Essay On Liberalisation
Managers were still required to meet the objectives in the Plan before they could exercise this discretion, however.
The second phase of industrial reform started in 1983 and ended in 1987 and completely severed the role of ministries as appropriators and devolved this power to the enterprise managers in toto.
Henceforth, enterprises were to finance their own investments and other costs, primarily by borrowing from state controlled banks.
Nicholas Lardy and others have pointed out that this transition to enterprise autonomy was not as complete as it would seem on the surface.
It has also been marked by the growing importance of share ownership, in general, with many shares of state-owned firms having been floated on financial markets and more planning to go that route.This leadership has experienced the problems that come out of a command and control allocation system --- severe imbalances between supply and demand, lackadaisical managers, low quality output, stagnation in technological invention and innovation, low worker productivity and morale, etc.The best way to understand the current generation of pragmatists is to recognize that they think like engineers (and in some cases were educated as engineers).The increasing importance of shareholding in the Chinese economy has buoyed the hopes of those promoting neoliberal strategies of development that China will, even if only gradually, follow the path of other so-called transition economies in adopting a fully "liberalized" economy.Did this era of reforms in rural and urban China, the "Four Modernizations Era," represent a displacement of Marxism by neoclassical/neoliberal economic thought in China?
The state simply taxed enterprises, rather than directly appropriating enterprise surplus value.