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Enterprise Autonomy Policy in Post-Mao China: A Case Study of Policy-making, 1978–83*

Published online by Cambridge University Press:  17 February 2009


Analysts and observers expect a faster pace and a greater magnitude of change in China's economic system in the post-Mao era than was achieved in earlier decades. Yet contrary to this view researchers have found that reform between 1978 and 1983, in the genuine sense of the word, was limited. Moreover, changes that have occurred appear to have resulted from proposals made in the 1950s to 1960s. Additionally, it took eight years (from 1976 to 1984) for Chinese policy-makers to advocate reforms of any significance. In fact the Party's resolution on the reform of the economic system was not put forward until the Third Plenum of 12th Party Congress in October 1984.

Research Article
Copyright © The China Quarterly 1986

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4. The term “enterprise autonomy” refers to a general decentralization of managerial power from the state to the enterprise level. Starting in 1980 when the central authorities discovered that the enterprise autonomy was out of hand, the concept of “industrial economic responsibility system” (gongye jingji zeren zhi) was used to order to underscore the delegation not only of power, but also of responsibility to enterprise units within the administered economy. The industrial economic responsibility system also means the delegation of power and responsibility to the sub-units within an enterprise.

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7. The profit sharing scheme started in 1953. Rulings were made in 1954 and 1956, and in 1958 the State Council promulgated a document concerning an enterprise retained profit system. See “Guowuyuan guanyu shixing qiye lirun liucheng zhidu de jixiang guiding” (“Several State Council regulations concerning the implementation of the enterprise retained profit system”), ibid. (January–June 1958), pp. 239–42.

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14. From September to November 1957 the drafting of three policy papers was attributed to Chen Yun: See Chen Yun, “Tizhi gaige yihou yinggai zhuyi de wenti” (“Problems which should be emphasized following reform of the system”) in Yun, Chen, Chen Yun tongzhi wengao xuanji (Selected Manuscripts of Comrade Chen Yun) (Beijing: Renmin chubanshe, 1981), pp. 5859Google Scholar; Chen Yun, “Guanyu gaijin gongye guanli tizhi de guiding” (“Regulations concerning the improvement of the management system in industry”), ibid. pp. 60–66; Chen Yun, “Guanyu gaijin shangye guanli tizhi de guiding” (“Regulations concerning the improvement of the management system in commerce”), ibid. pp. 67–69.

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18. Zhongguo renmin yinhang guanyu guoying qiye liudong zijin gaiyou renmin yinhang tongyi guanli de baogao” (“Report of the People's Bank of China bringing the working capital of state-run enterprises under the management of the People's Bank”), Guowuyuan gongbao (Bulletin of the State Council), No. 15 (1983), p. 698703Google Scholar.

19. “Jiben jianshe xiangmu baogan jingji zerenzhi shixing banfa” (“Methods for implementing the contract and economic responsibility system for basic construction items”), ibid. No. 8 (1983), pp. 272–96.

20. “Jianchi shijian biaozhun, fazhan jingjikexue” (“Insist on the criterion of practice and develop economic science”), Guangming ribao (Guangming Daily), 20 December 1979, p. 4.

21. Xiaoping, Deng, “Muqian de xingshi he renwu” (“The current situation and tasks”), Deng Xiaoping wenxuan (Collected Essays of Deng Xiaoping) (Beijing: Renmin chubanshe, 1983), pp. 203–37Google Scholar.

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24. Deng Xiaoping, “Jianchi sixiang jiben yuanze” (“Insist on the four basic principles”), ibid. pp. 147–49.

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26. “Guoying qiye shixing tiqu he shiyong qiye jijin” (“State-run enterprises implement the appropriation and disbursement of enterprise funds”), Renmin ribao, 20 December 1978, p. 1.

27. Ibid.

28. Haibo, Wang, Jinglin, Wu and Shulian, Zhou, “Bixu ba laodongzhe de yibufen shouru he qiye de jingying zhuangkuang jinmi di liarxi qilai” (“We must closely tie a part of workers' income to the managerial performance of enterprises”), Jingji yanjiu (Economic Research), No. 12 (1978), pp. 3743Google Scholar.

29. “The State Council promulgates five documents,” Dagong bao, 30 July 1979, p. 1.

30. The programme was known as the “10-point regulation,” which was circulated within the inner circle of the Chinese leadership at the time. A similar version was not promulgated until about five years later in May 1984. See Wenhui bao (Wenhui Daily), 12 May 1984, p. 3.

31. Lingfeng, Du, “Guanyu qiye lirun liucheng wenti” (“On the question of the retention of enterprise profits”), Jingji guanli (Economic Management), No. 4 (1980), pp. 2023Google Scholar; Shohua, Zhou, “Qiye lirun liucheng jieshao” (“Introducing profit retention of enterprises”), Qiye guanli (Enterprise Management), No. 2 (1981), pp. 2728Google Scholar; Zhicheng, Liu, “Duiyu kuoda qiye caiquan de jidian kanfa” (“Several opinions on expanding the financial powers of enterprises”), Jingji guanli, No. 4 (1980), pp. 1619. p. 30Google Scholar.

32. For the original text of the January 1980 regulation, see Guowuyuan pizhuan guojia jingji wieyuanhui caizhengbu guanyu guoying gongye qiye lirun liucheng shixing banfa tongzhi” (“Circular concerning the implementation of profit retention by staterun industrial enterprises issued by the State Economic Commission and the Ministry of Finance as endorsed and transmitted by the State Council”), Guowuyuan gongbao. No. 1 (1980), pp. 610Google Scholar.

33. “Yao yongyu kuachu tizhi gaige de diyibu” (“We must courageously take the first step in reforming the system), Renmin ribao, 10 October 1979, p. 1.

34. Jiang, Hai, “Zhongguo jingji tizhi gaige de qibu: kuoda qiye jingying guanli de zizhuquan” (“The starting-point for reforming China's economic system: expand enterprise autonomy in administration and management”), Jingji daobao (Economic Reporter), No. 30 (1980), pp. 2829Google Scholar.

35. “Guojia Jingji Weiyuanhui Caizhengbu guanyu guoying gongye quye lirun liucheng sixing banfa” (“Methods of implementing profit retention by state-run industrial enterprises as laid down by the State Economic Committee and Ministry of Finance”), in Zhongguo Renmin Daxue Zhengzhi Jingjixuexi Ziliaoshi (Chinese People's University Political and Economic Study National Office) (ed.), Zhongguo shehui zhuvi jingji wenti (Major Economic Problems of the Chinese Society) (Beijing: Dizhi chubanshe, 1983), pp. 347–50Google Scholar.

36. Guojia jingji weiyuanhui guanyu kuoda qiye zizhuquan shidian gongzuo qingkuang he jinhou yijian de baogai” (“Report of the State Economic Committee on current pilot schemes for expanding enterprise autonomy and views on the future”), Guowuyuan gongbao, No. 14 (1980), pp. 419–27Google Scholar.

37. “Kuoda zizhuquan shidian fangxiang dui xiaoguo hao” (“The experiments in the expansion of autonomy are in the right direction and their results are good”), Gongren ribao (Workers'Daily), 11 April 1980, p. l; “Guowuyuan pichuan guojia jingweiguanyu kuoda qiye zizhuquan shidian gonguo qingquang he jinhou yijian de baogao” (“Report of the State Council, endorsed by the State Economic Committee, on the current pilot schemes for extending enterprise autonomy and views on the future”), Renmin ribao, 1 September 1980, p. 1.

38. Ling, Lin, “Sichuan Sheng Liangnian Lai Jingji tizhi gaige de Jingyan yu wenti” (“Problems and experience during the past two years of Sichuan in reforming the economic system”), Jingji guanli, No. 6 (1981), p. 20Google Scholar.

39. “Guoying gongye qiye shixing zifu yingkui shidian” (“Pilot programme for implementing the responsibility system relating to profits and losses in state-run industrial enterprises”), Renmin ribao, 20 August 1980, p. 1.

40. Hong, Ma, “Guanyu jingji guanli tizhi gaige de jige wenti” (“Several problems in reforming the system of economic management”), Jingji yanjiu, No. 7 (1981), pp. 1124Google Scholar.

41. The background to the Sichuan experiment is given by Ling, Lin, “Zhongguo jingji tizhi gaige zai Sichuan de shiyan” (“The experience of Sichuan in reforming China's economic system”), Shehuikexue yanjiu (Social Science Research), No. 3 (1981), pp. 1622Google Scholar.

42. Ju, Feng and Zhenghua, Zhou, “Sichuan sheng wuge guoying gongye qiye zifu yingkui shidian de tiaocha” (“Survey of experiments in five state-run industrial enterprises of Sichuan province in assuming responsibility for profits and loss”), Zhongguo shehuikexue (China's Social Sciences), No. 3 (1981), pp. 8396Google Scholar.

43. “Wo sheng yibai qiye shixing kuoda qiye zizhuquan” (“Our province is implementing the expansion of enterprise autonomy in 100 plants”), in Nanfang ribao (Southern Daily), 13 August 1979, p. 1; “Wo sheng yibaige qiye kuoda zizhuquan chu jian chengxiao” (“Initial achievements in 100 enterprises of our province with the extension of their autonomy”), in ibid. 27 October 1979, p. 1; “Baohu xianjin qiye de jijixing” (“Protect the incentives of the advanced enterprises”), ibid. (1 November 1979), p. 3; “Renxin sigai” (“Public feeling for a change”), ibid. 25 April 1980, p. 1.

44. “Bage qiye he yige xian difang qiye shixing zifu yingkui” (“Eight enterprises and one local enterprise at the county level implement the policy of enterprise responsibility for profits and losses”), ibid. 15 October 1980, p. 1; “Guangzhou shiliuge guoying cai mao qiye shixing zifu yingkui” (“Sixteen state-run financial and trading enterprises in Guangzhou implement autonomy over profits and losses”), ibid. 2 February 1981, p. 1; “Shixing duli hesuan zifu yingkui” (“The implementation of independent accounting and responsibility for profits and losses”), ibid. 16 August 1981, p. 1; “Wo sheng bage zifu yingkui shidian danwei qiye qude xin chengji” (“Eight experimental enterprise units relating to autonomous responsibility for profits and losses achieve new successes in our province”), ibid. 5 March 1982, p. 1.

45. “Yichang guanyu kuoda qiye zizhuquan de bianlun” (“A debate in Yinchang concerning the extension of enterprise autonomy”), Nanfang ribao (Southern Daily), 16 August 1979, p. 1; “Qingyuan jingyan jianguole guojia yu qiye geren de liyi” (“The experience of Qingyuan has taken account of the interests of the state and the individual enterprise”), ibid. 21 August 1979, p. 1; “Women dui Qingyuan xian shixing chao jihua lirun tichengjiang de kanfa” (“Our views on implementing the policy for dividing above plan profits in Qingyuan county”), ibid. 19 August 1979, p. 1; “Wo sheng jueding zai xian shu gongye qiye zhong tuiguang Qingyuan jingyan” (“Our province resolves to extend the experience of Qingyuan to industrial enterprises under the jurisdiction of the counties”), ibid. 30 August 1979, p. 1; Ma Yipin, “Yanjiu xin wenti zongjie xin jingyan” (“Investigate new problems, sum-up new experience”), ibid. 17 September 1979, p. 2; “Jiejui le popo duo, banshi nan de wenti” (“Solving the matter of having many mothers-in-law is to handle a difficult problem”), ibid. 14 November 1979, p. 2; Zhonggong Qingyuan xian weiyuanhui, “Guanyu qingyuan xian guoying qiye shixing chao jihua lirun tichengjiang he gaige gongye guanli tizhi de qingkuang baogao” (“Qingyuan county Party Committee report on the implementation in Qingyuan county of the sharing of above plan profits in state-run enterprises and of the reform of the industrial management system”), ibid. 2 August 1980, pp. 2 and 4; “Qingyuan jingyan de xinfazhan” (“New developments in the experience of Qingyuan”), ibid. 23 August 1981, p. 2 and 26 August 1981, p. 2.

46. Yifeng, Zhu Yan and Cai, “Dui Shanghai shi kuo quan qiye lirun liucheng fenxi” (“An analysis of profit-sharing in Shanghai's enterprises with expanded self-management rights”), Jingji yanjiu, No. 9 (1981), pp. 612Google Scholar.

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48. Lingshu, Chen, “Yi zhuguanju wei danwei shixing lirun liucheng banfa de libi” (“The pros and cons of taking the responsible bureaus as the unit for implementing the method of profit-sharing”), Jingji guanli, No. 1 (1981), pp. 1415; p. 29Google Scholar; Youde, Bao, “Kending chengji buduan wanshan” (“Acknowledge the merits and continue for perfection”), Caizheng (Finance), No. 10 (1981), pp. 1213Google Scholar.

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51. Guowuyuan guanyu shixing huafen shouzhi fenji baogan caizheng tizhi de zhanxing guiding” (“Provisional regulation of the State Council on implementing the financial system for dividing revenue and expenditure on a basis of contracting at different levels”), Guowuyuan gongbao, No. 1 (1980), pp. 310Google Scholar.

52. Zhao Ziyang suggested that in 1981 the non-budgetary funds controlled by the local governments and enterprise units reached about one half of the state budget. Zhao Ziyang, “Dangqian de jingji xingshi he jinhou jingji jianshe de fangzhen (“The current economic situation and guidelines for future economic construction”), ibid. No. 26 (1981), pp. 816–50.

53. Ziyang, Zhao, “Yanjiu xinwenti, ba jingji gaige gaohao” (“Investigate new problems, set economic reform on the right lines”), Renmin ribao, 21 04 1980, pp. 1 and 2Google Scholar.

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55. Caizheng bu guanyu zai guoying qiye huifu caizheng zhuchangyuan zhidu de baogao de tongzhi” (“Ministry of Finance circular on restoring the system of permanent financial personnel in state-run enterprises”), Guowuyuan gongbao, No. 10 (1982), pp. 457–58Google Scholar.

56. “Caizhengbu guanyu qingcha toulou qianshui qingkuang he jiaqiang shuishou gongzuo de baogao” (“Ministry of Finance report on checking the situation concerning tax evasion and on strengthening the work of tax collection”), ibid. No. 3 (1982), pp. 284–89.

57. Jingji Fanzui Wenti Jianghua Bianxiezu (ed.) (Office for Compiling Lectures on Economic Crimes), Jingji fanzui wenti jianghua (Lectures on the Problems of Economic Crimes) (Beijing: Xinhua chubanshe, 1983), pp. 115Google Scholar.

58. Zhonggong zhongyang quowuyuan guanyu zhengji guojia nengyuan jiaotong zhongdian jianshe jijin de tongzhi” (“Circular of the CCP Central Committee and State Council on raising state funds for key construction in energy and communications”), Guowuyuan gongbao, No. 21 (1982), pp. 997–99Google Scholar.

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60. On the basis of the available data, the increase in the state deficit resulted from a slower growth of revenue than that of expenditure from 1978 to 1982. See State Statistical Bureau, People's Republic of China, Statistical Year Book of China 1984 (Hong Kong: Economic Information and Agency, 1984), p. 447Google Scholar; a large portion of increase of the state deficit was derived from a high growth rate in total investment in fixed assets: 54,830 million yuan in 1977, 66,872 in 1978, 64,936 in 1979, 74,590 in 1980, 66,751 in 1981, 84,531 in 1982 and 95,196 in 1983. See ibid. p. 302.

61. There were steady increases in subsidies to peasants (including that through grain procurement) and in wages to industrial workers, but such increases were within the bounds of increased GNP. It is estimated that from 1979 to 1982 the increase of GNP was RMB 120,000 million, out of which RMB 106,000 was paid to the peasants and workers. See Yibo, Bo, “Guanyu guomin jingji you jihua an bili fazhan de jige wenti” (“Several problems concerning the planned proportional development of the national economy”), Xinhua yuebao (New China Monthly), No. 10 (1983), p. 118Google Scholar.

62. The increase in the real wage was limited from 1977 to 1983 given the long wage freeze during the Cultural Revolution 1966–76. The increase was no more than 24% between 1977 and 1983. See State Statistical Bureau, Statistical Year Book, p. 460.

63. Ibid. p. 417.

64. Ibid.

65. Ibid. p. 301.

66. Yibo, Bo, “Several problems concerning the planned proportional development,” p. 118Google Scholar.

67. Ziyang, Zhao, “Guanyu di Huge wunian jihua de baogao” (“Report on the Sixth Five-Year Plan”), in Quanguo Renmin Daibiao Dahui Changwu Weiyuanhui Bangongting (ed.) (Official Office of the National People's Congress (NPC) Standing Committee), Zhonghua renmin gongheguo diwujie quanguo renmin daibiao dahui diwu ci huiyi wenjian (Documents of the Fifth Session of the Fifth NPC of the People's Republic of China) (Beijing: Renmin chubanshe, 1983), pp. 112–16Google Scholar.

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70. Guojia jingji weiyuanhui guowuyuan tizhi gaige bangong shi guanyu shixing gongye shengchan jingji zerenzhi ruogan wenti de yijian” (“Views of the State Economic Committee and the State Council Office for Reform of the System on China's problems concerning the implementation of the economic responsibility system in industrial production”), Guowuyuan gongbao, No. 24 (1980), pp. 757–64Google Scholar.

71. “Caizheng bu guanyu guanguo ligaishui gongzuo huiyi de baogao” (“Ministry of Finance report of a conference on the work of substituting profits for taxes throughout the country”), ibid. No. 11 (1983), p. 468.

72. Caizheng bu, “Guanyu guoying qiye ligaishui shixing banfa” (“Methods for implementing the substitution of profits for taxes in state-run enterprises”), ibid. No. 10 1983), pp. 475–78.

73. Gongsi, Zhong Gong Shoudu Gangtie (Chinese Capital Steel Company), “Gongye jingji zerenzhi de weili suozai” (“The source of strength of the industrial economic responsibility system”), Guangming ribao, 21 01 1983, p. 3Google Scholar.

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75. “The provisional measure of the Ministry of Finance,” loc. cit.

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79. “The resolution of the Central Committee, CCP,” p. 286.

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82. Ibid. p. 2.

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Enterprise Autonomy Policy in Post-Mao China: A Case Study of Policy-making, 1978–83*
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Enterprise Autonomy Policy in Post-Mao China: A Case Study of Policy-making, 1978–83*
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