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Beyond the Property Rights Approach: Welfare Policy and the Reform of State‐Owned Enterprises in China

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  • Edward Gu

Abstract

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.

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  • Edward Gu, 2001. "Beyond the Property Rights Approach: Welfare Policy and the Reform of State‐Owned Enterprises in China," Development and Change, International Institute of Social Studies, vol. 32(1), pages 129-150, January.
    • Handle: RePEc:bla:devchg:v:32:y:2001:i:1:p:129-150
    DOI: 10.1111/1467-7660.00199
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    Cited by:

    1. Cui, Yuling & Nahm, Daehoon & Tani, Massimiliano, 2012. "The Determinants of Rural Migrants' Employment Choice in China: Results from a Joint Estimation," IZA Discussion Papers 6968, Institute of Labor Economics (IZA).
    2. Liu, Xiaojie & Shen, Jim Huangnan & Deng, Kent, 2022. "Endowment Structure, property rights and reforms of large state-owned enterprises (SOEs) in China: Past, present and future," Structural Change and Economic Dynamics, Elsevier, vol. 62(C), pages 675-692.
    3. Huaijia Zhu & Bo Chen & Huaiqi Zhu, 2024. "How does central enterprise reform promote total factor productivity of defense firms in China?," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-27, April.
    4. Fox Z Y Hu, 2005. "Deconstructing State-Owned Enterprises in Socialist China under Reform: A Scalar Examination," Environment and Planning A, , vol. 37(4), pages 703-722, April.

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