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Abstract
Township and village enterprises (TVEs) are the fastest growing sector of
China's economy. Their development has been shaped by their close ties with
local governments and communities. However, as marketization processes
dissolve these links, the increasing competitive pressures of the 1990s make the
search for new forms of enterprise organization a priority. The Shareholding
Cooperative System (SCS) has been proposed as a method of strengthening
enterprise autonomy whilst preserving the predominance of public ownership,
and of improving enterprise efficiency by tying performance to profitability
whilst maintaining some principles of equity. In practice, the new opportunities
opened up by reform are often monopolized by those already in positions
of wealth and power: local governments and individual entrepreneurs. But
workers and local farmers may also become more directly involved in
enterprise ownership, gaining a greater say in decision-making. In these
cases, the SCS resembles a multi-stakeholder cooperative in which workers,
managers, local governments and local farmers negotiate around their stakes in
the future of the enterprise.