Industrial Bureaus

Every industrial bureau manages a cluster of enterprises in similar lines of production. Their finance and planning departments are the ones most actively involved in decisions regarding investment projects and their tax treatments.^[14] Whenever an enterprise manager wants to engage in an investment project, he must first get the approval of its industrial bureau. Every project must be approved and put into the city's construction or renovation plan. Small projects that are paid for entirely by an enterprise's own funds are routinely approved, but they must still be approved by the bureau and counted toward its city-delegated quota of industrial investment for the year. Anything

[12] See Barry Naughton, "Finance and Planning Reforms in Industry," in China's Economy Looks Toward the Year 2000 , vol. 1, The Four Modernizations , Joint Economic Committee, Congress of the United States (Washington, D.C.: U.S. Government Printing Office, 1986), 629.

[13] See Barry Naughton, "The Decline of Central Control Over Investment in Post-Mao China," in Policy Implementation in Post-Mao China , ed. David M. Lampton (Berkeley and Los Angeles: University of California Press, 1987), 60.

[14] Each department (chu ) assigns an individual to take charge of a single enterprise or, in the case of smaller ones, several. These are often people who had worked in the enterprise in the past.

large enough to require a loan—all but the smallest projects—must be studied, approved by the bureau, and then taken to higher levels of government to arrange financing and put the project into the city's industrial-investment plans.^[15]

For the enterprise, the bureau is the first and easiest step in a process that usually takes between three months and a year. Industrial bureaus generally support any project that will improve or expand the capacity of their enterprises. But they are limited by city investment plans, which ration investment projects to various lines of industry and cannot champion every proposal brought to them, at least not immediately. They therefore evaluate enterprise proposals and authorize full-scale feasibility studies for the ones approved, after which they go to other government agencies to get permission and funding. Enterprises whose initial proposals are rejected will work with the relevant officials in the bureau to come up with a better proposal in the immediate future.^[16] The bureau's primary function in this area is to strengthen proposals that it forwards to higher levels, while keeping within the overall limits placed on investment.