Economic Analysis On The Ownership Structure Chang Of The Collective TVEs

Focusing on the ownership structure change in China, the paper explores the rationality of the phenomena in the economic methods. Since the announcement of China's 'open door' policy in 1978, the growth in Township and Village Enterprises (TVEs) output and employment has been extraordinary. This attracts more positive responses from me scholars at home and abroad, and governments in all levels have prided themselves on such achievements. Since 1990's, the ownership structure has been changed. Many are puzzleed why the local government, who benefits much from the TVEs, doesn't orevent the reform: they even promote positively the reform instead. The question nas been raised why the government would abandon the benefit achieved arid promote the reform, which is similar to privatization? And the question whether the ownership structure reform is accordant with the reform of China needs to be answered further. Such answers will be helpful to the reform of State-owned Enterprises, the economic development and transition, and will enrich economics theories and sample materials.After reviewing previous research documents, the paper analyzes the logicality and inevitability of the reform from the viewpoint of the macroeconomics. Starting from the industrialization theory and by using description, comparison and integration, the paper examines the tendency of industrialization strategy and ownership structure reform in the long term. The research proves finally that the TVEs reform is one of adaptations to the environmental changing of the market and micro-policies and to the logic of the whole reform in China.The rationality of the reform is identified from the viewpoint of finance andburden of TVEs. On the basis of stock asset and flow asset, the paper finds that the development of TVEs has been restricted by the lack of capital before ownership structure reform. There is a large gap between demand and supply in stock asset and flow asset and there is obviously asymmetric between the outputs and inputs in TVEs. The premise for TVEs to get the external capital is to adjust the ownership structure. The TVEs reform is a logic necessity to make up the capital gap between demand and supply. The analysis on the burden of supporting agriculture, interest and folk collect money shows that the reform would alleviate the burden of TVEs and would break down the burden relation between the government and TVEs. It is the motivation of breaking down the burden relation that encourages the government to promote the reform and it is the motivation of alleviating the burden and improving the market competence that encourages the enterprises to carry on the reform in large areas.By using the statistic analysis, the paper tests the hypothesis of the rationality of the action of the government who is closely related to the development and reform of TVEs. After exploring the components of government revenue, the paper finds that the increasing proportion of non-community capital is concomitant with the increasing of government revenue. However, the components of government revenue are varying in different directions. Specifically the higher the ratio of private capital to the total capital, the higher the tax income, the higher of the ratio of private capital to the total capital, the lower the profit income. Further statistic test research with the index of Government Choice Index (GCI) indicates that the increasing of the tax income could compensate the decreasing of the profit income and the government would benefit from the TVEs reform. It is obvious that the action of the government in the TVEs' reform can be explained by its objective of pursuing the revenue maximization.TVEs' transformation can also have the effect of Pareto improvement on its efficiency. By using Cobb-Douglas production function, the paper investigates the movement of TVEs' efficiency change during the transition period. The result shows that the transition does make the efficiency improve. In south part of Jiangsu province, TVEs' efficiency increases...