Large firms and industrial reform in former planned economies: the case of China

Abstract

In China's industrial reform, alongside the much-studied dynamism of small industries, there has been a simultaneous powerful growth of large-scale state industry. State planning has played an important role in this process, through heavy protection from international competition and support for selected enterprises which it was hoped would benefit from economies of scale and scope. These enterprises have undergone gradual institutional change, with growing foreign investment, and slow movement towards multi-plant operation. This process is one in which there are emerging institutions resembling the modern business corporation, albeit with specific Chinese features.