ABSTRACT
China's experiment in economic reform caught the world's eye a decade ago and the Chinese state at present stands in what its leadership perceives to be a fiscal crisis. Early in 1985 the northeastern industrial capital of Shenyang issued the first bankruptcy law in post-1949 China, in the form of trial provisions for collectively owned enterprises, to apply within this one municipality. In Chinese context, mergers of state enterprises amount to the transfer of management power and right to benefit away from firms in trouble to firms better suited to use their assets. Shareholding began in post-1949 China in Shenyang in 1982. In the cities that have experimented with enterprise bankruptcies, such as Shenyang, the city government installed a new office expressly to handle the bankruptcies. This chapter explains the industrial bureaus that manage production and sales in particular trades in the urban economies are subdivided into specialized industrial companies that are responsible for directing the individual firms.
