It is almost exactly a decade since the process of change in China initiated by Deng Xiaoping and his political and ideological supporters began to gather momentum. Formally speaking, the decisive break point was, of course, the holding of the Third Plenum in December 1978, but by the spring of that year the confrontation between the “Whateverists” and the supporters of the “practice criterion” had become open and acute.

Following Hu Yaobang's resignation as general secretary of the Chinese Communist Party on 16 January 1987, the political and economic reforms sponsored by Deng Xiaoping since 1978 came under intense criticism. Warning against “bourgeois liberalization” and renewed “spiritual pollution” from the west, Party conservatives reacted to student demonstrations in December 1986 by reversing the “Double Hundred” policy of literary and scientific freedom and by engineering the purge of the ardent westernizers Fang Lizhi, Liu Binyan and Wang Ruowang. Deng Liqun's “Leading Group to Oppose Bourgeois Liberalism,” Chen Yun's Central Discipline Inspection Commission (CDIC), and the outspoken Peng Zhen emerged as the main ideological watchdogs favouring restrictions on individual expression. But even the pro-reformer Zhao Ziyang condemned western ideas as “pernicious,” just as his chief secretary Bao Tong, warned intellectuals against “writ[ing] only about (the merits) of developed capitalist countries.”

Since the Third Plenum of the 11th Party Congress in December 1978 China's leaders have moved decisively to restructure the nation's economy. However, it now appears that while the decollectivization of agriculture has dramatically reoriented rural society, entrenched urban bureaucracy prevents a comparable change in the cities. Analysis of personnel policy, and in particular examination of expanded pension programmes, further articulates the nature of these entrenched interests, revealing in detail why post-Mao urban reforms have maintained, even intensified, privileges which rural reforms have transcended or eliminated.

Measures of society's stock of fixed assets are necessary for describing production technology, evaluating capital-output ratios and analysing multi-factor productivity. Even in advanced industrial economies, existing series of fixed capital incorporate many weaknesses and arbitrary assumptions; in low-income nations, these problems are often severe. China is no exception. While recognizing the inherent difficulty of compiling capital stock estimates for an economy in which prices have long deviated from scarcity values, this article uses currently available materials to derive an improved time series of fixed capital stock for independent accounting units within Chinese state industry. Our objective is to produce new series that adhere as closely as possible to the standard national accounting concepts of gross domestic fixed capital formation and gross reproducible fixed assets. Despite the difficulties mentioned below, we believe that our new series are distinctly superior to existing figures for the analysis of capital deepening, multi-factor productivity and other aspects of Chinese state industry requiring estimates of fixed capital stock.

Chinese culture has always been considered unique in its enduring concern with morality. There is a commonly used phrase which well expresses this: guyou daode wenhua, which may be translated as “a culture which is traditionally moral.” This phrase is often used to describe the Chinese as opposed to other cultures which lay their emphasis on knowledge, religion, law, and so forth. A Chinese educator has recently made this point in contrasting Chinese and western philosophies of education. Whereas western cultures have traditionally stressed science (knowledge), religion and law, he says, Chinese culture has always stressed morality and art.