Enterprise Reforms in a Centrally Planned Economy The Case of the Chinese Bicycle Industry

This book seeks to analyze China's industrial reforms of the 1980s. It sets the scene with an account of the failings of the previous highly centralized system of enterprise planning and management. The book then tackles in detail the enterprise reforms, focusing particularly on the introduction of a profit-retention scheme, but including also related changes in systems of planning, material supply and labour management. At the micro level, it emphasizes the distortions caused by the new patterns of incentives, while at the macro level it charts the simultaneous explosion of investment and consumption and the acceleration of inflation. The analysis throughout is pitched at two levels: a general account of policy objectives and instruments, rules and institutions, along with macroeconomic measures of performance; and a sustained case-study of the Chinese bicycle industry which is used to illustrate development and problems, and the impact of the recent reforms.