ABSTRACT
It is generally agreed that privatization of China’s state-owned enterprises (SOEs) would improve economic efficiency, but may have an adverse impact on employment. In the process of privatization, the newly privatized enterprises would cut their redundant staff in order to maximize profits, which would inevitably aggravate the high unemployment pressure in China. While liberal economists insist that privatization is the key to reform, many Chinese scholars and government policy-makers reject any suggestion of a rapid privatization process out of concern over unemployment.
