ABSTRACT
A distinctive feature of China’s reform success has been the extraordinary growth of the non-state sector (Naughton 1995).1 Initially this sector was dominated by collective rather than private enterprises. This was particularly true in rural China until the early 1990s (Findlay et al. 1994). In the mid-1980s, the collectively owned township and village enterprises (TVEs) were the driving force behind the rapid growth of rural income.2 Rural private enterprises, including both family businesses and joint ventures by farm households, accounted for only one-third of rural enterprise production in most years.
