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

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ll present real challenges for the government. The so-called Third Road of economic transformation adapted by the CCP encourages entrepreneurship and is modeled in part on what Singapore once tried: combining a free market economy with authoritarian government, a process known as "soft authoritarianism." He (2005) believes that thus far, China's economic reform has been an unprecedented success, but ongoing development in this Third Road model will require a delicate balance between conformity to group interests with attention to individual rights. Currently, the state controlled China National Offshore Oil Corporation (CNOOC) has bid $18.5 billion for Unocal, a signal that China is looking overseas for natural resources and brands (The way of the dragon, 2005). Controversially, acquisitive Chinese firms are receiving financial assistance from their government. Unocal is at the center of controversy in that opponents of the Chinese purchase bid in America believe that national security interests are at stake. There are fears that there will be a loss of American jobs and that the Chinese will either remove UNOCAL products from the American market or increase their costs. Analysts believe that China's bid for Unocal sums

Category: Foreign - C