ABSTRACT
China has seen a massive process of "privatization", and Lardy shows that the private sector has been responsible for most of the growth in output, employment and productivity since 1978. At the same time, the leadership has been priming some SOEs to be the "tip of the spear" for improved Chinese competitiveness on world markets. This chapter tries to make sense of this complexity by explaining enterprise reform, and the roles, attributes and performance of different types of Chinese firm in the twenty-first century. For centuries, the Chinese have been known for their entrepreneurial spirit. China has tens of millions of genuinely private companies that compete with each other and with some of the SOEs. Foreign-invested enterprises (FIEs) have been central to China's success, and there have been two distinctly different types. The first to participate were ethnically Chinese investors. In the second wave of investment, the companies involved were amongst the largest in the world.
