China has had one of the highest growth rates in the world since the country in 1978 decided to modernize the centrally managed planning economy. Since 1978 and up to 2003, GDP at comparable prices, according to official figures, has doubled. During the same period, per capita GDP has grown by an average of 8.2 percent per year. In 2017, GDP grew by 6.9 percent.
With its size and rapid growth, China has become an economic powerhouse in the world. However, the country must still be considered among the developing countries. Although growth figures have been high, the Chinese economy is characterized by structural problems with unbalanced development, major regional differences, supply problems, inflationary pressures, corruption, weak legal protection, camaraderie and closed political processes.
China led after the founding of People’s Republic of centrally directed planning economy after Soviet style. During ” The Great Leap ” in 1958-1960 and the Cultural Revolution in 1966-1976, the country experienced severe setbacks.
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In 1978, a reform period began, introducing market economy reforms, so-called “socialism with Chinese features”. At the same time, the strict political control of the Communist Party was maintained. The reforms included “The Four Modernizations” in agriculture, industry, science and defense. Until 1990, direct foreign investment was gradually opened in selected industries in special economic zones and in selected cities. The first four zones were established at strategic points: Shenzhen at the Hong Kong border, Zhuhai at the Macao border, Shantou with cultural links to overseas Chinese in Southeast Asia, and Xiamen with cultural links across the Taiwan Strait.
The reform measures immediately led to rapid economic growth a few years until the end of the 1980s. After 1992, growth accelerated after new and far more profound reform measures were implemented. Among other things, privately owned enterprises were legitimized. The goal was a strong private sector under macroeconomic control, but where the political and social development should still be under the control of the Communist Party under the formula socialist market economy.
Gradually, three regional economic centers of power have emerged: Pearl River Delta (Zhu Jiangs) delta area from the 1980s, Chang Jiangs (Yangtsekiangs delta area) with Shanghai, southern Jiangsu and northern Zhejiang from the 1990s, and Bohai Bay with Beijing, Tianjin, Shandong and Liaoning from about 2000. Government investments are mainly focused on the construction of infrastructure and other building structures.
In an effort to channel growth from the coastal provinces to the middle and western regions, investment has been made inland. Among other things, the authorities have initiated the construction of the huge San Xia dam (Three Gorges Dam), which will have a negative impact on business in the upper and middle parts of the Chang Jiang Valley.
Among the most notable economic developments after 1978 is the growth and development of the service industries. Prior to being a priority, developments in the retail, banking, insurance, finance and hotel industries and the restaurant industry have been an important factor in the development of China as a modern country. Several of these service industries were previously virtually non-existent and are still in a development process to adapt to international standards and quality requirements.
China is traditionally a prominent agricultural country. In 2017, the agricultural sector accounted for 7.9 percent of GDP. The total cultivated area comprises approximately 16 percent (152 million hectares) of China’s land, while utilizable meadow and pasture area comprises 33 percent.
Agricultural production is adapted to the large variations in climate, water availability, soil and topography found within China’s borders. Among other things, agriculture is adapted to the country’s many climate zones; respectively from subtropical in the south to subarctic in the north, and from humid and watery in the east to dry in the west.
In the subtropical areas in the south where it is possible to cultivate the soil even in winter, three harvests per year are common. In temperate areas where agriculture is impossible in the winter, one has either one harvest per year or three harvests for each two-year period. In the humid areas, agricultural production is relatively stable. In the semi-arid areas, agriculture is unstable, while in the arid areas it is only possible with the help of irrigation systems. In the water-rich subtropical areas in the southeast, cultivation takes place in many places so intensely that there is almost talk of horticulture.
A large part of the country encompasses vast mountainous areas with steep slopes, thin soils and large elevation differences, and is only applicable to forestry and animal husbandry. In the arid and ecologically fragile areas of northwestern China and the high and arid Tibetan Plateau, which together comprise 55 percent of China’s land area, agricultural potential is very low. In addition, agriculture is frequently hit by natural disasters such as floods, typhoons, extremely cold winds (sometimes with sand or snowstorms), warm winds and hailstorms. Agriculture is also limited in many places by increasing alkalization of the soil.
A major divide between northern and southern China runs along the Qinling Mountains and Huaielva (Huai He). Unlike agriculture north of the dividing line, agriculture in the south is characterized by extensive wetland cultivation. The main agricultural areas are concentrated to river plains along the lower part of Chang Jiang and its delta regions, to the North China Plain (also called Huang-Huai-Haisletta after the rivers crossing it) in eastern China, and to Song-Nensletta and Liaohesletta (combined also called the Man-Jurassic Plain) in Northeast China.
Other important agricultural areas in northern China are areas along the central Huangel River (Huang He) such as Guanzhongsletta in Shaanxi, Hetaosletta in Inner Mongolia and the Yinchuan Plateau in Ningxia. All of these are partly dependent on artificial irrigation. The wetland areas are mainly found on the river plains along the middle and lower parts of Chang Jiang including the Yunmeng plain north of Dongting Lake, the plains around Lake Poyang, Lake Tai (Tai Hu), Chaos Lake (Chao Hu), the Chang Jiang Delta area, the Chengdu Valley in the Sichuan Basin and along the Sichuan Basin in Southeast and South China.
China can be divided into nine agricultural regions, each with its own distinctive features: Northeast China is primarily a rich forestry area, but in recent times there has been significant new cultivation for grain production. In Inner Mongolia and along the Great Wall, the environment is vulnerable. However, there are extensive grasslands where both agriculture and livestock are practiced. Animal husbandry is significant over most of this region.
The North China plain is an important grain and cotton producing area. However, the region is plagued by frequent floods and droughts as well as ever-increasing salt content in the lowest-lying areas. The Loose Plateau (Shanxi, Shaanxi and Gansu) is characterized by severe erosion problems caused by loose soil. Here, special grains, other than rice and wheat, are grown, which are more resistant to drought.
Central China with the areas along the middle and lower parts of the Chang River (Chang Jiang) has very good conditions for agriculture, forestry and fishing. Here, inter alia, grains are grown in intensive agriculture. The Yunnan-Guizhou Plateau in the southwest has a poorly developed economy, but is an important timber and grain producing area. Here the land is cultivated in the mountain valleys and on high plains (bazi).
Southern China with parts of Fujian, Guangdong, Guangxi, Yunnan and Hainan has surplus water and heat. Here, subtropical and tropical plants are grown. However, land resources are scarce and the region is not self-sufficient in food. Northwest China (Gansu, Xinjiang and western Inner Mongolia) has dry climates, large desert areas and high mountains. Cultivation of the land here can only take place with artificial irrigation from oases. Traditional herding of cattle is the dominant activity in this region.
The Tibetan Plateau (Tibet, Qinghai and Western Sichuan) has high tundra landscapes. Here, cultivation takes place only on small terraces in river valleys. Herding of cattle as well as harvesting is the most important agricultural activity.
Organization and development
In 2019, the rural population comprises approximately 40 percent of the total population. The labor force is NOK 806 million, of which 27.7 percent is employed in agriculture (2016). It is estimated that agriculture has an over-employment of about 150 million, with China having a significant potential unemployment problem.
Many farmers have had to find alternative ways to earn income. Since the early 1990s, there has been a significant migration from the countryside to the cities to seek employment. The largest migration is from Sichuan, Henan, Anhui, Hunan and Jiangxi, and most travel to the coastal provinces of the east and south. In the poorest agricultural districts, which mainly include Yunnan, Guizhou, Ningxia and Gansu, the rural population is less mobile.
To seek to absorb the surplus population in the countryside, the development of so-called “village enterprises” has intensified; Chinese xiangzhen qiye, English Township and Village Enterprises (TVE). In 2003, these companies employed a total of 136 million people. Most TVEs are collectively owned, and many use simple technology in various activities, such as processing of agricultural products and production of consumables. Most successful are these enterprises in the coastal provinces of the east.
Before the communist takeover of power in 1949, landlords and wealthy peasants, who made up less than 10 percent of the people, owned more than 70 percent of the land. During the first phase of land reform that began in 1950, the peasants were first organized into mutual aid associations, later in agricultural cooperatives. The earth was still in private hands, but was operated on a common basis.
During ” The Great Leap ” in 1958, the peasants were organized in about 24,000 local communities, each of which included 5,000 to 10,000 families living in villages. In 1961–1962, the municipalities were reduced in size, and the number increased to about 56,000. Management was decentralized by delegating more responsibility down to the subdivisions, 710,000 production brigades. People’s communes were the cornerstone of China’s socialism, and this collectivization of 600 million peasants has been called “history’s greatest social experiment”.
As part of the modernization efforts in agriculture, the people’s municipalities in 1984 were turned into “village enterprises”. The authorities introduced a quota system where farmers were allowed to sell surplus production in the free market after the quotas were delivered to the state. The farmers were also granted rights to the land through settlement contracts where the individual households are responsible for production in their own areas. Production immediately increased very quickly, but the authorities later had to intervene through price controls, subsidization and other measures to prevent inflation, secure diversified production and prevent overproduction of certain products. Despite the measures, income disparities between the rural population and the urban population have increased.
There are also major regional differences. While farmers in the areas around the major cities of Beijing, Shanghai and Guangzhou have been able to increase their income through the cultivation of a wide variety of products, the majority of farmers in other parts of the country have not had the same opportunity.
The organization of agriculture is therefore still a controversial political issue. Grain production is the key factor for China to feed itself. However, the country is not entirely self-sufficient in grain. It was long feared in the 1990s that international grain trade would collapse on the day China had to import grain from outside. However, for the time being, it has emerged that the authorities are able to keep production levels at a controlled level that the world market is capable of handling.
Over 90 percent of the rice land is located south of the Qinling Mountains, while 60 percent of the wheat is grown between the Qinling Mountains and the Great Wall of China in the north. However, there is an extensive mix of the two main growths. Since the beginning of the 1980s, agricultural land, primarily rice fields in southern China, has tended to be converted into industrial land. At the same time, productivity growth has been highest in northern China. The wheat-producing northern areas have therefore increased their relative importance over the rice-producing areas in the south.
Agriculture is also subject to a structural change where more profitable forms of operation, such as growing oil crops (22.5 million tonnes) and meat production increase in favor of less profitable grain cultivation. China is the world’s largest producer of rice with 21 percent of world production in 2000.
Unlike the other cereals, rice production has not increased significantly since the early 1980s. Along the Changelva, rice is grown in the summer during the monsoon rains, while the rice fields in winter are used for fish farming or for the cultivation of wheat, barley or legumes. The rice is grown everywhere by artificial irrigation. In Sichuan and other mountainous areas, the mountain slopes can be terraced far up.
Wheat cultivation is of particular importance in northern China, where it assumes the role of rice. In the North China Plain, along the Huangel River, three crops are often harvested in two years, with winter wheat being grown in crop rotation with a variety of crops such as millet, kaoliang (giant millet), corn, soybeans, cotton, rapeseed, peanuts and sweet potatoes. North of the Great Wall, the climate allows only one crop per year, and in the northern part of Manjury (Northeast China) wheat is the main crop. Maize is cultivated especially in Sichuan, Hebei and Male Jury. Production was growing rapidly in the 1980s.
Millet is the most important grain in the southern parts of Manjury, but production is declining. In the northwest, millet, oats and summer wheat are grown and barley grown up to 4600 meters above sea level in Tibet. China is by far the world’s largest producer of tobacco with an average production of over three million tonnes of leaves, and together with India is the world’s largest producer of tea. About 65 percent of the tea is grown in the mountain and valley areas south of Chang Jiang. China was previously the world’s most important tea producer, but declined sharply as a result of competition from India and Sri Lanka. After 1949 production has again increased as a result of new cultivation.
China is also the world’s largest producer of cotton. The crops can vary considerably from year to year, since cotton prices are still set by the authorities. Cotton is mainly grown in the plains of eastern China north of Chang Jiang as well as in Xinjiang. Hemp, flax, jute and more are also grown.
In the subtropical and tropical parts of the southeast, sugar cane, citrus fruits, rubber and sisal hemp are grown. Sichuan is China’s leading producer of heavy oil, mulberry and silk. Other important areas for silk breeding are the Pearl River and Changelva delta areas. Here, mulberries and cane are often grown in connection with fish farming. Dig ponds and plant mulberry trees, sugar cane and fruit trees along the banks.
During the reform period, fruit growing has become a very important part of agriculture. Shandong, Guangdong and Hebei are the most important fruit growing areas.
Animal husbandry previously meant most in the outer areas of China. However, the stocks have increased dramatically during the reform period of the 1980s. While meat production (pigs, cattle, sheep) doubled between 1952 and 1978, it doubled in the period 1978–1995.
China is now the world’s largest producer of meat and eggs. The main meat producing areas are Shandong, Jiangsu and Hunan as well as Sichuan. The production of eggs and chicken is concentrated to Shandong, Jiangsu, Henan, Hebei, Hubei, Liaoning and Jilin.
China has about 40 percent of the world’s pigs, the largest stock of poultry, horses and donkeys, as well as significant stocks of sheep, goat, cattle, mules and camels. Horses and mules in the north and buffalo in the south are used as migratory animals. Animal husbandry is very important in ethnic areas of Qinghai, Tibet, Xinjiang, Gansu and Inner Mongolia.
China is one of the world’s largest producers of minerals. Nevertheless, the mineral resources are relatively small compared to the large population. The country has the world’s largest deposits of over 20 types of minerals including coal, titanium, lead, zinc, molybdenum, tungsten, tin, lithium, antimony, mercury, niobium, magnesite, graphite, flux, tungsten, refractory clay and rare earth metals. The country also has larger deposits, but is not self-sufficient with iron, manganese, bauxite, copper, silver, oil and gas.
China alone accounts for 42 percent of the world’s coal production (2004). At the same time, coal accounts for 75 percent of energy production. Coal deposits are therefore strategically important, although the authorities want to reduce coal consumption for environmental reasons. The reserves are very large (334 billion tonnes, 2003), but are unevenly distributed. Just over 60 percent is concentrated to Shanxi, Shaanxi and Inner Mongolia, while the remainder is found in Heilongjiang, Hebei, Shandong, Anhui, Henan, Guizhou, Yunnan, Ningxia and Xinjiang. It gives the distribution pattern: “rich in the north, poor in the south” and “much in the west, less in the east”.
Shipping of coal from the coal-rich north and west to the industrializing provinces along the east and south coasts creates major challenges for the country’s transport network. Shanxi is both the largest producer and by far the largest coal exporting province. Coal is transported by rail from Shanxi through Beijing to the port city of Qinhuangdao, and from there by boat to Chang Jiang Valley and southern China. Coal is also exported abroad, and China is the world’s third largest coal exporter (2004).
Although China, due to its large population, is not self-sufficient in oil, the country has relatively large oil resources. The country is the world’s seventh largest oil producer (2018). Production is 3.8 million barrels per day (2018), while reserves are estimated at 25.6 billion barrels (2018).
Currently, most of the oil production takes place on land, but the oil reserves along the east and south coasts are possibly among the largest in the world. The most important oil fields are the relatively ancient Daqing and Liaohe fields in northeastern China as well as Karamay and Tahe in Xinjiang, Yumen in Gansu, Qaidam basin in Qinghai, Shengli in Shandong and Sichuan basin. The relatively newly discovered fields in western China will require large investments in infrastructure to transport the oil to the industrial areas in the east and south.
The most interesting offshore fields are in the Gulf of Bohai and in the northern part of the South China Sea. Since 1980, foreign oil companies have been involved in oil exploration offshore, and from 1985 also in the onshore exploration. Natural gas production started much later than oil production. China is the world’s sixth largest natural gas producer (2017). The reserves of natural gas are estimated at 5.4 trillion cubic meters (2018).
The most important natural gas production area is the Sichuan basin traditionally. Larger newly discovered reserves of natural gas can be found in the Tahe field in the northern Tarim basin of Xinjiang and in a field in the East China Sea that lies partly in a disputed area between China and Japan. A gas pipeline from the Tarim Basin to Shanghai was completed in 2004. Replacing coal with natural gas in the household is a stated goal, and this has come the furthest in Shanghai and Guangdong.
The iron ore deposits are estimated at 21 billion tonnes (2003), and are abundant in the anthracite fields of Shanxi, Hebei and Shandong, among others. The ore occurs in connection with coal, and it is processed by the industry in northern China. The significant deposits of tin are mainly mined in Guangxi and Yunnan. Some of the world’s largest tungsten mines are found in Hunan and Jiangxi.
In Hunan lies the world’s largest antimony mine, while one of the world’s largest copper mines is in Jiangxi. The use of gold has 3000-year-old traditions in China, and gold is mined today in several provinces.
China has more than enough deposits of various non-metallic minerals used in the construction industry. The country also has huge deposits of salt, which is extracted, among other things, in dry salt lakes in Qinghai, Xinjiang, Tibet and Inner Mongolia. Marble and granite are Chinese quality products. Both are mined in several places in eastern China and exported to the West, among others.
Due to its size, China has during the reform period developed into a very important player in the world energy market. In 2016, the country accounted for 17.2 percent of the world’s primary energy production and 21.6 percent of consumption. The country is not self-sufficient in energy and relies on importing both oil and coal.
Coal is traditionally the most important source of energy and accounted for 62 percent of the energy supply in 2016, while oil accounted for 19 percent, natural gas 6 percent and hydropower 9 percent. Traditional energy sources are also important, and in the countryside, biomass accounts for about 75 percent of household energy supply.
China is the world’s largest producer of electrical energy. In 2016, electricity generation was 6187 TWh, which represented 24.8 percent of total electricity generation in the world. Production was distributed on heat power with fossil energy (72 percent), hydropower (19.5 percent) and nuclear power (3.5 percent). The contribution from wind turbines and solar power plants was 237 TWh and 75 TWh respectively.
In recent years, China has evolved to become the world’s largest producer of hydropower, wind power and solar power. In 2009, the world’s largest dam plant was completed. The plant is located at Chang Jiang (Yangtsekiang) and is referred to as San Xia (Three Gorges Dam). The capacity of the dam is estimated at 22 150 million cubic meters of water. After all the units in the associated hydropower plant were commissioned in 2012, a total installed capacity of 22,500 megawatts was installed. The power plant is meant to channel economic growth from the richer coastal provinces to the upper reaches of the Chang Jiang Valley. A number of dam plants with hydropower plants have also been built along Huangelva. In southern China, there are many hydropower plants that exploit the region’s large surplus of water, but these are mainly located in outskirts.
China has also developed a significant nuclear industry. The industry is based on imported Western technology, but gradually the country has become independent of it and developed its own nuclear reactors for sale worldwide. China is now the third largest nuclear power producer in the world (after the US and France).
In 2016, the energy intensity in China is estimated at 12.6 MJ/USD against 5.7 MJ/USD in the world as a whole. Adjusted for purchasing power parity, the energy intensity is 6.3. The high energy intensity is largely due to the use of coal in older power plants with poor efficiency. Coal ovens, which are widespread in households, also have low energy efficiency. In addition, the industry has high energy intensity, caused by old technology. Low prices have meant that companies have had little use in streamlining their energy consumption.
Growth in energy production has not kept pace with growth in industry and in the economy in general. At the same time, energy demand in the future will increase dramatically in line with industrialization, urbanization and the increased need for transport. The authorities have therefore initiated several processes in an attempt to secure energy supply as a basis for continued economic growth. China is already importing significant quantities of crude oil (the world’s sixth largest oil importer in 2003), but imports will have to continue to increase sharply in the future. The authorities have therefore invested actively in Central Asia, and elsewhere to secure access to foreign oil sources. Among other things, an oil pipeline from Kazakhstan is under construction.
High consumption of coal has meant that China accounts for the largest emissions of the greenhouse gas CO 2. Coal power plants are also the cause of local pollution and acid rainfall. Although coal will be the main source of energy for a long time to come, the authorities have taken several measures to reduce energy consumption depending on fossil energy. In 2016, a new five-year plan was presented in which previously announced projects for the construction of coal-fired power plants were canceled and a greater focus is now on developing nuclear power, wind power and solar energy. However, China’s dependence on coal will continue for a long time to come, partly because coal is considered cheaper than other energy sources.
According to Countryaah, the industrial sector has evolved sharply since the reform period began in 1978. Today, China is among the world’s leading manufacturers of a wide range of industrial products, and especially lighter, labor-intensive products. For example, China produces over half of the world’s toys, bicycles and footwear.
After the communist takeover of power in 1949, industry became a priority in the country’s economic development. In the first five-year plan (1953–1957), special emphasis was placed on developing the heavy industry in the form of large capital-intensive industrial projects, partly financed and supported by the Soviet Union. During the Great Leap in 1958-1960 and partly also during the Cultural Revolution in 1966-1976, it was decided to focus on the “backyard industry”, but the experiment with small, local industrial companies proved unsuccessful.
Throughout the 1970s, the recognition grew that the country could not keep up with developments in neighboring countries without opening up to the outside world. A gradual opening of the economy was therefore initiated from 1978.
Industry can be divided into two sectors: the state and the non-state. The latter includes collective enterprises located in both rural and urban areas, private enterprises and foreign-funded enterprises. While these relate to the market economy, state-owned enterprises are far and away enjoying free access to subsidies in the form of loans and credits regardless of financial results.
The state-owned enterprises were built up under the centralized planning economy. They have traditionally played an important role in the country’s welfare policy as they have funded hospitals, schools, kindergartens, nursing homes and other social measures for employees and their families.
After the introduction of market economy reforms, most state enterprises encountered problems, and they became dependent on continued government subsidy. Closing these is difficult without causing mass unemployment with associated social problems. Still, it is a long-term goal for the government to get rid of all the state-owned enterprises with the exception of about 500 key companies.
The southeastern coastal region (from southern Jiangsu and Shanghai to Hainan) was the first area to benefit from open industrial and trade policy, and has been the leading growth area for the light industry. The area was able to exploit its cultural links early with the so-called “Great China”, which includes Hong Kong, Taiwan and foreign Chinese in Southeast Asia and the rest of the world.
The development of the industry is heavily dependent on access to foreign technology. As part of this, the country has welcomed foreign partners, either in joint ventures or as direct foreign investment (DUI). A large proportion of the DUIs are carried out by Hong Kong and Taiwanese compatriots and by foreigners in Southeast Asia. Hong Kong alone accounts for 35 percent, while Taiwan and the rest of Asia account for another 30 percent. Hong Kong share includes investments made by Chinese in Southeast Asia and Taiwan channeled through Hong Kong.
Western investment first began to arrive in the mid-1990s. Many of the Western investors, like the Japanese, have invested in the automotive and telecommunications industries.
One of the driving forces of industrial growth has been the potentially large domestic market. Although a large majority of the population still has to be considered poor – many in part very poor, China still has a large and growing middle class which, overall, has developed into one of the world’s most buoyant. Therefore, there is a large domestic market for all kinds of consumer goods from electrical household goods to cars. At the same time, a large supply of cheap labor has made labor-intensive Chinese products attractive on the world market.
Iron and steel production has long been a key factor in China’s industry. Production is concentrated to key enterprises, of which eleven are integrated with mining. The largest steel works are in Anshan (Liaoning), Wuhan (Hubei), Baoshan (near Shanghai), Ma’anshan (Anhui), Baotou (Inner Mongolia), Benxi (Liaoning) and Chongqing (Sichuan).
The modernization of the country has otherwise contributed to a tremendous growth in the construction industry. China is one of the world’s largest cement producers. The country is also one of the world’s leading producers of paper, although its volume per capita is small compared to Western countries.
The chemical industry is heavily developed, with the production of fertilizers, plastics and synthetic fibers. The large oil deposits have formed the basis for the construction of a significant petrochemical industry with refineries in, among others, Lanzhou, Daqing, Dalian, Yanshan at Beijing and Shanghai. China, including Hong Kong, is second only to the world’s largest producer of petroleum products. The state-controlled petroleum industry has been restructured into two competing state-owned enterprises. China began to exploit its coal reserves in the production of ammonia in the 1960s, but the methods were later sought to be modernized.
The mechanical industry encompasses a wide range of products, from railway equipment, cars and bicycles to refrigerators and television sets. This industry is located in a large number of manufacturing sites across the country, with Shanghai, Beijing, Tianjin, Shenyang, Changchun and Guangdong Province as the main centers. The automotive industry is growing strongly thanks to imports of foreign technology and investments.
The electronics industry, well aided by good access to highly qualified personnel, has evolved to become the fastest growing industry branch. China is the world’s fourth largest PC manufacturer, but many subcomponents are imported from the United States via Hong Kong. In 2001, China had more than 10,000 software companies with a total workforce of around 400,000 workers.
The textile industry is another important industry. China is the world’s largest manufacturer of cotton yarn and cotton and silk fabrics, as well as a leading manufacturer of woolen yarn and woolen textiles. The textile industry is spread across a large number of production sites, many of which are located to the coastal provinces, but also more to Xinjiang.
Among the most successful sectors of China’s industrialization have been the development of rural enterprises, TVEs, in southern Jiangsu and Changelwa deltas, as well as around the Gulf of Bohai and Guangdong. Most of these are collectively owned or pure family businesses. An example is a village of 920 families with 300 textile mills. These companies can quickly adapt to changes in market demand, and they can increase and decrease production without major consequences for the company.