Private sector development

There is a widespread belief that the unprecedented pace and duration of China’s economic growth is because China has developed a unique model of economic growth. This model is variously referred to as ‘state capitalism’, ‘authoritarian capitalism’, ‘corporate Leninism’ or ‘regulatory capitalism’ (McGregor 2012: 31). Those who believe that China has developed a unique economic model do not dispute the view that markets and private enterprise have come to play a substantially more important role since economic reform began in China in 1978. They acknowledge that reforms in the countryside in the first half of the 1980s effectively converted collective farming into private agriculture. They recognise that the state has largely abandoned its once pervasive control of prices in favour of market-determined prices for all but a few goods and services. And they concede that large parts of China’s manufacturing industry, particularly consumer goods, are produced in private factories and distributed through wholesale and retail networks that are mostly privately owned and operated. And, of course, observation confirms that privately owned and operated hotels, restaurants and some other types of service firms have become pervasive in urban China.