ABSTRACT
Deng Xiaoping, China's paramount ruler without portfolio for much of the reform era, toured the economic hot spots of south China during January 1992. Regional policy certainly has undergone a dramatic shift. In the 1950s, the government attempted to right the imbalance of 70 percent of the nation's productive industrial assets being located in the coastal cities by directing investment toward the interior. Local governments in China have thus also caught the entrepreneurial spirit. The governments in the special economic zones and the various kaifa qu have set up companies to run the districts' various enterprises. Deagriculturization and the general society-wide liberalization aided the process by freeing labor from the fields both to serve as shop clerks and managers and customers. Taxes are a major source of revenue for the township governments, and they have long desired to get their piece of the most dynamically growing aspect of the countryside's economic growth, the township enterprises.
