Township and Village Enterprises

Township and Village Enterprises (TVEs, simplified Chinese: 乡镇企业; traditional Chinese: 鄉鎮企業; pinyin: Xiāngzhèn qǐyè) are market-oriented public enterprises under the purview of local governments based in townships and villages in the People's Republic of China.

The State Council of the People's Republic of China first officially used the term "TVE" in March, 1984. Previously "Commune and Brigade Enterprises" dating from the Great Leap Forward of 1958 to 1961 had served the rural areas. During that time TVEs had a limited role and were restricted to the production of iron, steel, cement, chemical fertilizer, hydroelectric power, and farm tools.

Most TVEs emerged during the Reform period in the 1980s (Huang, 2008). Though there were 12 million TVEs by 1985, there were only 1.5 million in 1978, at the start of the Reform period. As Huang summarizes: "Clearly, the vast majority of TVEs had nothing to do with the Great Leap Forward."

The reforms of 1978 changed TVEs, which became the most vibrant part of the Chinese economy as they experienced significant expansion in the 1980s and early 1990s. TVE employment grew from 28 million in 1978 to a peak of 135 million in 1996. Likewise, production of TVEs increased to 1.8 trillion yuan in 1992 from 49 billion yuan in 1978. More than half of TVE production in the 1980s occurred in Guangdong, Fujian, Zhejiang, Jiangsu, and Shandong provinces, all of which border the Pacific Ocean. In Jiangsu and Shandong TVEs employed some 30 percent of the rural workforce.

TVEs referred to the location of the enterprises, as opposed to the ownership structure. That is, TVE never referred to only companies owned by township and villages; rather, TVE refers to companies located in townships and villages. Huang (2008) quotes a Chinese Ministry of Agriculture document from 1984 in support of this: TVEs include enterprises sponsored by townships and villages, the alliance enterprises [private stock companies] formed by peasants, other alliance enterprises, and individual enterprises." Some collective TVEs were notable for their unique ownership and corporate governance setup.

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