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New Bosses in the Workers' State: The Growth of Non-State Sector Employment in China*

Published online by Cambridge University Press:  12 February 2009

Lora Sabin
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Extract

Although the state is still a major economic actor in China's cities, it is widely recognized that the rapid expansion of entities outside the state sphere has already fundamentally altered not just the urban economic landscape but also the forces driving the country's labour markets. The extent and consequences of this expansion are in need of much greater scrutiny, however. A number of analysts have made use of available information to clarify employment growth and changes in employment structure since the early years of the People's Republic and the early period of reform. Recent scholarship has also enhanced understanding of the design, implementation and impact of formal labour reforms, such as the labour contract system, and the nature of worker-management relations in a partially reformed environment. But because of the scarcity of data on the non-state economy, this research has tended to focus on the state-owned industrial sector.

Type
Focus on Urban Labour
Information
The China Quarterly , Volume 140 , December 1994 , pp. 944 - 970
Copyright
Copyright © The China Quarterly 1994

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References

1. Two excellent examples are Emerson, John Philip, “The labor force of China, 1957–80,” in U.S. Congress, China Under the Four Modernizations, Part 1 (Washington, D.C.: U.S. Government Printing Office, 1982), pp. 224–267Google Scholar and Taylor, Jeffrey R., China's Economy Looks Toward the Year 2000, Volume 1 (Washington, D.C.: U.S. Government Printing Office, 1986), pp. 222–262.Google Scholar

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3. On the urban private economy, see Gold, Thomas B., “Urban private business and social change,” in Ezra, Vogel and Deborah, Davis (eds.), China on the Eve of Tiananmen (Cambridge, MA: Harvard University Press, 1990), pp. 157–178 andCrossRefGoogle ScholarYoung, Susan, “Wealth but not security: attitudes towards private business in China in the 1980s,” The Australian Journal of Chinese Affairs, No. 25 (1991), pp. 115–137.CrossRefGoogle ScholarPubMed Two interesting studies on the urban collective sector are Tang, Jianzhong and Ma, Laurence J.C., “Evolution of urban collective enterprises in China,” The China Quarterly, No. 104 (December 1985), pp. 614–640CrossRefGoogle Scholar and Lockett, Martin, “The urban collective economy,” in S., Feuchtwang, A., Hussain and T., Pairault (eds.), Transforming China's Economy in the Eighties, Volume 2 (Boulder, CO: Westview Press, 1988), pp. 118–137.Google Scholar

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5. Less than half a million urban youth were sent to rural areas in 1978, as compared to six million between 1975 and 1977. State Statistical Bureau (comp.), Zhongguo laodong gongzi tongji ziliao 1949–1985 (Statistical Materials on Chinese Labour and Wages 1949–1985) (Beijing: Zhongguo laodong chubanshe, 1987), p. 110.

6. The total number of youth leaving the countryside more than doubled between 1977 and 1978 to 2.5 million, of whom 1.3 million were ostensibly “looking for work.” Ibid. p. 111.

7. Ibid. p. 109.

8. These numbers are cited in Emerson, John Philip, “Urban school-leavers and unemployment in China,” The China Quarterly, No. 93 (March 1983), pp. 1–2CrossRefGoogle Scholar, and are for non-agricultural employment.

9. Thomas Rawski estimates that in 1957–74 output growth exceeded labour growth in non-agricultural sectors by a factor of roughly 1.5:1.0. See Rawski, Thomas G., Economic Growth and Employment in China (Oxford: Oxford University Press, 1979), pp. 124—25.Google Scholar

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11. This motive, with respect to the re-establishment of China's private economy, is discussed in Gold, Thomas B., “Urban private business in China,” Studies in Comparative Communism (Summer/Autumn 1989), p. 200.Google Scholar

12. Particularly strong endorsement came from the one-time director of the State Statistical Bureau, Xue Muqiao. See, for example, Xue's article, “Guanyu chengzhen laodong jiuye wenti de jidian yijian” (“Some opinions on urban labour and employment problems”), in Bao Ji (chief ed.), Zhongguo dangdai shehui'kexue mingjia zixuan xueshujinghua congshu, 8: Xue Muqiao xueshu jinghua lu (A Collection of Selected Scholarly Works by China's Modern Social Science Masters, Volume 8: A Collection of Scholarly Works by Xue Muqiao) (Beijing: Beijing shifan xueyuan chubanshe, 1988), pp. 405–411.

13. See “Zhonggong zhongyang zhuanfa quanguo jiuye huiyi wenjian ‘Jinyibu zuohao chengzhen laodong jiuye gongzuo’” (“The Central Committee of China's Communist Party transmits a document from the National Employment Conference: ‘Go a step further in doing labour employment work well’”), in Dongwan, Zhaoet al. (eds.), Zhongguo laodong renshi nianjian 1949–1987 (Yearbook on Chinese Labour and Personnel 1949–1987) (Beijing: Laodong renshi chubanshe, 1989), p. 1603.Google Scholar

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15. “Guowuyuan guanyu banfa ‘Guanyu chengzhen jiti suoyouzhi jingji ruogan zhengce wenti de zanxing guiding’ de tongzhi” (“Notice of the State Council on promulgation of: ‘Provisional regulations on certain policy issues with respect to the urban collectively-owned economy'”), in ibid pp. 649–650.

16. A new eight-tiered tax bracket system was introduced for collectives, which formerly had been subject to the same system used by small state-owned enterprises. See “Zhonghua renmin gongheguo jiti qiye suodeshui zanxing tiaoli” (“Provisional regulations on income taxation for collective enterprises of the People's Republic of China”), in Legislative Affairs Bureau, State Council (comp.), Zhonghua renmin gongheguo fagui huibian 1985 (Compilation of Laws and Regulations of the People's Republic of China 1985) (Beijing: Falu chubanshe, 1986), pp. 161–62, 164.Google Scholar

17. See, for example, “Notice of the State Council on regulations on the urban collectively-owned economy,” pp. 648–651.

18. Interview with officials at the Labour Service Companyof Beijing's Chaoyang District Labour Bureau in March 1993.

19. “Zhonggong zhongyang guanyu jingji tizhi gaige de jueding” (“Decision of the Central Committee of the Chinese Communist Party on reform of the economic structure”), in Zhiye, Wang and Yuanzhen, Zhu (chief eds.), Jingji tizhi gaige shouce (Handbook on Reform of the Economic Structure) (Beijing: Jingji ribao chubanshe, 1987), p. 12.Google Scholar This strategy is discussed in Lockett, “The urban collective economy,” p. 133.

20. “Zhonghua renmin gongheguo chengzhen jiti suoyouzhi qiye tiaoli” (“Regulations for urban collectively-owned enterprises of the People's Republic of China”), in Legislative Affairs Bureau, State Council (comp.), Zhonghua renmin gongheguo fagui huibian 1991 (Compilation of Laws and Regulations of the People's Republic of China 1991) (Beijing: Fain chubanshe, 1992), pp. 593–609.Google Scholar

21. State Statistical Bureau and Ministry of Labour (comps.), Zhongguo laodong tongji nianjian 1993 (Statistical Yearbook on Chinese Labour 1993) (Beijing: Zhongguo laodong chubanshe, 1993), pp. 22–24, 27.Google Scholar

22. Interview with officials at the Balizhuang Neighbourhood Office of Chaoyang District, Beijing in March 1993.

23. For more information on the emergence of this and other types of urban collectives, see Jianzhong Tang and Laurence J.C. Ma, “Evolution of urban collectives,” pp. 614–640.

24. In a March 1993 interview, officials at a neighbourhood committee in Chaoyang District, Beijing explained that their labour service company was created by the Ministry of labour in 1979. Over 50% of the investment in the collective enterprises they established came from borrowed funds, although all of this was eventually repaid. Most of the remainder Was contributed by retired local workers.

25. “Laodong jiuye fuwu qiye guanli guiding” (“Regulations on management of labour employment service enterprises”), in Legislative Affairs Bureau, State Council (comp.), Zhonghua renmin gongheguo fagui huibian 1990 (Compilation of Laws and Regulations of the People's Republic of China 1990) (Beijing: Falu chubanshe, 1991), pp. 666–67.Google Scholar

26. Statistical Yearbook on Labour 1993, pp. 181, 349.

27. Zhongguo shichang diaochasuo (China Market Survey Group),“‘Dakuan’ de nanti yu chulu” (“The tough problems of and way out for ‘big money’”) (unpublished report, 1992), p. 13.

28. Much of this information on the false registration of private enterprises was gained from discussions with researchers in Beijing and with the owners and managers of private businesses in Beijing, Chongqing, Chengdu, Guangzhou and Shenzhen in the summer and autumn of 1992.

29. See Young, “Wealth but not security,” pp. 118–19.

30. A new regulation effective in Beijing's Chaoyang District, for example, allows a business with three or more investors and with a minimum of eight employees to qualify for urban collective status. See Administrative Bureau for Industry and Commerce, Chaoyang District, Beijing Municipality, “Guanyu chengzhen qunzhong jizi xingban de jiti suoyouzhi qiye dengji guanli zanxing guiding (shixing)” (“Temporary regulations on registration and management of collectively-owned enterprises set up from the pooled resources of urban masses (trial implementation)”) (unpublished notice, 1992). Previously, such businesses had to produce a scientific or technological product in order to register as a collective. This information was obtained through a small group of private investors who have recently set up a survey and information “collective” under this new regulation.

31. For example, this is the view of a research group in Beijing with considerable experience surveying China's private economy. See Lingdian shichang diaocha yu fenxi gongsi (Horizon Market-Research and Policy-Analysis, Inc.), “Laoban, ni guakao de weiji” (“Boss, the crisis of your [false] registration”), Shidian (Viewpoint), No. 4 (1993), p. 18.Google Scholar

32. “A case of get-up-and-go in Wenzhou,” China Daily, 22 August 1992, p. 4.

33. See “Jingcheng qiqian xiaoqiye guoyou minying” (“Seven thousand small enterprises in the country's capital to be state-owned but people-operated”), Zhongguo gongshang shibao (China Industrial and Commercial Times), 24 February 1993, p. 1. Besides shareholding, r and systems, the article states that leasing and other private management arrangements, in addition to outright sales of enterprises, will be undertaken to invigorate these units.

34. Shanghai municipal officials recently announced the sale of 43 collectives to private traders in a bid to improve efficiency in the commercial sector. “Inefficient shops sold to private businesses,” China Daily, 19 July 1993, p. 2. Sales of small state enterprises have picked up as well. See “Hunan to auction off state firms,” China Daily, 12 July 1993, p. 2 and “private firm buys state enterprise,” China Daily, 1 October 1993, p. 2.

35. In addition to privatizing the management of urban collectives, a reported one-half of China's small state-owned shops had been leased out by mid-1993. “Leasing of state shops to citizens paying off,” China Daily, 23 July 1993, p. 3.

36. The agency claimed that financial losses of 310,000 yuan had been replaced by rent payments of 690,000 yuan from the reform. Interview with officials at the Non-staple Foodstuffs Company of Beijing's Chaoyang District in March 1993.

37. Interviews with officials at the Chaoyang District Labour Service Company and Balizhuang Neighbourhood Office in Beijing in March 1993.

38. See “Zhonghua renmin gongheguo zhongwai hezi jingying qiye fa” (“Sino-Foreign Joint Venture Law of the People's Republic of China”), in Handbook on Reform, pp. 423–24. This law stipulated that the foreign partner should generally have at least a 25% stake in the new enterprise and that after-tax profits should be distributed on the basis of equity shares.

39. “Zhonghua renmin gongheguo zhongwai hezi jingying qiye suodeshui fa” (“Sino-Foreign Joint Venture Income Tax Law of the People's Republic of China”), in ibid pp. 433–34.

40. “Zhonghua renmin gongheguo zhongwai hezi jingying qiye laodong guanli guiding” (“Regulations on labour management in Sino-foreign joint ventures of the People's Republic of China”), in Yearbook on Labour and Personnel 1949–1987, pp. 1650–51.

41. An authoritative study on Chinese joint ventures is Margaret Pearson, M., Joint Ventures in the People's Republic of China: The Control of Foreign Direct Investment Under Socialism (Princeton, NJ: Princeton University Press, 1991).Google Scholar

42. Vogel, Ezra, One Step Ahead in China: Guangdong Under Reform (Cambridge, MA: Harvard University Press, 1989), pp. 125–29Google Scholar, highlights the political sensitivity of this policy. A good discussion of the development of SEZs is Crane, George T., “Reform and retrenchment in China's special economic zones,” in U.S. Congress, China's Economic Dilemmas in the 1990s: The Problems of Reforms, Modernization, and Interdependence, Volume 2 (Washington, D.C.: U.S. Government Printing Office, 1991), pp. 841–857.Google Scholar

43. “Zhonghua renmin gongheguo waizi qiye fa” (“Foreign-Invested Enterprise Law of the People's Republic of China”), in Zhu, Yuanzhen and Fan, Maofa (chief eds.), Jingji tizhi gaige shouce (xu 2) (Handbook on Reform of the Economic Structure (Volume 2)) (Beijing: Jingji ribao chubanshe, 1989), pp. 319–320.Google Scholar

44. Whereas Sino-foreign co-operative ventures may determine their own profit distribution, profits of joint ventures must be split according to equity shares. Joint ventures also always have legal person status, but co-operative ventures may be set up as a legal or non-legal person business. See “Zhonghua renmin gongheguo zhongwai hezuo jingying qiye fa” (“Sino-Foreign Co-operative Venture Law of the People's Republic of China”), in ibid pp. 441–43. Two articles which help to clarify the differences between the two types of Sino-foreign partnerships are Cohen, Jerome Alan, “The long-awaited Co-operative Venture Law,” The China Business Review (July-August 1988), pp. 14–18Google Scholar and Bates, Laurence W. and Jianping, Wang, “The New Co-operative Joint Venture Law,” East Asian Executive (May 1988), pp. 7–10.Google Scholar

45. In addition to “sanzi” enterprises, there are also the representative offices set up by foreign companies and organizations carrying out trade or providing services but not investing in businesses in China.

46. See “Guowuyuan guanyu guli waishang touzi de guiding” (“Regulations of the State Council to encourage foreign investors”), in Handbook on Reform, pp. 232–34.

47. In 1991, the various tax regulations were consolidated into one new law specifying unified tax rates for all foreign-funded firms. See “Zhonghua renmin gongheguo waishang touzi qiye he waiguo qiye suodeshui fa” (“Income Tax Law for foreign-invested enterprises and foreign enterprises of the People's Republic of China”), in Laws and Regulations 1991, pp. 281–89. A, Timothy. Gelatt provides a detailed analysis of the effect of this law and its implementing regulations in “China's new tax law for foreign business,” East Asian Executive Reports (May 1991), pp. 9–14Google Scholar and “Foreign Business Tax Law: new implementing rules,” ibid (September 1991), pp. 9–13. Further tax reforms implemented at the beginning of 1994 unified the tax rates applicable to all foreign and domestic enterprises. Though the effect of these changes remains to be seen, the government has insisted that the overall tax burden on foreign-invested firms will not rise significantly. See “New tax system won't hurt foreign firms,” China Daily, Business Weekly, 23–29 January 1994, p. 1.

48. See Article 15 of “Regulations to encourage foreign investors,” p. 233.

49. “Guanyu jinyibu luoshi waishang touzi qiye yongren zizhiquan de yijian” (“Opinion on further implementing the employment autonomy of foreign-invested enterprises”), in Wang, Jianxin (chief ed.), Zhongguo laodong nianjian 1988–1989 (Yearbook on Chinese Labour 1988–1989) (Beijing: Zhongguo laodong chubanshe, 1991), p. 375.Google Scholar

50. State Statistical Bureau (comp.), Zhongguo tongji nianjian 1993 (Chinese Statistical Yearbook for 1993) (Beijing: Zhongguo tongji chubanshe, 1993), p. 647.Google Scholar

51. Official sources claim that over 1,800 such zones had been established by October 1992, causing the central authorities to warn of “zone overheating” and to crack down on their further growth. “Zone overheating poses policy woe for state planners,” China Daily, 2 March 1993, p. 4.

52. Statistical Yearbook for 1993, p. 647.

53. “Woguo sanzi qiye huode changzu fazhan” (“Our country's foreign-funded enterprises gain rapid development”), Jingji cankao (Economic Reference), 24 January 1992, p. 1.

54. At the end of 1992, Shanghai became home to China's second joint venture bank and announced approval for another 20 outside-funded financial institutions. “City welcomes its first joint venture bank,” China Daily, Shanghai Focus, 15–21 November 1992, p. 2. Meanwhile, the State Council has offered incentives to attract foreign investment into tourist sites. “Overseas funds OK for resorts,” China Daily, 26 October 1992, p. 3.

55. Statistical Yearbook on Labour 1993, pp. 394–97.

56. See “Joint ventures to come under closer scrutiny,” China Daily, Business Weekly, 6–12 December 1992, p. 1.

57. “Foreign-funded shams work profit magic,” China Daily, 14 November 1992, p. 4.

58. Wudunn, Sheryl, “Booming China is dream market of West,” New York Times, 15 February 1993, p. A6.Google Scholar

59. This information was obtained through interviews with knowledgeable economists at Chinese Academy of Social Sciences (CASS) in Beijing.

60. “PRC labor update: China's system makes hiring tough,” Business China, 16 July 1990, pp. 102–103.

61. One manager of a joint venture in Guangzhou, whose operations require extremely hygienic conditions, explained that his company was uncomfortable hiring workers from the countryside who tended to be less careful and to maintain lower standards of personal cleanliness than urban residents. Interview in November 1992.

62. Foreign managers of “sanzi” businesses now realize how critical the provision of housing is to their ability to retain valued workers. One large joint venture in Beijing found that employees kept leaving despite large salaries. Only after the venture invested in housing facilities did the situation improve. Interview with a joint venture manager in November 1992.

63. Determining just what foreign-funded firms should pay their employees has always been a sensitive matter. Two informative articles explaining the issues involved are: Horseley, Jamie P., “Chinese labor,” The China Business Review (May-June 1984), pp. 16–25Google Scholar and Cohen, Jerome Alan and Harris, Charles H., “Equal pay for equal work,”Google Scholaribid (January-February 1986), pp. 10–13.

64. Most “sanzi” firms have had experiences bearing witness to the stiff competition for skilled workers. One joint venture in Guangzhou lost a valued human resource officer after she happened to see an advertisement for a similar position at McDonalds offering twice her current salary. Once in her new position, she lured many other former colleages over to McDonalds as well. Interview with joint venture manager in November 1992.

65. The representative offices of foreign companies are required to recruit Chinese staff through the Foreign Employee Service Corporation (FESCO), whereas embassies are supposed to hire through the Diplomatic Service Bureau. In both cases, the intermediary organizations keep between 55 and 80% of the wages paid by foreign employers. The extent of extra wages paid to supplement employees’ salaries is exemplified by the case of a skilled secretary who left her job at a foreign non-profit organization (where she had earned 800 yuan a month) to work for a foreign company. Since FESCO takes 1,800 yuan of her now 2,500 yuan salary, the company privately pays her an additional 1,800 yuan. Interview in October 1992.

66. A translated version of the 1978 Constitution may be found in Joseph, En-Pao Wang (ed.), Selected Legal Documents of the People's Republic of China: Volume II (Washington, D.C.: University Publications of America, Inc., 1979).Google Scholar Article 5, recognizing the existence of grtihu, is on p. 134.

67. “Zhonggong zhongyang zhuanfa quanguo jiuye huiyi wenjian ‘Jinyibu zuohao chengzhen laodong jiuye gongzuo’” (“The Central Committee of China's Communist Party transmits a document from the national employment conference: ‘Go a step further in doing well labour employment work'”), in Yearbook on Labour and Personnel 1949–1987, pp. 1603–04.

68. “Guowuyuan guanyu chengzhen feinongye geti jingji ruogan zhengcexing guiding” (“Some policy regulations of the State Council on the urban non-agricultural individual economy”), in Documents on Reform 1978–83, pp. 629–630.

69. Legislative Affairs Bureau, State Council (comp.), Zhonghua renmin gongheguo fagui huibian 1982 (Compilation of Laws and Regulations of the People's Republic of China 1982) (Beijing: Falu chubanshe, 1986), pp. 1—42.Google Scholar Article 11, providing that the state “protects the lawful rights and interests of the individual economy,” is on p. 8.

70. These changes were outlined in “Guowuyuan ‘Guanyu chengzhen feinongye geti jingji ruogan zhengcexing guiding’ de buchong guiding” (“Supplemental regulations to the State Council's ‘Some policy regulations on the urban non-agricultural individual economy’”), in Documents on Reform 1978–83, pp. 645–46.

71. Gold, “Urban private business,” p. 164.

72. “Zhonggong zhongyang guanyu jingji tizhi gaige de jueding” (“Decision by the Central Committee of the Chinese Communist Party on reform of the economic structure”), in Handbook on Reform, p. 12.

73. For more details on media promotion of the individual economy see Young, “Wealth but not security,” pp. 126–28.

74. “Zhonghua renmin gongheguo xianfa xiuzhengan” (“Amendment to the Constitution of the People's Republic of China”), in Legislative Affairs Bureau, State Council (comp.), Zhonghua renmin gongheguo fagui huibian 1988 (Compilation of Laws and Regulations of the People's Republic of China 1988) (Beijing: Falu chubanshe, 1990), p. 1.Google Scholar

75. “Zhonghua renmin gongheguo siying qiye zanxing tiaoli” (“Provisional Regulations of the People's Republic of China on Private Enterprises”), in ibid, pp. 911–921.

76. “Siying qiye laodong guanli zanxing guiding” (“Temporary regulations on labour management in private enterprises”), in Yearbook on Labour 1988–1989, pp. 384—86.

77. “Protection for private business,” China Daily, 28 February 1991, p. 4.

78. See “Guojia tiaozheng siying qiye shuishou zhengce” (“The state adjusts tax policy for private enterprises”), Renmin ribao, 16 March 1991, p. 2; “New management rules set,” China Daily, 23 April 1991, p. 1; and “Co-operation needed on jobs in region,” China Daily, 1 May 1991, p. 4.

79. See, for instance, “Jimo geti shuishou liannian zengzhang” (“Tax revenues from individual [businesses] in Jimo rise for many years running”), Renmin ribao, 21 October 1991, p. 2 and “Geti laodongzhe xiang zaiqu juankuan sanqian wan” (“Individual labourers contribute thirty million [yuan] to disaster areas”), Jingji ribao, 25 September 1991, p. 1.

80. “Beijing encourages more people to run their own business,” China Daily, Business Weekly, 9–15 August 1992, p. 3; “Policies set to favour private economies.” China Daily, Shanghai Focus, 21 June 1992, p. 3; “Guangzhou geti siying qiye shangle ‘kuai chedao’” (“Guangzhou's individual and private enterprises get on ‘the fast track’”), Jingji cankao, 25 June 1992, p. 1.

81. “Private businesses to play a bigger role,” China Daily, 21 October 1992, p. 1.

82. Earlier, the maximum permitted yearly salary was 10,000 yuan. This information came via an interview in November 1992 with a manager at Beijing's Nande Economic Group, one of China's largest and most profitable private businesses.

83. In Shenzhen, for example, countless geti restaurants clearly hire upwards of ten employees. Shenzhen Labour Bureau officials admitted during interviews in November 1992 that they paid little attention to the number of employees in geti businesses as long as they maintained orderly operations.

84. “CPPCC gives voice to private sector of the economy,” China Daily, 3 March 1993, p. 4.

85. Statistical Yearbook for 1993, pp. 22–24, 27.

86. Statistics for Beijing indicate that in 1980, retired workers, idle persons and unemployed youths made up 53.0%, 42.7% and 4.2% of the getihu labour force, respectively. In 1985, the relevant proportions nation-wide were 6.3%, 67.0% and 25.7%, while in 1991, they were 8.0%, 56.0% and 24.0%. Data for the first two periods are from Chen Jian, “Laodong jiuye youxiao tujing” (“An effective way to increase employment”), translated in Stanley, Rosen (ed.), “The private economy (Part I),” Chinese Economic Studies, Vol. 21, No. 1 (Fall 1987), p. 50Google Scholar and State Administration for Industry and Commerce (SAIC) in Rosen, (ed.), “The private economy (Part II),” ibid., Vol. 21, No. 2 (Winter 1987–1988), p. 120.Google Scholar Data on 1991 was obtained in an interview with SAIC officials in September 1992.

87. See the results of a 1991 survey cited in “Job preference,” China Daily, 21 October 1991, p. 6.

88. Beyond the impressionistic and anecdotal evidence of this trend, a survey carried out in late 1987 in Beijing found that 25% of all private ventures with hired labour were owned by people who had quit or resigned their state sector jobs or had left their former employer while officially retaining their job (through an arrangement known as tingxin liuzhi, stopping wages but maintaining the position). See Research Office of the Beijing People's Government and Beijing Municipal Labour Bureau, Beijing chengzhen de siren gugong (Urban Privately-Hired Labour in Beijing) (Beijing: Beijing jingji xueyuan chubanshe, 1989), p. 5.Google Scholar

89. See ibid pp. 5–9.

90. A major nation-wide survey carried out in spring 1993 found that at least 25% of private firm owners have an above-high school education. This compares with 8.6% of state enterprise employees in industry and construction in 1990 (the only sectors and the last year for which figures are available). Of the 134 entrepreneurs surveyed, 43% had previously been employed in a state enterprise or agency, 29% had come from a collective enterprise, and 5% had retired or been unemployed. At least one-third had overseas ties. Horizon Market-Research, Inc., “Yanjian jingcao bi cangsong: 1993 dalu daibiaoxing siying qiye fazhan zhuangkuang diaocha baogao” (“Pine-like grasses among the rocks: a survey report on the development conditions of representative private enterprises on the [Chinese] mainland in 1993”) (unpublished report, May 1993), pp. 5–8. The figure on state enterprise workers is from State Statistical Bureau and Ministry of Labour (comps.), Zhongguo laodong tongji nianjian 1991 (Statistical Yearbook on Chinese Labour 1991) (Beijing: Zhongguo laodong chubanshe, 1991), p. 51.Google Scholar

91. Some private firms involved in highly technological areas hire primarily college graduates, but other ventures may have certain requirements as well. One owner of a decorating company in Sichuan province, whose workers were mainly from the countryside, claimed he only hired people with a high school education because they were more capable and reliable. Interview in Chengdu in November 1992.

92. This is indicated by numerous recent surveys. See Privately-Hired Labour in Beijing, pp. 3,193 and 210 and Horizon Market-Research, Inc., “Survey report on private enterprises,” p. 30.

93. In 1980, the provinces of Guangdong, Shandong, Henan, Sichuan and Liaoning together accounted for 48.4% of all persons employed in getihu. In 1992, Guangdong, Liaoning, Heilongjiang, Anhui and Sichuan provinces together claimed 35.9% of such employment. Neimenggu, Shanxi, Shaanxi, Xizang, Gansu, Qinghai, Ningxia, Xinjiang and Yunnan provinces increased their collective share from 8.2% to 14.4% over this period. Figures for 1980 are from State Statistical Bureau (comp.), Zhongguo laodong gongzi tongji ziliao 1978–1987 (Statistical Materials on Chinese Labour and Wages 1978–1987) (Beijing: Zhongguo tongji chubanshe, 1989), p. 99.Google Scholar Those for 1992 are from Statistical Yearbook on Labour 1993, p. 411.

94. Such problems have been highlighted in numerous surveys and studies. One early example is a 1981 survey analysed in Zhang Hao, Chen Jian and Fang Kuan, “Beijing shi chengqu qingnian congshi geti jingying qingkuang de diaocha” (“Survey of conditions among youth in the individual economy in Beijing's urban districts”), in Youth Labour Research Office, Institute of Youth Research, Chinese Academy of Social Sciences (ed.), Qingnian jiuyede tansuo yu shixian (Exploration and Practice of Youth Employment) (Beijing: Shehui kexue chubanshe, 1983), pp. 257–269.Google Scholar See in particular pp. 267–69.

95. Continued criticism of such discrimination attests to the severity of this problem. See, for example, “Siying jingji: zhengce goujia youdai wanshan,” (“Private economy: policy construction awaits perfecting”), Jingji ribao, 18 April 1993, p. 5. Such harassment appears endemic in reforming socialist economies. Private entrepreneurs in Russia complain of very similar treatment. See “The young take off in business,” The Moscow Times, 18 June 1993, p. 1.

96. Such actions have frequently been justified by the official policy of ”appropriate development” of the private economy. One municipal government in Hunan, for example, interpreted “appropriate development” to mean a maximum of four individual enterprises. “Shehui xuyao jiu shi shidang” (“What society needs is appropriate”), Renmin ribao, 29 June 1988, p. 2.

97. Many instances of such behaviour are described in “Zijude laoda” (“Posing as Big Brother”), Renmin ribao, 10 July 1984, p. 2.

98. China Market Survey Group, “The tough problems of ‘big money',” pp. 6–7.

99. A typical example is that of a large company in Shenzhen specializing in real estate speculation. This business is nominally the progeny of two state agencies in Beijing, which in turn receive a share of the company's substantial yearly earnings. Interview with a high-level employee of the company in Shenzhen, December 1992.

100. This phenomenon was described by an economist at CASS who has extensively researched reforms in the state sector.

101. In the past, all rural workers were excluded from urban private employment data, but sources at the State Statistical Bureau and the Ministry of Labour claimed in the summer of 1993 that rural labourers employed by urban siying qiye are now included.

102. Interview with SAIC officials in September 1992.

103. See, for instance, Beijing Municipal Government Office, “Beijing shi geti gongshangye fazhan qingkuang de diaocha” (“Survey of the development conditions of individual industry and commerce in Beijing”), in Survey of the Individual Economy, p. 13 and Shanghai Municipal Administration for Industry and Commerce, “Shanghai shi geti gongshangye fazhan zhuangkuang de diaocha” (“Survey of the development conditions of individual industry and commerce in Shanghai”), in ibid p. 21.

104. See Horizon Market-Research, Inc., “Survey report on private enterprises,” p. 13. The survey found that siying qiye under-report their labour force by 40%.

105. See Privately-Hired Labor in Beijing, pp. 3, 193, 210. Another survey conducted in 1985 in Chongqing, Sichuan province, found that approximately 70% of all hired employees in getihu and siying qiye were from rural areas. Chongqing Municipal Administration for Industry and Commerce, “Chongqing shi geti gongshangye diaocha” (“Survey of Individual Industry and Commerce in Chongqing”), in Survey of the Individual Economy, p. 98.

106. See the notes to Table 3.

107. See Wudunn, Sheryl, “China taking a harsh line with vendors,” New York Times, 16 November 1989, p. A6.Google Scholar

108. See, for example, McMillan, John and Naughton, Barry, “How to reform a planned economy” (unpublished mimeo, 1991) andGoogle ScholarChen, Kang, Jefferson, Gary and Singh, Inderjit, “Lessons from China's economic reform,” Journal of Comparative Economics, Vol. 16, No. 2 (1992), pp. 201–225CrossRefGoogle Scholar, both cited in Woo, Wing Thye, “The art of reforming centrally-planned economies: comparing China, Poland, and Russia” (paper presented at the Conference on the Transition of Centrally-Planned Economies in Pacific Asia, in San Francisco, May 1993).Google Scholar