The greatest economic challenge facing China in the post-Deng era is the reform of unprofitable, state-owned enterprises (SOEs) which threaten to drag down the rest of the economy. Despite an array of well-intentioned, market-oriented reform measures, these firms have never truly been forced to face the pressure of a bottom line, or the threat of bankruptcy. Forging Reform in China explains how and why these measures have not been sweepingly successful to date, and what it would take to achieve meaningful reform. The author investigates firm-level processes, including case studies of China's steel industry giants, revealing institutional and systemic barriers to market-oriented performance. This book makes a compelling argument that private ownership cannot work in China's current system until governance over complex economic factors has been established, that is, until credit is tightened and market selection processes made to work.
• Original, penetrating study on an extremely timely, critical topic which has great relevance for China's current and future economic performance (China's leaders announced it a top priority at the latest Party Plenum) • Successfully combines broad analytical framework with detailed case studies of China's steel giants, the particulars of which have not been published before in English • Of interest not only to scholars of China's economic transition, but to those concerned with economic transition in emerging socialist economies around the world
List of tables and figures; Preface; 1. Introduction: China's ailing state enterprises; Part I. Conceptual Approaches to Post-Socialist Enterprise Reform: 2. Property rights, privatization and the state-owned firm; 3. The nested problems dynamic: an alternative approach; Part II. Enterprise Case Studies: The Commanding Heights in Transition: 4. The living museum of iron and steel technology; 5. King of the red chips: Ma'anshan steel and the debacle of the 'public' SOE in China; 6. Shougang: the rise and fall of an industrial giant; Part III. Reassessing Chinese Patterns of Economic Development: 7. Extending the argument: budget constraints and patterns of growth in China; 8. Conclusion; Notes; Bibliography; Index.
'This is the most sensible and the scariest book on China's economic reforms that you will come across this year … His theoretical contributions to debate on the role of the state, ownership and regulation in transitional economies are also to be commended for their common-sense empirical grounding and clarity exposition … This book is required reading for anyone working on Chinese reforms or on reform in transitional economies generally. Even if they do not agree with Steinfeld's conclusions, they will have to address the arguments developed. I found it an enormously impressive and valuable piece of work.' The Times Higher Education Supplement
'… Edward Steinfeld, a professor at MIT's Sloan School of Business, offers compelling evidence that 'autonomy extended in the absence of functioning governance and hard budgets is a recipe for disaster … he examines the cases of three large steel companies that epitomise the almighty mess created after managers were given rights without responsibilities'. Wall Street Journal