W. Emergence of Capitalism

Private enterprise started to make big inroads in Chinese commerce and industry. In Fuxin, a city of 700,000 people in Liaoning Province, the city discovered in 1987 that they had about 1300 state-run businesses, shop, and factories operating at a loss. The city had simply run out of money. They sold all of them at auction and by 1988, all had shown a profit. One sock-knitting factory had lost more than $100,000 in 1985 and again in 1986. A factory worker posted a surety bond of $3000 to be forfeited if she did not make a $20,000 profit. Anything over that she could keep for herself after paying taxes. By using modern management practices she made a profit of $200,0000 in the first year, 1987.