Privatization in China

Introduction

The privatization reform of China during the past 25 years has brought about tremendous changes to its social and economic life. With the rapid growth of the economy, the proportion of private ownership in the national economy is also growing very rapidly. At the beginning of the 1980s, state ownership dominated the national economy absolutely; then the private ownership phased in, and is superseding state ownership. At the beginning of the 21st century, the private ownership has become an indispensable and significant part of the whole national economy. The nature of economic transition is by resorting to privatization to promote the economic development, and thus realize the transition from planned economy to market economy. Therefore, a very important determinant of economic performance is the ownership of enterprises (www.ucm.es). Then, in the Chinese economy, are there any performance differences among different ownership or organizations with different property rights arrangements? What effects of the privatization on economic performance and to what extent? And how large is the development potential and room of privatization?

This study will give corresponding answers to these questions by testing the empirical data (knowledge.wharton.upenn.edu). The result will be relevant to the issue that how to evaluate the privatization effect of the Chinese industrial and infrastructural sector, and to the issue that how to understand the development trend of the privatization in China, thus it has significant policy and practice implications. The data has been collected that provides us with relatively good data, which enables us to examine the performance difference and related determinants from the scope of the whole nation and perspective of the whole industrial sector. Consequently, our empirical study has a more comprehensive perspective than some studies based on partial sample investigations, and our analysis result has more general significance. This study utilized the data, and the data provide the basic information of all legal person units. Although the information contained is limited, the number of units contained is the most complete, and it almost includes all the legal person units of the whole country. In this huge database, the nature of different sectors varies (AMSDEN and ZHANG, pp. 273-86). It includes such sector as agriculture, geology and water resources, transportation, post and telecommunications, finance and insurance, real estate, culture, health, and sports etc...

Discussion

Among these, some sectors still remain high proportion of state ownership and have not experienced (or just experienced in a limited scope) privatization reform due to the nature of these sectors. Therefore, according to the main purpose of our research, we select the industrial sector as our study object, which has experienced the most extensive privatization reform. We start the concrete analysis from the ownership classification of enterprises. We adopt the current enterprise registration classification stipulated by the State Statistical Bureau as the ownership type, based upon it, we can get enterprises with different types of ownership, and construct an empirical model on Chinese economy, then test the different effects of ownership on efficiency (knowledge.wharton.upenn.edu).

In this paper, we classified the ownership ...