ABSTRACT
The dynamic of China’s reform was rooted in labour market reform. A householdbased production contract system was introduced to liberate the peasant labour force from the collectives and the forced labour of the communes. Not only did the policy boost productivity, it also released a large number of surplus labourers from rural areas. The urban reform, on the other hand, was initiated in three realms, namely deregulation, marketisation and then privatisation of the SOEs and urban collective-owned enterprises (UCEs), establishment of township or village enterprises (TVEs), and encouragement of Sino-overseas joint ventures (JVs), foreign invested enterprises (FIEs) and later domestic privately owned enterprises (POEs) (Cooke, 2005).
