The emergence of Township and Village Enterprises (TVEs), affectionately called as "Collectives", in China took everybody by surprise as its performance was spectacular and beyond comparison. Even the Chinese Government itself could not believe that performance-wise the TVEs could challenge the state-owned enterprises. The emergence of TVEs generated enormous job opportunities to the rural residents and immigrant rural population and their was a quantum leap in the per capita income of China. This article studies the emergence and the various factors of the success of the Chinese TVEs.
"What took up by surprise was the development of township and village industries. All sorts of small enterprises boomed in the countryside, as if a strange army had appeared suddenly from nowhere. This is not the achievement of our central government. Every year, township and village enterprises achieve 20% growth. This was not something I had thought about. Nor had the other comrades. It surprised us."
It was found that the growth of Township and Village enterprises (TVEs) of China took everybody by surprise, not only in China but elsewhere in the world. This is nothing but an explosive growth of rural industry that was not experienced by any developing or developed country. It broke the theory of the western countries that privatization of economy is the only way for progress. It was experienced in the past that the dead hand of the government bureaucracy did not extend any hope of instilling dynamism in the economic affairs of the country. Hence, the adversaries of communism advocated that capitalistic culture alone could be a solution to this problem to boost the economy of a country. It was also feared that in a communist country, the interference from the bureaucracy would extend its hands beyond its competence.
In China, however, the rapid growth of enterprises on the country side came about in the absence of privatization or any national blueprint for reform. The rural cadres brought successful TVEs through their management of public enterprises, on their own initiatives. The dynamic role played by the local cadres in promoting economic development stands in a marked contrast with the conduct, familiar from local officials in their transitional and developing economies.
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