|
Government ownership is rapidly declining, only about 25% industrial output is State controlled. Most businesses in China are privately owned or have foreign investment. Except for critical areas such as Defence; Telecommunications and Energy much of the economy is in private hands.
Over the last 20 years of China 's reforms, township and village enterprises have developed and become a noticeable economic force full of vitality. Their development shattered the long standstill in the economic pattern and enabled the national economy to advance at a healthy rate. Because they took the lead in entering the market and got rid of the banding of planned economy, they have become the vanguard of reform and a leading force of socialist market economy. Because they led adjustment of the ownership structure, they have made a historical contribution to the establishment of an economic system in the primary stage of socialism. Their introduction of industrial and city civilisation to vast rural area helped them to open up an unprecedented road of industrialisation and urbanisation with Chinese characteristics, hence enabling farmers to improve their calibre as a whole.
Jiang Zemin, General Secretary of the CPC Central Committee, pointed out when he inspected township and village enterprises in Jiangsu Province : "A large portion of the national economy's growth has been created by township and village enterprise. Running them well is extremely important for realising the targets of our national economic development. Well-run state-owned enterprises also contribute to more stable and stronger agriculture and promote the whole national economy entering a healthy cycle."
For example the Wenzhou network is around 700 private companies that operate as a single unofficial entity. Last year Wenzhou manufactured 750 million lighters and had a 70% share of the world market.
Since the Township & Village enterprises have few if any bureaucratic systems, and little if any corporate overhead, they are highly flexible low-cost producers. Foreign executives usually ignore them because they don't conform to the conventional notion of a global organisation, but they have captured up to 50% of the world markets for Christmas decorations, pens, socks, shoes, ties, toys and watches. They challenge Italian, French and Spanish for fashion quality, and turn design to product in 24 hours. |
