SOAS Research Online

Abstract

Local government ownership has dominated China’s township and village enterprises (TVEs) and made a significant contribution to the TVE growth miracle for many years. However, since the mid-1990s, TVEs have conducted a series of radical and successful restructuring in their ownership and governance arrangements. The most striking feature of the restructuring is the fading out of local government ownership. This paper discusses why local government ownership could dominate private ownership in the first two decades of China’s transition and identifies what factors have driven the fading out of local government ownership over TVEs in recent years. It then characterizes one of the emerging joint-ownership forms called “joint-stock cooperative” (JSC) (gufen hezuozhi) and shows the adaptive efficiency of the new form. In this way, the paper also sheds light on the roles that an alternative form of ownership and governance can play in an alternative institutional environment.