The reduced influence of soft budget constraints is often seen as an explanation for the successful growth of China's non-state sector. Views differ, however, as to whether rural enterprises (REs) are in fact subject to hard financial discipline. This paper reports an inquiry into the issue. The...

The reduced influence of soft budget constrints is often seen as an explanation for the successful growth of China's non-state sector. Views differ, however, as to whether collectively owned rural enterprise are in fact subject to hard financial discipline. This paper reports an inquiry into the...