By Daniel Buck (auth.)
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Extra resources for Constructing China’s Capitalism: Shanghai and the Nexus of Urban-Rural Industries
An industry insider who I had met serendipitously on the subway told me, “It still does all of its own manufacturing. They manufacture the entire thing. They don’t subcontract anything at all. They have a huge workshop with all the different machinery necessary to make the entire instruments. It’s very wasteful. For example, the plastic injection machines are sitting idle every time I go there, because they are only needed for small batches compared to their overall production” (I1). He introduced me to the 1994–99 director of the factory, who explained that “we do contract out the production of components .
Numerous studies point out the importance of SOE subcontracting arrangements to TVE creation and growth or note that most Shanghai TVEs subcontracted for SOEs (Christiansen 1992; Huang 1990; Naughton 1994, 1995; Ning 1997; Wilson 1997; Xie and Ling 1996). 2 percent of Shanghai’s suburban industrial output in 1988 (Qian 1990, 188). Sources vary with regard to how much rural output resulted from subcontracting for urban SOEs, ranging from 48 to 70 percent, respectively (Qian 1990, 186; Xie and Ling 1994, 3), and going as high as 76 percent (Xie et al.
Many final-product factories (zhengji shengchan chang) are still making every kind of part and component themselves; while almost all of the larger factories still have their own foundries, casting shops, and forging and smithing workshops” (Yang et al. 1991, 114). And as I had discovered, overly vertically integrated enterprises continued to exist in Shanghai into the late 1990s. 2. The TV Es: The Rise of Rural Industries In one Shanghai village in the 1970s, the establishment of commune enterprises drew some local workers out of agriculture, but “it was only with the coming of village industries in the 1980s and the vigorous development of small-town industry .