TVEs thrived from 1978 to 1989, and were largely dismantled between 1989 and 1996. Scholars have given a number of reasons for their success. The political institutional environment favored these “public” enterprises during the early years of reform, since private businesses faced severe restrictions and discrimination in terms of resources and regulations. Also, the fiscal decentralization of the early 1980s gave greater decision-making power to local governments and linked fiscal revenue to the career potential of local officials, creating strong incentives for them to promote these enterprises. The TVEs moved in to take advantage of the gaps left in the market by the State-Owned Enterprises to produce colorful elastic bands, ID card holders, etc. The TVEs benefited from first mover advantage as there was no competition in the early stages from private firms due to restrictions on the markets.The pent-up demand in China for a host of products provided ample profit-making opportunities for enterprises operating at this early juncture. Moreover, TVEs were helped by massive loans from the state banking system.