226 SHI Jichun
2 Market-oriented reforms: Chinese enterprises win liberationduring the development of trade and capital relations
2.1 The situation before the reform and the reason for the reformThe Communist Party blamed the poverty and backwardness of recent China onthe oppression of
, thus the establishment of the People’sRepublic of China is synchronized to the nationalization of bureaucratic capital.In April 1949, Mao Tsetung drafted a
Notice of the People’s Liberation Armyof China
, declaring to confiscate the bureaucratic capital enterprises (MaoTse-Tung, 1991)
. By the end of that year, 2,858 industrial bureaucratic capitalenterprises had been confiscated, and the proportion of production value of stateindustrial enterprises to that of the whole industry (handicraft industry excluded)reached 34.7
(Zhu, 1985). At that time, over 1,000 enterprises in China wererun and owned by Western entrepreneurs, mainly by shareholders of the US andBritain
. Although these enterprises were not commonly taken over by the newstate, they were forced to close down, be purchased, expropriated or entrusted tothe government due to the drastic changes of political, social and economicenvironment.As for the native civilian capital and proprietors, purchase and cooperationwere also adopted so that the state-private enterprises and cooperatives took shape. The state-private enterprises, controlled by representatives of publicshares, were in fact state-owned enterprises. After the former capitalists took back all fixed dividends, these enterprises became state-owned enterprises. Dueto the inertia of revolutionary movement, the whole society pursued the principleof large in size and collective in nature
, and the cooperatives, named as collectiveenterprises, also followed the state-run mechanism by canceling shares, unifyingsalary standards, almost the same as state-owned enterprises.Under a “centralization mode”, the production and operation of enterprisesmust be subject to the state’s planning arrangement distributed from top to
Namely, imperialism, feudalism and bureaucratic capitalism. The bureaucratic capitalismmeans the capitalism with the ambiguity of of
cials and entrepreneurs, more harmful thanso-called crony capitalism.
“Bureaucratic capital” refers to those enterprises controlled in the name of state by eminent bureaucratic families, for instance, Chiang (Kai-Shek), (T V) Soong, (H H) Kong, Chen(Li-fu). The enterprises were usually economic vitals such as banks, large factories andinfrastructures. See Selected Works of Mao Tse-Tung (1991).
It means the larger scope and the more degree of public-ownership, the better.