The True China Miracle

In the 1980s, the Chinese economy grew rapidly. Even more impressively, personal income growth, especially of rural Chinese (80 percent of the Chinese population), outpaced GDP growth. A widespread view among China scholars is that township and village enterprises (TVEs) were owned and operated by local governments, a view that has heavily shaped the China Model narrative of Chinese growth. A detailed examination of government documents, statements by Chinese leaders, and the official statistical manual shows that this view of TVEs is flatly wrong. Out of 12 million TVEs in 1984, about 10 million of them were private. If we get this detail right, TVEs are probably history’s largest private-sector success story.