1. The rankings refer to the 1984 positions as given in State Statistical Bureau, Zhongguo gongye jingji tongji ziliao, 1949–84 (China's Industrial Economy: Statistical Materials, 1949–84) (Beijing: Zhongguo tongji chubanshe 1985), p. 206.Google Scholar

2. See Yeh, K. C., “Macroeconomic changes in the Chinese economy during the Readjustment,” in The China Quarterly (CQ), No. 100 (December 1984), pp. 701–702.Google Scholar

3. Cf. Kuznets, Simon, “Growth and structural shifts,” in Galenson, Walter (ed.), Economic Growth and Structural Change in Taiwan (Taibei, 1979), pp. 56–57, and 124.Google Scholar

4. The concept of technological dualism was first developed by American economists, notably R. S. Eckaus in the 1950s, to characterize the contrast in most developing countries between their relatively developed coastal area (as a result of colonial rule) and the vast under-developed rural hinterland. The late Professor Alexander Eckstein was the first western scholar, as far as I know, to apply this concept to describe the Maoist economic strategy of “walking on two legs” during the Great Leap Forward period of the late 1950s (i.e. the simultaneous development of indigenous and modern-western technologies in line with China's factor endowment). See his Communist China's Economic Growth and Foreign Trade: Implications for U.S. Policy (New York: McGraw Hill, 1966), p. 32.Google Scholar

5. On the various problems impinging on rural industry in China prior to the reclassification, see my Economic Planning and Local Mobilization in China (London: School of Oriental and African Studies, University of London, 1985. Research Notes and Studies, No. 7).Google Scholar

6. Cf. Croll, Charles R. and Yeh, K. C., “Balance in coastal and inland industrial development,” in Joint Economic Committee, U.S. Congress, China: A Reassessment of the Economy (Washington D.C.: U.S. Government Printing Office, 1975), pp. 81–93.Google Scholar

7. There is a considerable western literature available on this subject, with differing viewpoints and judgments. The earlier ones include Wheelwright, E. L. and McFarlane, Bruce, The Chinese Road to Socialism (New York and London: Monthly Review Press, 1970)Google Scholar. Lardy, Nicholas, “Economic planning in the People's Republic of China: central-provincial fiscal relations,” in China: A Reassessment of the Economy, pp. 94–115,Google Scholar for example, differs substantially from Audrey Donnithorne, The Budget and the Plan in China: Central-Local Economic Relations (Canberra: Australian National University Press, 1972),Google Scholar concerning the degrees of centralized control and regional self sufficiency and autarky. For a more recent discussion, see Lyons, Thomas P., Economic Integration and Planning in Maoist China (New York: Columbia University Press, 1987).Google Scholar

8. See Tien-tung Hsueh and Tun-oy Woo, “The political economy of the heavy industry sector in the People's Republic of China,” in The Australian Journal of Chinese Affairs, No. 15 (January 1986), p. 72. No source is given for the figure cited.

9. Many projects were presumably launched without adequate supporting facilities.

10. Field, R. M., “China: The changing structure of industry,” in Joint Economic Committee, U.S. Congress, China's Economy Looks Towards the Year 2000 (Washington D.C.: U.S. Government Printing Office, 1986), p. 528.Google Scholar

11. Perkins, Dwight, Market Control and Planning in Communist China (Cambridge: Harvard University Press, 1966), p. 60.Google Scholar

12. This refers to the immanent urge on the part of the central planner to build supra scale plants maximally to exploit scale economies ignorant of possible transport diseconomies. See, for example, Campbell, Robert W., Soviet Economic Power (Cambridge, Mass.: The Riverside Press, 1960), p. 108.Google Scholar

13. Redfield, Robert, Peasant Society and Culture (Chicago: University of Chicago Press, 1956).Google Scholar

14. TJNJ 1988, p. 391.

15. See notes to Table 3.

16. See Table 5.

17. See Y. Y. Kueh, Economic Planning and Local Mobilization in Post-Mao China, p. 34.

18. TJNJ 1988, p. 32.

19. Ibid.

20. For a more detailed analysis of the dilemma, see my “Economic reforms in China: approach, vision, and constraints,” in Dieter Cassel (ed.), Wirtschaftssysteme im Umbruch: Sowjetunion, China und industrialisierte Marktwirtschaften zwischen internationalem Anpassungszwang und nationalem Reformbedarf (forthcoming).

21. See my “Bureaucratization and economic reform in Chinese industry,” in Klenner, Wolfgang (ed.), Trends of Economic Development in East Asia (Berlin and Heidelberg: Springer Verlag, 1989), pp. 381–92, for the background to the emergence of the “double-track system” in China; also C. H. Chai and Y. Y. Kueh “The dilemma of the double-track planning system in China,” paper presented at the international Symposium on The Retrospect and Prospect of Economic Reform in China from 1979 to 1988, sponsored by the Research Centre for Economic, Technological and Social Development, The State Council, the People's Republic of China, in Shenzhen, China, 7–13 November 1988.CrossRefGoogle Scholar

22. Steven Cheung seems to be the first prominent American Chinese scholar to have raised this important issue within the Chinese context of economic reforms. Since his Will China Go Capitalist? (London: Institute of Economic Affairs, 1982) was published, he has persistently advocated (through the Hong Kong Chinese press) a fully-fledged privatization of state enterprises in China. His view has increasingly found favour among many Chinese scholars, especially the younger economists who have had the opportunity to be exposed to western economics in recent years. However, as I ventured to expound at the Shenzhen Conference (cited in fn. 21), what is at stake is not so much the system of state ownership per se, but the established strategy of Soviet-style forced draft industrialization. What follows in the next paragraph is essentially taken from my statements made at one of the plenary sessions at the Shenzhen Conference.Google Scholar

23. Kueh, Y. Y. and Howe, Christopher, “China's international trade: policy and organizational change and their place in the “Economic Readjustment” in CQ, No. 100 (December 1984), p. 832.Google Scholar

24. TJNJ 1988, p. 723.

25. See my “Economic decentralization and foreign trade expansion in China,” in Chai, J. C. H. and Leung, C. K. (eds.), China's Economic Reform (Hong Kong: Centre of Asian Studies, Hong Kong University, 1987), pp. 444–81.Google Scholar

26. This view was given by Professor Li himself at a public lecture sponsored by South-east Economic Centre, Hong Kong, in January 1988.

27. The fact that the Chinese capital accumulation ratio cannot be easily scaled down despite a renewed official policy intention to do so has been pointed out, explicitly or implicitly, by a number of western scholars. See K. C. Yeh, “Macroeconomic changes in the Chinese economy during the readjustment,” p. 709, and Perkins, D. H., “Reforming China's economic system,” in Journal of Economic Literature, Vol. XXVI (June 1988), p. 602. Cf also Shigeru Ishikawa, “China's economic growth since 1949-an assessment,” CQ, No. 94 (June 1984), pp. 257–59.Google Scholar

28. See the Institute of Industrial Economics, Chinese Academy of Social Sciences, Jingji fachang yu jingji gaige (Economic Development and Economic Reform) (Beijing: Jingji guanli chubanshe, 1988), p. 92. The projected “quadrupling” implies that the gross value of agricultural output is to grow by 5.5%, and that of industrial output by 7.8% per year from 1980 to 2000.Google Scholar

29. The GVIO growth rate for 1978–87 is 12%, and 1980–87, 12–8% per year. See TJNJ 1988, p. 29.

30. See TJNJ 1988, p. 39.

31. Cf. Andrew Watson, “Investment choices in the Chinese countryside,” in Australian Journal of Chinese Affairs (forthcoming); see also my “China's new i e B agricultural policy program: major economic consequences 1979–1983,’ in Journal of Comparative Economics, Vol. 8, No. 4 (December 1984), pp. 365–66. There are of course other factors restraining peasants from making agricultural overhead investment. An important factor remains unfavourable prices for agricultural output compared with that for industrial products.Google Scholar