plant, but the local government had invested in it; essentially, it was owned by the
local government ... Only the government of the autonomous region could close it,
but obviously it didn’t want to do so as it would lose revenue.’^12Yet other observers suggest that, in general, privatization of TVEs may lead
to shrinkage of enterprises that ‘are inefficient, waste resources, and cause
excessive environmental damage relative to their economic contribution’.^13
However, while competition may reduce the number of inefficient TVEs, it
will not necessarily cause them to adopt conservationist interests in the near-
term, meaning that they, like SOEs, increase the challenge to environmental
sustainability.
A second part of the non-state sector is composed of Chinese joint ventures
of foreign firms, usually multinationals. At the outset of economic reforms,
these were few in number, but with China’s drive for foreign direct investment
(FDI) in the 1980s, they mushroomed. We discuss western multinationals
below.
The third part of the non-state sector is composed of individual and family
proprietorships, which are equivalent to Taiwan’s small and medium-sized
enterprises (SMEs). Most of these businesses are concentrated in the service
sector (for example, restaurants, hair salons, convenience stores), and their
output value has been increasing faster than that of agriculture or industry.
Their number has increased greatly too, but they comprise a relatively small
part of the Chinese gross domestic product (GDP) and pose less of a threat to
biodiversity conservation.
Overall, the non-state sector has been the most dynamic part of the Chinese
economy since the 1980s and accounts for over half of Chinese GDP. Within
the non-state sector, TVEs present the greatest challenge to local ecosystems.
Those SOEs involved in energy production, as we shall see, are a threat on the
regional scale.
STATE-BUSINESS RELATIONS
The relationship between states and economic organizations, such as factories
and business firms and their representatives, varies cross-nationally. In broad
terms, groups may organize freely and stand in opposition to the state, a
bottom-up system called ‘pluralism’ (which depends on a civil society), or the
state may organize groups and direct their energies, in a top-down system
called ‘corporatism’. Our discussion focuses on businesses (and to a lesser
extent with labor organizations) in China and Taiwan, and whether they
compete freely or are directed by the state largely is explained by the period
when industrialization occurred in the nation and the strength of the state at
that time.
Business organizations and biodiversity conservation 137