ely creating an atmosphere in which domestic private enterprise can flourish, and in which international business is likely to expand ("China's New Capitalism," 1999, p. 50).
But the Chinese "economic miracle" also has its dark side. Rapid growth has been accompanied by rapid inflation, with consumer prices rising 17 percent in 1993 and 27 percent in 1994. Nearly one-half of the state-owned enterprises (SOEs) are losing money, and plans to restructure and privatize these entities have stirred strong resistance from both the Communist party (which dominates the management of the SOEs) and workers (who fear the loss of secure employment plus the inexpensive housing and medical care provided by the state). Though the SOEs employ only 76 million workers out of China's labor force of 500 million, they consume 70 percent of state investment funds and contribute less than half the country's economic output. While technically bankrupt, SOEs remain afloat on government subsidies ("Here Comes," 1999, p. 92).
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