In 1948 the twin policies of "democratisation" and "enterprisation" were put forward for application in Chinese industrial enterprises in the liberated areas. This essay explores the meaning of these two policies in the period of New Democracy down to the first year of the first Five Year Plan (1949-53). "Democratisation" is examined in terms of the establishment of factory management committees and the Democratic Reform Movement which sought to remove "feudal elements" from factory management. We note that a switch occurred from a representative to a participatory definition of democracy. The term "enterprisation" is examined in terms of the establishment of a unified command structure within industrial enterprises, the adoption of a Soviet model of incentive and planning and the conclusion of intra-enterprise contractual agreements. Finally, an attempt is made to specify the roles of enterprise Party and union organisations. The essay notes that throughout the period there occurred a contradiction between policy and resources which was most marked with regard to technically and politically competent personnel. This lack of necessary resources made elements of the Soviet model unrealistic in a Chinese context and sometimes resulted in patterns of organisation and incentive which were not at all in accordance with the prescriptions of that model. The adoption of the Soviet model was further complicated by the rural tradition of the Chinese Communist Party and constant reference is made in this essay both to Yenan in the 1940s and to later periods when older views on organisation and incentive reasserted themselves and when it was seen that many of the problems that began to occur in this early period demanded radical solution. The focus of this essay is political (concerned with power) and sociological (concerned with roles and structures) and relies heavily on secondary sources for economic analysis
