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Beyond the Property Rights Approach: Welfare Policy and the Reform of State‐Owned Enterprises in China
Author(s) -
Gu Edward
Publication year - 2001
Publication title -
development and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.267
H-Index - 93
eISSN - 1467-7660
pISSN - 0012-155X
DOI - 10.1111/1467-7660.00199
Subject(s) - marketization , china , welfare , welfare reform , business , market economy , autonomy , revenue , government (linguistics) , state (computer science) , property rights , economics , economic policy , finance , political science , law , linguistics , philosophy , algorithm , computer science , microeconomics
During the pre‐reform era, Chinese state‐owned enterprises (SOEs) operated not only as firms, but also as mini‐welfare states, providing employees with lifetime employment, inexpensive housing, free health care, and pensions. Since China’s market transition began in the late 1970s, however, SOEs have had to bear increasingly heavy burdens for welfare provisions to their employees. The steep increase in welfare spending has not only eroded the base of state revenue, but has also impeded further SOE reforms. To lighten welfare burdens upon SOEs and to remove institutional obstacles to marketization and privatization embedded in the existing welfare system, the Chinese state has imposed many welfare reforms aimed at shifting responsibilities for welfare provision from SOEs to a combination of government, enterprises, communities, and individuals. This article examines the belated welfare reforms in China’s state sector and their impact upon the reform of SOEs. It finds that reform implementation has been sluggish. To achieve the policy goal of welfare reforms, high degrees of state autonomy and capacity are needed.