Chinas Rural Leap Forward Harvard Case Solution & Analysis

Collectively owned township and village enterprises (TVE) plays a key role in the rapid growth of China in the 1980s and 1990s. Although they originated in the policy and institutions of Maoist era, the Commission has flourished only after Deng Xiaoping's economic reforms, redistribution of property rights, the tax authority and the responsibility for the provision of public goods. These reforms of local government according to the Commission for their tax revenues and gave the party cadres are powerful incentives for economic growth. Local officials often assisted the Commission in their jurisdiction, to gain access to technology, capital and production permits. Instead of rapid privatization of state-owned enterprises (SOEs), China has gradually liberalized its economic aspects in a controlled fashion, often creating a "market track" along with its planning system. As a share of state enterprises in production and employment declined, that of the Commission has increased dramatically. By the mid-to late-1990s, the Commission has made almost 40% of industrial production in China and has created about 100 million jobs. However, party officials are skeptical that the Commission was a viable form of economic organization with more and more large firms, more complex products and production processes, and the need for more capital and more skilled managers. "Hide
by Bruce R. Scott, Jamie L. Matthews Source: Harvard Business School 30 pages. Publication Date: November 22, 2002. Prod. #: 703024-PDF-ENG

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