"One Country, Two Systems:" China's Economic Policies Towards State & Township/Village-Owned Enterprises, 1978-1992 (Essay‪)‬

INTRODUCTION Reconstructing industrial enterprise was the central dimension of the Chinese economic reform from the late 1970s to early 1990s. The pace and result of reform varied across enterprises, depending upon the type of ownership. Township/village-owned enterprises (TVEs) grew very rapidly while state-owned enterprises (SOEs) experienced ongoing failures during the same period. The differences between how these two types of enterprise fared in China beg for some close investigation and scrutiny. I argue that governmental industrial policies are the institutional setting that determines the success of enterprise reform because it defines the legal parameters of the environment in which enterprises survive and develop. Thus, studying such policies provides not only the background for an understanding of the rationale, processes, consequences, and problems of the reform, but also a base from which to predict the future development of enterprise reform.