Edited by David Parker and David Saal
Chapter 12: Privatization in China
Joseph C.H. Chai Introduction Privatization has many diﬀerent meanings. According to the count of Thiemeyer, there are at least 15 concepts of privatization in the literature (cited in Bös, 1991:2). Most studies of privatization have a narrow focus. First, they focus only on the outright sale of public assets to the exclusion of other forms of transfer, such as contracting out and leasing. Second, they focus only on public assets to the exclusion of collective properties. Third, they focus only on the non-agricultural sector. As a result, privatization in most of the literature simply means the sale of state-owned nonagricultural enterprises. Based on this concept of privatization, there is little doubt that privatization in China has made very little progress, as the core of Chinese state owned enterprises (SOEs), namely the large- and medium-sized industrial enterprises, which account for a signiﬁcant proportion of national industrial output, assets and employment, have not been privatized. Yet, in spite of this lack of progress in privatisation, China has been able to outperform other transitional economies in most of the economic success indicators. Chinese GDP per capita not only did not suﬀer a dip but advanced at an annual average rate of 8 per cent between 1978 and 1995, which is one of the highest in the world according to the World Bank (1997). Chinese unemployment and inﬂation rates during the transition period were signiﬁcantly higher than those during the pre-reform period. However, both were much lower...
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