The Role of Small and Medium Sized Enterprises
- Studies of Small and Medium Sized Enterprises in East Asia series
Edited by Charles Harvie and Boon-Chye Lee
Chapter 14: The Changing Role of Local Government in Promoting China’s Collective Township and Village Enterprises
14. The changing role of local government in promoting China’s collective township and village enterprises Russell Smyth1 14.1 INTRODUCTION Collective township and village enterprises (CTVEs) have been the driving force behind China’s high rate of economic growth over a sustained period. In most East Asian countries central governments have implemented industrial policies designed to foster small and medium-sized enterprise development. An unusual feature of China’s industrial development is that local governments have performed this role. Various authors have described the close relationship between local governments – or township-village governments (TVGs) – and CTVEs as a form of ‘corporatism’ or have likened TVGs to economic corporations (see for example Oi, 1988, 1992; Che and Qian, 1998; Walder, 1998). However, in recent times the economic relationship between TVGs and CTVEs has undergone signiﬁcant change. An important feature of the changing relationship concerns the role of TVGs in arranging ﬁnancing for CTVEs under their control. The aim of this chapter is to review these recent developments. The main argument will be that as monitoring costs have increased, local governments have adopted indirect forms of governance over CTVEs, such as leasing and shareholding cooperative reform as vehicles to raise capital, while retaining direct control over the most proﬁtable ﬁrms. The chapter is set out as follows. The next section provides a brief overview of the historical evolution of CTVEs in China and outlines their distinguishing characteristics. Section 14.3 describes the traditional role of TVGs in ﬁnancing CTVEs under their control. The advantages and disadvantages...
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.