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China's state-owned enterprises (SOEs) have achieved significant growth and productivity gains without privatization. Despite that, the regime has since late 1993 been forced to put privatization on the agenda, a development that has reached an important milestone at the Party's 15th Congress of September 1997 and since. At the same time, the private sector has grown phenomenally, controlling close to half of the national economy in many respects by now. The regime has not only been ready to let private capital take over small SOEs, but has been desparate to woo private capital for capital injection into even the largest SOEs. While the regime hopes to retain control of these latter SOEs despite private equity participation, a very real possibility exists for the process to run out of the regime's control.

The effects of the East Asian economic crisis on the political & economic development of the People's Republic of China (PRC) are examined. An overview of the Marxist theoretical tool "economic determination in the last instance" is provided; the use of last-instance determination is subsequently defended. The reform of state-owned enterprises in the PRC prior to the regional economic crisis is studied, noting the increasing privatization of such enterprises throughout the late 20th century; multiple factors that accelerated the privatization of Chinese state-owned enterprises are identified. Although non-economic elements that contributed to the PRC's political economic development are acknowledged, it is stated that economic factors had the most influence on the nation's growth. Urban Chinese workers resistance to both labor & state-owned enterprise reform is then addressed to determine why labor movements were unable to offer serious opposition to increased privatization. After considering the regional crisis's impact on the PRC's economy, the extent of postcrisis privatization achieved in the nation is analyzed. It is concluded that privatization processes have become a permanent feature of the present-day Chinese political economy. 2 Figures, 36 References. J. W. Parker

During the last ten years Chinese government's attitude towards private enterprises has shifted significantly. Early in the 90s private capital was regarded as a mere supplement to the state sector of the economy, but since the l5th Congress of the Chinese Communist Party in 1997 the private sector has been regarded as an "important component part" of the economy. This policy shift occured because Chinese economy went into serious difficulties threatening the reform process. Declining profits of state owned enterprises, caused by shrinking monopoly rents, the high gearing of these firms, over capacities due to a duplicative industrial structure emerging as a result of an ill framed system of management in the early stages of reform and a severe fiscal crisis, brought about by eroding fiscal revenue speeded up privatization of all kinds of firms and fostered the sale of state equities in listed companies. Thus state budget simply was lacking the funds for restructuring state owned enterprises and no realistic alternative to privatization remained. (Prokla / FUB)

As the author sees it, since the beginning of China's reform era in late 1978 one can schematically differentiate between a Leftist and Rightist orientation of economic reform. He discusses the meaning of Left and Right in China's economic reform, the Rightist programme of the 1990s and its implementation, the Leftist orientation of the 1990s, the facade of the "third thought liberation" and prospects of the Left and Right. (DÜI-Sen)