Western economists who are interested in the analysis of the contemporary Chinese economy are currently confronted with challenging analytical tasks arising from two remarkable events. The first is the new post-Mao government's attempt to reform the economic system of centralized, physical planning that characterized the Mao regime in the direction of a system of decentralized and market-orientated planning (referred to as “reform” policy). Side by side with this systemic reform, the previous development policy of high growth and high investment, which gave top priority to heavy industry, is being replaced by a new one which aims at securing a steady increase in personal consumption and in which investment allocation is weighted in favour of light industry and agriculture. Of these new strategies, the latter is already being rigorously put into force (and even accompanied by a drastic deflatory effect), starting with an interim measure to reduce the over-inflated production of heavy industry in favour of raising that of light industry and agriculture (referred to as “adjustment” policy). The former component for the systemic reform of the economy is still at an experimental stage, but Chinese planners and economists appear to be very busy in discussing and preparing even more comprehensive reforms.