State-Owned Enterprise Reform and Smooth Institutional Transition in China -- A Three-Stage Economic Reform Method

Guoqiang Tian

MPRA Paper from University Library of Munich, Germany

Abstract: This paper addresses the methods of state-owned enterprises’ ownership reform and the smooth institutional transition of the economic system in China. By using the theory of endogenous ownership arrangements developed in Tian (1995), a three stage method of China’s economic reform will be given. We show that a smooth institutional transition to a market economy needs to go through three stages: (1) economic liberalization; (2) marketization; and (3) privatization. In the first stage, the entry and competition of enterprises of all kinds of ownership make the non-state owned sector of the economy develop quickly. In the second stage, competition among enterprises of all kinds of ownership and the introduction and development of the market system lead to reduction of state-owned enterprises. In the third stage, state-owned enterprises will face large scale bankruptcy and privatization. The first stage began with rural economic reform in China in 1979. The second stage began in 1992. The third stage has not begun and should not be expected too soon. It is preferable to wait about 5-10 years until the non-state owned economy has become a large proportion of the economy, say above 80% of GNP, and the social security network is almost completed.

Keywords: State-owned Enterprise Reform; Smooth Institutional Transition; China (search for similar items in EconPapers)
JEL-codes: P21 (search for similar items in EconPapers)
Date: 1996
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in The Reformability of China's State Sector (1996): pp. 220-240

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/41213/1/MPRA_paper_41213.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:41213

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().