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WEEKLY NEWSLETTER
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China
Index
From 1980 to 1986, the number of rural town and township
enterprises rose from 1.42 million to more than 12.2 million. There
were five types of town and township enterprises: township
enterprises, village enterprises, cooperative enterprises,
enterprises jointly run by several households, and household
enterprises. In 1986 the assets of the enterprises at the township
and village levels totaled -Y134 billion.
Their total output value for 1985 was -Y272.8 billion, 17
percent of the gross national output and 44 percent of gross
agricultural output. Rural enterprises absorbed a large portion of
the surplus agricultural labor displaced by the agricultural
responsibility system and the breakdown of the commune system
(see Post-Mao Policies
, ch. 6). This absorption helped the state greatly
by eliminating state support of millions of displaced workers. In
1986 rural enterprises employed approximately 76 million people, or
20 percent of China's total workforce.
The town and township enterprises made a significant
contribution to overall economic growth. In 1985 an estimated 28
percent of coal, 53 percent of construction materials, 30 percent
of paper, 20 percent of textile goods, 33 percent of garments, and
75 percent of leather products came from rural enterprises. The
enterprises also made extensive progress in the export market, with
8,000 export-oriented factories, of which 870 were Chinese-foreign
joint ventures. In 1985 town and township enterprises earned about
-Y4 billion in foreign currency.
Despite the rapid growth and success of town and township
enterprises, continued expansion faced obstacles in 1987. The
government was trying to limit production because of economic and
environmental concerns. Moreover, financial mismanagement, poor
market analysis, rising energy and raw-material cost, substandard
equipment, and constant interference from local government
authorities hampered production and expansion. In certain areas,
such as Zhejiang Province, efforts were made to solve some of the
problems facing the rural enterprises. Local governments allowed
the enterprises to keep 70 percent of profits, and of the remaining
30 percent remitted to the county government, 70 percent was
invested in existing enterprises or used to establish new ones.
Data as of July 1987
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