The development of township, village, and private enterprises: Rural industrialization in China, 1979-1989

The development of rural community enterprises (township, village, and private enterprises) is a very important part of the economic reform in China since late 1978. It has significantly increased personal income among rural residences, improved the structure of rural economy, absorbed a large number of rural surplus labours, and made an increasing important contribution to the national economic growth.; With the decentralizing macro-economic policy and its cellular community characteristic, the community enterprises are deeply attached to the interest of the community as an economic unit. Local governments and local enterprises thus are very close and rely mutually. On the one hand, it followed the route of rural industrialization rather than urbanization. On the other hand, the community as a whole will face a rather harder budget constraint which changes the basic principle of enterprises management and that is extraordinary in the socialist economic environment.