Capitalism with Chinese Characteristics: Entrepreneurship and the State

by Yasheng Huang

This gets to one of the least known stories about rural China in the 1980s – private-sector financing from the Chinese banks was sizeable. (I provide more details on this issue in the next chapter.) In Zunyi county, the rural credit cooperatives (RCCs) – a critical financing vehicle for private-sector development in the 1980s – increased their lending by 65 times in just three years between 1979 and 1982. In 1979, lending to rural households was 4.53 percent of that to collectives. In 1982, the lending to rural households was 3.5 times of that to collectives. Between 1982 and 1988, lending to households rose sharply, from 14.6 million yuan to 22.8 million yuan, while lending to collectives – including collectively run firms – remained roughly constant during this period.