ABSTRACT
It is widely accepted that the rapid growth of the Chinese economy over the past two decades has been largely driven by the non-state sector. In the first few years of economic reforms, from the late 1970s to the mid-1980s, the revitalisation of the agricultural sector played the crucial role in accelerating economic growth. The ensuing surge of rural township and village enterprises (TVEs), along with foreign-funded enterprises and domestic private enterprises, sustained the rapid growth of the rural and urban economies. The reform of the urban state-owned enterprises (SOEs), which began around the same time as agricultural reform, has not produced such dramatic results. This is partly because of the government’s gradual approach to SOE reform-‘crossing the river by feeling the stones’, in Deng Xiaoping’s words.
