Forging Reform in China
The Fate of State-Owned Industry

Forging Reform in China explains how and why measures to reform unprofitable state-owned enterprises have not succeeded and how meaningful reform could be achieved.

Edward S. Steinfeld (Author)

9780521778619, Cambridge University Press

Paperback, published 13 January 2000

320 pages, 7 b/w illus. 24 tables
22.8 x 15.3 x 2 cm, 0.42 kg

'… Edward Steinfeld, a professor at MIT's Sloan School of Business, offers compelling evidence that 'autonomy extended in the absence of functioning governance and hard budgets is a recipe for disaster … he examines the cases of three large steel companies that epitomise the almighty mess created after managers were given rights without responsibilities'. Wall Street Journal

The greatest economic challenge facing China in the post-Deng era is the reform of unprofitable, state-owned enterprises (SOEs) which threaten to drag down the rest of the economy. Despite an array of well-intentioned, market-oriented reform measures, these firms have never truly been forced to face the pressure of a bottom line, or the threat of bankruptcy. Forging Reform in China explains how and why these measures have not been sweepingly successful to date, and what it would take to achieve meaningful reform. The author investigates firm-level processes, including case studies of China's steel industry giants, revealing institutional and systemic barriers to market-oriented performance. This book makes a compelling argument that private ownership cannot work in China's current system until governance over complex economic factors has been established, that is, until credit is tightened and market selection processes made to work.

List of tables and figures
Preface
1. Introduction: China's ailing state enterprises
Part I. Conceptual Approaches to Post-Socialist Enterprise Reform: 2. Property rights, privatization and the state-owned firm
3. The nested problems dynamic: an alternative approach
Part II. Enterprise Case Studies: The Commanding Heights in Transition: 4. The living museum of iron and steel technology
5. King of the red chips: Ma'anshan steel and the debacle of the 'public' SOE in China
6. Shougang: the rise and fall of an industrial giant
Part III. Reassessing Chinese Patterns of Economic Development: 7. Extending the argument: budget constraints and patterns of growth in China
8. Conclusion
Notes
Bibliography
Index.

Subject Areas: Development economics & emerging economies [KCM]