SALAS DE ESPECTÁCULOS Y CENTROS DE REUNIÓN

In fact, the privatization of rural production that began in the period 1979-1983 saw many small private businesses emerge, run by the most successful local farmers - a new

entrepreneurial class in rural China (Christiansen and Rai 1996). As a result of the unpublished endorsement in 1983, the vast majority of these private enterprises were not officially registered as such, but contained or hidden in the category “township and village enterprises” (TVEs),82 which had evolved from the “commune and brigade

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According to Whiting (2001, p. 36), “[t]he distinction between the individual household firms and private enterprises is based on the notion that owners of individual household firms are themselves directly involved in labor, while owners of larger private firms that employ eight or more workers, are engaged in the exploitation of labor. The cutoff of eight employees is derived from Marx.”

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See Christiansen (1989) and Christiansen and Rai (1996).

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The legal status is recognized in the Amendments to the Constitution of the People's Republic of China passed at the First Session of the Seventh National People's Congress on April 12, 1988. See Zhonghua

renmin gongheguo xianfa xiuzhengan (The Amendment to the Constitution of the People's Republic of

China). Website of Chinaonline. http://www.china.com.cn/chinese/SFKSZN-c/80704.htm (accessed 5 October 2015).

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According to Christiansen and Zhang (1998), township and village enterprises (TVEs) are an umbrella term that refer to any non-agricultural enterprises located in rural areas. They include both enterprises owned collectively by the townships, the towns or the administrative villages and those owned privately by farmers, by partnerships and by shareholders. Also see the definition provided by the Ministry of

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enterprises” (shedui qiye) and “sidelines” (fuye) of the People’s Commune system.83 The unexpected upsurge of TVEs was, in other words, a key trigger in the process of

institutional change in the past three decades.84

In addition to the inception of the household responsibility system which freed large quantities of labor from agriculture, another important aspect concerning TVE origins was the restrictive rural labor policy of “encouraging farmers to leave their farmland but not their hometown” (litu bulixiang), and “enter the factory without going to the city” (jinchang bujincheng), which the central authorities and experts issued in order to resolve the rural labor surplus problem (Li 2012, p. 220; Cai and Wang 2012, p. 219). For this reason, the then existing commune-and-brigade-run enterprises (shedui qiye)85 were revitalized to absorb the surplus rural labor force. These precursors of TVEs were considered to be rural collective enterprises owned by production brigades or people's communes, and were required to increase rural employment opportunities and transfer their profits to the communes and brigades, respectively. Initially, an important feature of the TVEs was to provide local non-agricultural incomes for farming families.

In 1983, following the central policy, most rural enterprises became independent of the

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The literature on TVEs has been extensively studied by economists and political scientists. For example, some economists argue that TVEs accelerated the speed of China's rural industrialization (Park 2001), fostered rural entrepreneurship (Huang 2010; Xu 2009, 2011); while others stress that TVEs contributed to China’s overall economic performance by forcing the SOEs to join the market competition (Naughton 1995), pushing structural change in terms of labor shifting from the agricultural to the non-agricultural sector (Park 2001), playing a “catalytic role” in economic transformation (Naughton 2007, p. 271).

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Deng Xiaoping noted that for the Chinese leaders the rapid growth of TVEs came as an unexpected surprise in the rural economic reform, see Deng (1987b). Whiting (2010) and Oi (1999) argue that the problems produced by the pre-1994 system, associated with TVEs became an impetus for the 1994 reforms.

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Towns and townships replaced the people’s communes and became the lowest-level jurisdiction of the Chinese state in October, 1983. See Sange zhongyao wenjian yu xinshiqi zhongguo xiangcun zhengzhi de

biange (Three Important Documents and Political Transformation in China’s Countryside during the New

Era). Website of Peopleonline. http://cpc.people.com.cn/GB/68742/69115/69120/4684361.html (accessed 5 October 2015). Following the reform of commune system, the term of TVEs officially replaced the commune-and-brigade-run enterprises in a central policy document dated March 1984. See Document No. 4, 1984.

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collective structures. Christiansen and Rai (1996, p. 230) noted that, “[s]ome were based on contracts with the director, who leased the enterprise, paying a fixed lease to the collective; others were based on appointment of directors, who had to transfer part of the profit to the collective; others were based on joint management between a number of persons; and yet other [mainly small] units were auctioned off or sold directly.” Under these circumstances, a broad range of TVE ownership forms emerged, encompassing individual, joint household (lianhu), shareholding cooperative (gufen hezuo), private, village-owned collective, township-owned collective, neighborhood-committee-run, and town-owned collective enterprises. The TVEs were registered at county level and managed by the industrial and commercial administrations established by township and town governments.

The range of forms of ownership falls mainly within the broad categories of collective and private. In the collective category are township-run, and village-run enterprises; domestic state-collective joint ventures (jiti lianying qiye); the government-run variant of shareholding cooperatives (jiti gufen hezuo qiye); and individually contracted collectives (geren chengbao jiti qiye), the assets of which originated in collective investment. In the private category are individual household firms, private enterprises, joint household enterprises (lianhu qiye), and the private variant of shareholding cooperatives (siren

gufen hezuo qiye). Individually contracted “fake collectives” (jia jiti) were based on

investment by private individuals, but falsely registered as “collectively-owned.”

In theory, the ownership of collective enterprises was directly retained by and subordinate to the towns and townships. In any case, these enterprises were not controlled by the state plan,86 but constrained by policies and rules completely different from those regulating the state sector and urban collective enterprises (Christiansen and Rai 1996). However, the many diverse enterprises and new, vaguely defined ownership forms of TVEs initially caused problems. The primary problem was the fact that many enterprises were privately-

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In particular, they were not subject to output quotas; in reality, the state plan authorities had since the early 1970s set aside quotas for supplying raw materials and other production factors for TVEs.

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owned but officially registered as collectively-owned, often referred to as “red cap” enterprises (hongmaozi qiye) (Christiansen and Rai 1996; Sachs et al. 2002; Woo 1996). The registration of these “fake collective” (jia jiti) enterprises (and the associated practice of “doing business under pretense” (guahu jingying), for example by borrowing official stamps and collective company registration papers to conduct private business) has been interpreted by some as an effort to disguise their true private ownership in order to benefit from “lower tax rates, easier approval procedures, less restrictions on the size and

operations of the enterprises, and shelter against possible reversal in the political fortunes of the reformers. And it is commonly believed that the number of red-capped private enterprises is greater than the number of registered private enterprises” (Woo 1996, p. 315). The collective enterprises were indeed granted very attractive preferential policies from the state authorities, including initial 3-year tax holidays, access to bank loans, and other measures, yet it is important to point out that the registration of rural private enterprises in the “collective” category was mandatory until 1988, and that the benefit accruing to them seemed to be viewed positively by their “real” private owners, local authorities and the central policy makers alike, serving the purpose of local employment of “surplus laborers.”