The "grasping the large and letting the small go" policy () was part of a wave of industrial
reforms implemented by the
central government of the People's Republic of China in 1996. These reforms included efforts to
corporatize state-owned enterprises
A state-owned enterprise (SOE) is a government entity which is established or nationalised by the ''national government'' or ''provincial government'' by an executive order or an act of legislation in order to earn profit for the governmen ...
(SOEs) and to downsize the
state sector
The public sector, also called the state sector, is the part of the economy composed of both public services and public enterprises. Public sectors include the public goods and governmental services such as the military, law enforcement, infra ...
.
The slogan and strategy were popularized by President
Jiang Zemin and Premier
Zhu Rongji in 1997.
The "grasping the large and letting the small go" policy was adopted in September 1997 at the 15th
Communist Party Congress. The "grasping the large" component indicated that
policy-maker
Policy is a deliberate system of guidelines to guide decisions and achieve rational outcomes. A policy is a statement of intent and is implemented as a procedure or protocol. Policies are generally adopted by a governance body within an organ ...
s should focus on maintaining state control over the largest state-owned enterprises (which tended to be controlled by the central government).
"Letting the small go" meant that the central government should relinquish control over smaller state-owned enterprises. Relinquishing control over these enterprises took a variety of forms: giving
local governments authority to restructure the firms,
privatizing them, or shutting them down.
[Barry Naughton, The Chinese Economy: Transitions and Growth (Cambridge, MA: MIT Press, 2007), 301-302.]
See also
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Economy of China
The China, People's Republic of China has an upper middle income Developing country, developing Mixed economy, mixed socialist market economy that incorporates economic planning through Industrial policy, industrial policies and strategic Five- ...
*
SASAC
The State-owned Assets Supervision and Administration Commission of the State Council (SASAC) is a special commission of the People's Republic of China, directly under the State Council. It was founded in 2003 through the consolidation of variou ...
*
Guo jin min tui
''Guo jin min tui'' (国进民退) is an alleged phenomenon in the Chinese economy, meaning "the state enterprises advance, the private sectors retreat".
Despite being less profitable - the average return on equity is 4% - state-owned enterprise ...
Notes
'Letting Go of the Small': An Analysis of the Privatisation of Rural Enterprises in Jiangsu and ShandongSamuel P.S. Ho; Paul Bowles; Xiaoyuan Dong. Source: Journal of Development Studies, Volume 39, Number 4, April 1, 2003, pp. 1–26(26)
Muluan Wu. Source: Twenty-First Century, Volume 110,2008, pp. 24–35
{{Economy of China
Economic history of the People's Republic of China
Ideology of the Chinese Communist Party