Socialism + the market: A problematic formula for management and labor reform in China's state-owned enterprise

In 1987, at the 13th congress of the Communist Party, post-Mao leaders made public their decision to gradually let go of control over state enterprises. Their voluntary reduction of Party authority in state firms was meant to decrease the ideological volume of discussion on industrial development and to replace political decision-making in state enterprises with the impersonal "market mechanism." Their ultimate purpose was to improve the low efficiency and productivity of state enterprises.;This effort to depoliticize and decentralize decision-making and management of the public industrial sector has, however, proved ineffective. Nearly ten years after the Party's 13th congress, state firms have yet to be transformed into corporations that are responsible for their own profits and losses. Reform policies and procedures have also failed to provide adequate scope to the execution for the manager responsibility system. Contrary to the progress made in the private sector, reforms in state enterprises have in fact come to a standstill and so has the evolution of the anticipated "socialist market economy.".;This dissertation shows that a fundamental reason for the impasse lies in the fact that post-Mao leaders, while attempting to amend China's socialist order with proven methods of market economies, have shied away from the challenge of establishing a conceptual platform for reconciling Marx and Mao with Adam Smith. Instead, they have resorted to a more convenient program, namely, "separating the Party and government," or, more accurately, separating politics and economics. With this separation scheme, they have maintained the conventional discourse on socialism and meanwhile appropriated a separate discourse which represents economic policies and actions as politically innocent events that are directed only by the "invisible hand" of the market and the "inviolable" economic "laws." Yet a reform rhetoric which continues to honor Marxist socialism as its framework does not allow government agencies, enterprise managers, or workers to perform in ways required by the market. Until a legitimate reconciliation is conceptualized by post-Mao leaders, "socialism + the market" will remain a problematic formula for reform.