Central–provincial budgetary relations are among the most significant, intricate and obscure facets of Chinese governmental procedures. Audrey Donnithorne and Nicholas Lardy illuminated central–provincial budgetary relations to 1959, and more recent writings by Donnithorne, Barry Naughton and Dorothy Solinger have brought aspects of the story forward. Based on recently-published Chinese materials, this article traces the evolution of the formal system in central-provincial relations from 1971 to 1984. A new fiscal regime was supposed to begin in 1985 but was never fully implemented because lack of progress in the reform to replace enterprise profits with taxes. The regime since 1984 has been largely a continuation of the 1980–84 fiscal management system, with some new incentives for provinces to collect more revenue. The post-1984 arrangements are well described to collect more revenue. The post-1984 arrangements are well described in a recent World Bank study. This argicle, therefore, fills a gap in the current literature and untagles the complicated and rather obscure story for the 1971 to 1984 era.

On 17 August 1982 the United States and the People's Republic of China publicly announced their joint communiqué concerning the question of American arms sales to Taiwan. This agreement was reached after 10 months of negotiations. While reiterating that it was not pursuing a policy of “two Chinas” or “one China, one Taiwan,” the United States offered the following statement on the question of arms sales to Taiwan:

Chinese foreign policy is typically a complex mix of bilateral, regional and global considerations shaped by the perceptions and domestic political concerns of various participants in China's decision-making process. One significant factor shaping Chinese foreign policy over the past decade which has not been given adequate attention is Chinese consideration of South Asia, and especially India. India's size, substantial aggregate national power, central geographic position in South Asia, prominent role in the Third World/Non-Aligned Movement, and the determination of its leaders to establish India as the pre-eminent power in South Asia, have given India significant weight in Chinese foreign policy calculations. This includes, I will argue, Beijing's calculations regarding China's relations with the Soviet Union and the United States.

For over four years from the Marco Polo Bridge incident to Pearl Harbour China fought alone against Japanese military expansionism in the Far East. Both Britain and the United States recognized China's strategic importance but gave relatively little in the way of material help. On the one hand sufficient aid had to be given to ensure that China continued to act as a bulwark against Japanese imperialism and to keep China from gravitating to the Soviet Union (whose aid programme was more immediate, more generous and took the form of military supplies). On the other hand assistance was limited by British resource constraints, by American isolationist public opinion and by the fear, on both sides of the Atlantic, that overt military aid would provoke Japan into widening the conflict into their own respective spheres of interest.

In light of widespread western condemnation of the Tiananmen Square event, it may seem somewhat capricious to raise the issue of the “rule of law” as it is understood in China; however, prior to 4 June the Chinese Communist Party sanctioned a provocative theoretical debate which featured the “rule of law” as opposed to the “rule of man.” Even though the Chinese rule of law derived self-consciously from Chinese ideology and history, it seemed to parallel loosely the substantive concern in the western theoretical notion of “government of laws, not men.”

The tragic events in China of June 1989 have had a considerable influence on the development of the international situation and have triggered a stormy reaction from public opinion in many countries. The stand on the Tiananmen tragedy has become a litmus test of the political position of governments, parties and groupings in a number of states. China's prime minister Li Peng declared in the wake of the events that they had demonstrated who was a true friend of China. A closer study of the issue would reveal that these events in fact led to a situation whereby “friends” and “enemies” (if we agree to identify China's “friends” and “enemies” with those of her premier) reversed roles. Whereas all governments and public and political groups in the west, including some orthodox communist parties, were united in their condemnation of Beijing, China's former opponents whom she used to label as “regional hegemonists,” such as Cuba and Vietnam, as well as East Germany and North Korea who have similar regimes, assured Beijing of their support for its actions.

The most important first step, both symbolically and in practical terms, toward restructuring higher education in China following the destructive years of the Cultural Revolution was the re;establishment of the national entrance examination for universities and graduate schools in 1977. While this had the direct effect of improving the quality of students entering universities, no similar quick fix was available for reinvigorating university faculty. As seen in the I following passage, written by a university administrator in Shanghai, the personnel system at Chinese universities in the late 1970s was not conducive to effective teaching or research.