The Making of the State Enterprise System in Modern China

When, how, and why did the state enterprise system of modern China take shape? The conventional argument is that China borrowed its economic system and development strategy wholesale from the Soviet Union in the 1950s. In an important new interpretation, Morris Bian shows instead that the basic institutional arrangement of state-owned enterprisebureaucratic governance, management and incentive mechanisms, and the provision of social services and welfaredeveloped in China during the war years 19371945. Bian offers a new theory of institutional change that explains the formation of Chinas state enterprise system as the outcome of the sustained systemic crisis triggered by the SinoJapanese war. This groundbreaking work combines critical analysis of government policies with case studies of little-studied enterprises in heavy industries and the ordnance industry. Drawing on extensive research in previously unavailable archives, Bian adds a valuable historical perspective to the current debate on how to reform Chinas sluggish and unprofitable state-owned firms.