Vietnam - Mekong Transport and Flood Protection Project
Ody, Anthony J.
This paper updates through 1990 the World Bank analysis of China's nonagricultural rural enterprise sector, which has come to play an increasing role in both industry and the service sector, and which operates largely outside the framework of central state control. The sector's performance during the 7th Five-Year Plan period (1986-90) is reviewed with respect to output, employment, exports and fiscal contribution, and regional and subsectoral variations are examined. Controversies over the sector's record in areas such as economic efficiency, energy intensity and pollution control are also analyzed. Review of the official policy climate towards the sector covers initiatives intended to improve the legislative and incentive frameworks and attempts to improve public provision of services to rural firms, as well as their treatment during the austerity campaign of 1988-90. The paper concludes that the nonstate sector has a crucial role to play in increasing recognition by the central authorities and outlines areas in where the policy climate still shows room for improvement.
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