Organizer: R. Bin Wong, University of California, Irvine
Chair: Mary B. Rankin, Independent Scholar
John Kao and Anchi Lin Harvard University
The free market economy with variations in various forms has flourished since late seventeenth century. In recent decades, the world has witnessed the surging growth particularly in the Pacific Rim countries. Yet, free market system alone does not necessarily bring economic prosperity. Other factors such as advanced production technology, new streams of global economic opportunities, and the ability to organize productive labor forces are also crucial to economic growth. Among all these factors, the existence of entrepreneur plays a key role in connecting all the favorable elements, creating new possibilities, and making things happen.
In the midst of such rising Pacific economic strength, different groupings are formed based on levels of economic development, political differences, and ethnic connections. The Japanese, the Chinese, the Korean, and that of the ASEAN links. Among which the central focus of this article is the Chinese economic realm which is a rightly emergent and rapidly expanding realm that knows little limits.
The emerging economic energy of such a Chinese based economy presents itself both as a surprise and a confusion to the Western observer. It is a surprise because the Old Orient used to be considered by Western scholars as a place without either the structural features nor the spiritual drive for a dynamic economic system such as capitalism to flourish. It is a confusion (or People are confused) due to the fact that the social and cultural attributes which used to be regarded as obstacles to economic development are now being given credit. The appearance of such surprises and confusions therefore demands further research into the phenomena.
If we investigate the changing world economic map in terms of different levels of economic performances in the past few decades, one will no doubt find that the rise of the Pacific regime countries is the most striking one. The striking phenomenon makes us wonder: what are the major forces behind those economic miracles created by these Asian countries? Is it the free market system? Is it the timing? Or is it the people?
The more we look the more we realize that this is a multinational phenomenon which is yet to be well described. The whole notion of Chinese based economy is a much bigger phenomenon than we understood. We intend to demonstrate in this article the exciting emergence of a Chinese based economic reality and the major actor in such a newly unfolded drama: that of the Chinese entrepreneur.
Based on a 20 month long study supported by the Business School of Harvard University, Chinese Entrepreneur in Global Perspective, we are able to derive a more realistic understanding of the Chinese entrepreneur. Traditionally, Chinese entrepreneur has been hidden and not well understood perhaps because Chinese orientation of secrecy and keeping a low profile. Through our study we can, for the first time, bring to light the picture of the Chinese entrepreneur in terms of their general practices such as what motivates them, what their management styles are, and how the cultural and social attributes work in their everyday practice of business. From the study, we are also able to discuss the common challenges and dilemma that they face, which include issues of growth, internationalization, remaining competitive, and family style vs. professional style management, etc. It has only been recently that is possible to do this kind of study because greater availability of information. It was our desire to use this study to improve the current practices of Chinese entrepreneurs. By identifying the problem, we hope to conceptualize some practical tools for Chinese entrepreneurs.
Julia Sensenbrenner, Johns Hopkins University
This paper examines labor reforms in state enterprises in Shanghai to consider what factors have been critical in shaping the outcome of these reforms. The author finds that while the broader structure for the recent round of labor reforms in state enterprises was set through government directives and well publicized models, individual factories have determined the actual patterns of change through managerial decision making on how to implement labor reforms. Choices by management are influenced by a variety of market forces, including some industry specific patterns, and the patron client relationship that was established in state enterprises where employees generally had life time employment. At the same time, relaxed social controls, an expanding labor market, and changing attitudes toward jobs have given employees more choice regarding employment, which has increased mobility for some groups and affected operations at some enterprises. The author contends that these results demonstrate the need to expand analysis of the dynamics of market reform in former state socialist countries to move beyond a bi polar consideration of the role of the state and bureaucratic organizations versus the growing importance of market forces. A theory of market transition must also incorporate the critical elements of social structure and industrial organization.
Fei Ling Wang, Georgia Institute of Technology
A gradual but sustained marketization is widely believed to be the explanation for the impressive economic development in contemporary China. Both the introduction and the distortion of the market are clearly seen. The distortion aspect of the Chinese marketization especially the positive consequences of it, however, has been under exposed in the literature.
Conceptually, two forces are identifiably responsible for the distortion of the market in a developing country: the state power and the societal forces. Much has been said about the Chinese state and its role in "guiding" or distorting the market. This paper takes a different approach by analyzing the role of the society in distorting the market through an examination of the formation and function of a "Chinese style" labor market-the community-based labor markets. This unique pattern of labor allocation has many of the advantages of labor market, thus performs well in creating new jobs and increasing productivity, while inflicting only minimum cost to the political and social institutions of the PRC (People's Republic of China).
Along with the now standard argument emphasizing the role of the state, this paper concludes that the "right kind" societal distortions of the market have been crucial to the phenomenal development of Chinese economy and the seemingly puzzling stability of the PRC political system. Besides contending for the general "necessity" of market distortions in a developing and "socialist" nation, this paper calls for further studies on the significant role of social institutions in contemporary China.
Scott Wilson, University of the South
China specialists have devoted a great deal of time and energy to furthering our understanding of the rapid economic transformations in the Chinese countryside. We have a far less clear understanding of the interaction between those economic changes and social transformations in villages. This paper attempts to fill part of that intellectual gap, documenting the relationship between the current cash economy and horizontal social network formations in villages. It draws on extensive field interviews in two villages in Shanghai County conducted during 1991 and 1992.
This paper comments on a theoretical debate between proponents of market transition theory and local state corporatism. The former claims power resources have significantly shifted in marketized areas, and the latter argues local authorities maintain a great deal of control over the operation of local political economy. This paper claims that the expanding cash nexus provides a useful tool to dissect some of the economic changes occurring in villages with strong collective leadership, noting the significant income gains villagers have made since 1978. Growth of villager income has both stimulated and transformed mutual aid exchanges. Villagers have more money to give in the form of gifts and interest-free loans. The cash nexus and time constraints of industrial employment have also reduced the number of labor exchanges between villagers since the mid 1980s. Mutual aid exchanges remain an important element in the life course of village families and underscore the importance of horizontal exchanges.
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