Business-related services (BRS) and the competitiveness of the manufacturing industry in China’s transition economy: a panel study analysis - 中欧社会论坛 - China Europa Forum

Business-related services (BRS) and the competitiveness of the manufacturing industry in China’s transition economy: a panel study analysis

Gu Naihua, Bi Doudou and Ren Wangbing

Chinese Industrial Economy, Vol.9, 2006, pp 14-21

Before the outward-looking reforms began in China’s planned economy, the country’s manufacturing industry and BRS could be characterised as follows: at a resource allocation level, the government exclusively encouraged development in manufacturing while neglecting and even halting BRS. At an organisation level, BRS providers were often in-house units within a company rather than an independent sector. These practices were a necessary part of China’s “get ahead of the West” strategy in place at the time. Differences in price arose between industrial products and BRS and because at the time financial pressure was limited, the manufacturing industry exploded. Starting in 1978, China’s switch from a planned to a market economy progressively subdued the imbalance between BRS and the manufacturing industry , but interaction between the two sectors remains largely dysfunctional.

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