Ownership, Competition, Management and Labour in Public Enterprises Transition: Literature Review

China's transition from a planned to a market economy achieved remarkable success through a gradual approach. Such transition was accompanied by the transformation of public enterprises. This paper conducts a literature review in relation to the three main arguments discussed above and sets up a theoretical perspective for the analysis in transition. The methods of this paper are embodied in a triangulation strategy, including a structured questionnaire, in-depth semi-structured interviews, literature research, and analysis of government documents and other relevant data sources. The rest of this paper is arranged as follows. It first reviews the reasons and objectives for the establishment of public enterprises, which is aimed to constitute a part of the basic framework of understanding why PEs were established and where the possible sources of PE problems lie. Secondly, the main theme is developed by examining the debates concerning the mechanisms for the improvement of public enterprise performance. These include three aspects: ownership, competition and management reform. Finally, it reviews labour issues associated with the transformation of public enterprises in transition. Drawing on the literature review of public enterprises transition, this study found that a broad concept of competition, ownership, management and labour (COML) framework could be essential in guiding a smooth transformation of public enterprises as well as economic transition from plan to market. In this study, the transformation of public enterprises has been more likely to be successful when achieved through a gradual approach, as ownership change has constraints, and preconditions such as supporting institutions, which takes time to establish and function in an emerging new market environment. Moreover, labour interacts with the transformation of public enterprises, especially in the situation where there is a lack of a well-established social security, the consequences for labour from the transformation of public enterprises can be considerable.