierarchy and therefore less privileged. The economic reform process has witnessed the rise of the private economy, which accounted for nearly 5 per cent of output in 1988; but on the whole reform has changed the environment in which these enterprises operate rather than the ownership structure as such.
