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References

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Table 1: Share of Transactions Conducted at Market Prices (percent of transaction volume)

1978 1985 1995 2003

Producer goods

Market prices 0 13 78 87.3

State guided 0 23 6 2.7

State fixed 100 64 16 10.0

Retail Sales

Market prices 3 34 89 96.1

State guided 0 19 2 1.3

State fixed 97 47 9 2.6

Farm Commodities

Market prices 6 40 79 96.5

State guided 2 23 4 1.6

State fixed 93 37 17 1.9

Source: OECD (2005: 29).

Table 2: Breakdown of Industrial Value Added by Controlling Shareholder

1998 2003

State Controlled Enterprises 54.8% 41.4%

Direct Control 38.9% 22.9%

Collective Controlled Enterprises 17.3% 6.4%

Private Controlled Enterprises 27.9% 52.3%

Total 100% 100%

Source: OECD (2005: 133).

Table 3: Breakdown of Industrial Value Added by Controlling Shareholder, Electronic and Telecom Equipment

1998 2003

State Controlled Enterprises 2.9% 2.4%

Direct Control 1.7% 1.2%

Collective Controlled Enterprises 0.4% 0.1%

Private Domestically Controlled Enterprises 0.5% 1.4%

Foreign Controlled Enterprises 2.4% 5.5%

Total Industry Contribution 6.4% 9.5%

Source: OECD (2005: 134).

Table 4: Chinese Exports by Type of Ownership, 1993-2003

Billions (USD) Percentage

1993 2003 1993 2003

Computers, components, peripherals 0.7 41.0 100 100

Collective 0.0 0.4 0 1

State-owned companies (SOE) 0.2 2.5 26 6

Joint Production 0.0 0.8 4 2

Joint Investment 0.1 6.2 19 15

Foreign Company (100%) 0.4 30.8 51 75

Private 0.0 0.4 0 1

Electronics, telecom equipment 12.3 89.0 100 100

Collective 0.1 2.7 1 3

State-owned companies (SOE) 6.6 16.0 54 18

Joint Production 0.9 2.7 7 3

Joint Investment 2.8 24.9 23 28

Foreign Company (100%) 1.8 38.3 15 43

Private 0.0 4.5 0 5

Source: Peters E.D. (2005: 102).

Table 5: Urban Employment by Type, in millions

TF EF EP ES IRR Total

1990 139.1 1.6 0.6 6.1 15.3 162.7

1991 142.9 2.2 0.7 6.9 13.7 166.4

1992 145.1 2.8 1.0 7.4 14.1 170.4

1993 143.1 5.2 1.9 9.3 22.6 182.1

1994 141.0 7.4 3.3 12.3 18.3 182.2

1995 140.4 8.7 4.9 15.6 17.0 186.4

1996 139.0 9.4 6.1 17.4 23.9 195.8

1997 135.9 10.8 7.5 19.4 30.5 204.1

1998 107.2 16.3 9.7 22.6 56.8 212.6

1999 99.9 17.8 10.5 24.1 68.2 220.5

2000 93.3 19.3 12.7 21.4 81.3 228.0

2001 86.5 21.4 15.3 21.3 91.4 235.9

2002 79.9 25.7 20.0 23.5 95.3 244.4

Note: TF is employment in traditional formal enterprises (state and collective enterprises), EF is employment in emerging formal enterprises (cooperative enterprises, joint ownership enterprises, limited liability corporations, shareholding corporations and foreign-funded enterprises), EP is employment in small-scale private registered enterprises, ES is employment in individual registered businesses, and IRR is irregular employment.

Source: Ghose (2005: 27).

Table 6: Share of Parts and Components in Total Manufacturing Trade, in percent

PRC Northeast Asia (excluding the PRC) Southeast Asia

Note: Northeast Asia includes Hong Kong, China; Republic of Korea; Mongolia; and Taiwan. Southeast Asia includes Burma, Cambodia, Indonesia, Lao People's Democratic Republic, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

Source: Asian Development Bank (2008a: 23)

[1] For a critical examination of the reform process, highlighting policies, contradictions, and consequences, see Hart-Landsberg and Burkett (2005a: Chapter 2).

[2] This dominance of market forces means that state owned enterprises are also subject to market discipline and imperatives.

[3] For more on the question of capitalist restoration see Hart-Landsberg and Burkett (2005a and 2005b).

[4] For example, before 1979, only 27 percent of electronics production was for civilian use (Wong 2006: 66).

[5] It is important to note that the Communist Party’s decision to adopt a market oriented reform program was not made in response to mass demands. In that sense it was a rejection of increasingly popular calls for the decentralization and democratization of China’s existing production and planning systems (Hart-Landsberg and Burkett 2005a: Chapter 2).

[6] Irregular employment includes casual-wage or self-employment—typically in construction, cleaning and maintenance of premises, retail trade, street vending, repair services, or domestic services.

[7] Regular manufacturing employment actually fell over this period, from 53.9 million in 1990 to 37.3 million in 2002 (Ghose 2005: 29).

[8] For a more detailed description of living and working conditions at Foxconn and in Shenzen more generally see Weil (2008).

[9] This discrimination also distorts Chinese government statistics. For example, municipal governments often compete for investment by promoting the economic achievements of their respective localities. To gain a competitive advantage, some governments do not include migrant workers (even those employed) in their population totals when calculating their local per capita gross domestic product (Wu 2007a).

[10] The Asian Development Bank study is based on official statistics. Many analysts believe that these statistics strongly underestimate the degree of inequality. Studies by independent Chinese research institutes have found significantly higher rates of inequality (Wu 2007b).

[11] In commenting on the Chinese experience, the Asian Development Bank noted that the rise in inequality was driven both by rising “differentials in incomes across rural and urban households” and also by “uneven growth in incomes among urban households” (Asian Development Bank 2007a: 10-11).

[12] At the same time, the Communist Party has begun a number of reform efforts which are designed to ameliorate the worst excesses generated by China’s growth strategy without radically changing its orientation. One example is the 2008 Labor Contract Law. It requires, among other things, that employers provide their workers with a written contract and pay a premium for overtime and weekend work. However, because of loopholes and inadequate enforcement, the law has had limited impact on employment conditions (International Trade Union Confederation 2008).

[13] In fact, the Communist Party officially welcomed capitalists to become members at its Sixteenth National Conference in 2002, declaring them to be "Builders of Socialism with Chinese Characteristics."

[14] For example: “From the late 1990s to 2005, the number of individual enterprises [those restricted to a maximum of eight employees] was shrinking at the rate of more than 1.3 million a year. The reasons include the failure to obtain low-interest loans and the ever rising energy and raw material costs” (Lam 2007).

[15] The Chinese government has now halted publication of these protest figures, but most analysts believe that their number continues to rise. Significantly, unrest has also spread to the Chinese military: “For two weeks [beginning in early September 2007], Chinese authorities have tried to put down a series of coordinated riots by thousands of demobilized soldiers, outraged at the shoddy and expensive training offered them in preparation for return to civilian life.... These incidents in cities all over China must be of special concern to the Beijing government, which for years has managed to keep the lid on a growing tide of unrest that sees on average over 250 often-violent protests and demonstrations every day” (Manthorpe 2007).

[16] Unless otherwise noted these economies are the People’s Republic of China; Hong Kong, China; Indonesia; Japan; Republic of Korea; Malaysia; Philippines; Singapore; Taiwan; Thailand; and Vietnam.

[17] The Southeast Asian nations are Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.

[18] The U.S. recession that began December 2007 highlights the problematic nature of China’s dependence on continued U.S. debt driven consumption. If the U.S. economy has entered a prolonged period of stagnation, the consequences for Chinese and East Asian growth will be severe (Asian Development Bank 2008b: 22-8; Roubini 2008).

[19] If this argument is true, it means that the ramifications from U.S. economic difficulties will be far greater for China since it would be host to a greater share of regional production. It also means that Chinese growth will generate fewer benefits for other Asian countries.

[20] Investment rates have been falling in most East Asia countries, in part because national capital has been shifting production to China to take advantage of more profitable production conditions. Foreign direct investment has also declined for a similar reason. In response, governments have implemented new labor regimes designed to weaken labor protections. As a consequence wages and working conditions have worsened throughout the region (Asian Development Bank 2007c: 32-3; Hart-Landsberg and Burkett 2007: 31-36. For a case study of Korea see Hart-Landsberg and Burkett (2006: 28-33).

[21] Latin American and African countries supply China with primary commodities rather than manufactured parts and components and thus have a different economic relationship with China than do East Asian countries. China’s large and growing need for these commodities has boosted Latin American and African growth and foreign exchange earnings. However, this gain comes at a cost. Trade agreements with China, sometimes supported by Chinese financial assistance, reinforce existing structural imbalances by strengthening the primary commodity sector at the expense of the industrial sector. At the same time, close to 95 percent of all Latin American high technology exports face competition from China-based exporters. These threatened high technology exports represent almost 12 percent of all Latin American exports (Gallagher and Porzecanski 2008: 14; Li 2007). Africa faces similar dangers (Cheng 2007a).