Industrial Decision-making under China's Reform, 1985-1988

Abstract

The intention of China's economic reform programme has been to shift the governance of economic relations from bureaucratic towards market co-ordina tion. The decentralization of decision-making from administrative bodies to enterprises and, by extension, the delegation within enterprises of specific deci sions to a trained body of managers, have been key elements in this programme. This paper examines the changes in levels of decision-making experienced by six State enterprises between 1985 and 1988, a period during which the reform was being introduced nationwide. It concludes that the managers of these enterprises did secure additional autonomy to make decisions of strategic significance, but that this autonomy is uncertain and bounded. It is liable to be rescinded as the result of sudden changes in government policy and it is bounded by local rela tional obligations. These constraints upon management expose the dynamics of negotiated dependency relations in a context characterized by underdevelopment in both bureaucratic and market modes of economic co-ordination.