China's Entrepreneurial Revolution: An Overview
At issue in the present study is the entrepreneurial revolution occurring in China, a revolution based on economic reforms oriented toward free trade and open markets that is paradoxically the product of a communist government with a long history of centralized economic planning and decisionmaking (He, 2005). Since 1979, China's political ideology (a Maoist version of traditional Marxist-Leninism) has given way in part, but hardly in full to economic pressures created by a large population seeking and in some instances demanding greater personal individual autonomy (Spence, 1990).
This report will consider, briefly, the historical background of Chinese economic reforms since 1979, moving to key features indicating that a market economy and entrepreneurial class are both emerging in China, and considering China's planned purchase of Unocal, the El Segundo, California-based hydrocarbon company that has been on the market since the spring of 2005 (Timmons, 2005). The report will emphasize the political problems that the Chinese Communist Party (CCP) may face due to the eventual development of autonomous power centers independent of the party.
Spence (1990) notes that by the late 1970s, a new trend had emerged in China's economic life: the old ideal of self-reliance within the collective was replaced by a strategy of heightened local initiative and worker responsibility. Pilot programs helped rural families to gain control over small plots of land that they could till as private lots and sell produce on the open market at an unpegged price while urban entrepreneurs were encouraged to experiment with nonexploitative business. Simultaneously, reforms backed by Beijing worked to facilitate a needed influx of foreign direct investment (FDI) which initially required foreign companies to enter into joint ventures with local businesses. A growing emphasis on reduced barriers to tra...