Private ventures have contributed significantly to the rapid pace of rural industrialisation following market reform. Many also specialized in commercial activity as merchants, distributors, peddlers, and shopkeepers. Their activities have sparked the beginnings of a commercial revolution in rural China. This article seeks to identify the institutional context that promotes or inhibits the rise of such peasant entrepreneurship in China after market reform. This article focuses on the effect of state microinterventions on the emergence of peasant entrepreneurship in China. We advance the argument that direct bureaucratic microinterventions, whatever their intent, whether to promote economic growth or to constrain market action, have the effect of discouraging entrepreneurship despite the existence of market opportunities. Our analysis examines the effect of turbulence caused by bureaucratic mobilization on private enterprises in the second economy. The Chinese economic reform proceeded rapidly in agriculture after 1978 but faltered in the cities, as a result the Chinese second economy is predominantly rural in composition, and its basic units are the peasant household firms. -from Authors
