The machine-building industry is one of the newest branches of modern industry in China. Even as late as 1949, machinery accounted for only 2·7 per cent. of the nation's gross industrial output value. Since 1952, however, the industry has been given a high priority in development plans; in official statements, it is often referred to as “the basis for technological transformation of the national economy” and “the pillar of national defence.” By 1966 the relative share of machinery production in total gross industrial output value had increased to 12 per cent., making it one of the most dynamic branches of Chinese industry. A study of this industry not only serves as a gauge of China's potential economic and military strength but also illustrates the role of machine-building in the development of an under-developed economy.