Township and Village Enterprises in China

Abstract

Township and Village Enterprises (TVEs) have played a significant role in the growth of the Chinese economy since the economic reforms of 1978. This paper analyses the productive efficiency of a cross section of TVEs in the manufacturing sector, and compares them with those for state-owned enterprises (SOEs) and major international competitors of TVEs. TVEs are found to be much more efficient than comparable SOEs. They are also competitive in the international markets. Their management which responds to market forces and their outward-orientation have contributed to their productive efficiency. The performance of TVEs suggests that efficient management, which successfully exploits the endowments and resources of the country rather than the nature of ownership of production entities, is crucial to the success of manufacturing firms.

Rural-to-urban migration, human capital, and agglomeration

“…In China, the township and village enterprises (TVEs) have played a significant role in the country's economic growth since the early eighties. In 2000, for example, TVEs accounted for 47 percent of the total industrial output in China (Fu and Balasubramanyam, 2003), and the output value of TVEs has been far greater than the output value of agriculture. Yang andAn (2002), andYang (2004) show that education not only increases productivity in the nonagricultural sector in rural China, but that it also facilitates and encourages the relocation of productive inputs from agricultural to nonagricultural pursuits.…”

Beyond the Debates of Which is Best: Investigating the Complementarity of Chinese and Western Aid, and Possible Lessons from China’s Development

“…As there was no rule of law to protect property rights, and a socialist anti-private enterprise ideology was prevalent, TVEs, protected by local governments, were useful instruments to protect the interests of the collective (Qian 2003). TVEs were useful for local governments as they were a cheap and efficient means of gaining revenues (Qian 2003;Fu and Balasubramanyam 2003). Further, they also benefited the national government, as they provided higher revenues (Qian 2003).…”

The Dialectics of China’s Foreign Aid: Interactions Shaping China’s Aid Policy

“…The economy developed at a rapid pace, in part due to de-collectivization of agriculture, the introduction of the household responsibility system, the utilization of township village enterprises as transition institutions in the absence of political space for private enterprise, and fiscal decentralization (Fu and Balasubramanyam 2003;Lin and Liu 2000;Oi 1992;Zhan 2009). However, by 1989, the economy had become overheated (Zhao 1993).…”