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Capital Formation in Communist China*

Published online by Cambridge University Press:  17 February 2009

William W. Hollister
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Extract

The present situation in China's heavy industry is a strange sequel to the programme for rapid industrialisation that took place from 1950 to 1960. Production of steel and other heavy industrial products were once proudly broadcast to show China's progress. Now the Chinese planners stress only the ways in which heavy industry can support agriculture. The priority once given to heavy industry is now a political liability rather than a basis for feelings of national pride. Behind the euphemistic description of present objectives in industry as “work to readjust, consolidate, fill out and raise standards” is a situation where the planners show little interest in maximising production in heavy industry. This serious setback to the programme for rapid industrialisation needs to be interpreted in the light of the trends in capital formation that have occurred since 1950.

Type
Research Article
Information
The China Quarterly , Volume 17 , March 1964 , pp. 39 - 55
Copyright
Copyright © The China Quarterly 1964

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References

1 People's Daily (Jen-min Jih-pao), 1, 1963.Google Scholar

2 The percentages given are only rough approximations. The figures for gross national product (GNP) in current prices given in my book (China's Gross National Product and Social Accounts—1950–57 [Glencoe, Ill.: The Free Press, 1958])Google Scholar need to be revised primarily because of data indicating a higher level for changes in inventories. In lieu of a revision of the estimates in my book, the percentages given for 1950–57 are based on adding half of the statistical discrepancy in each year to the end-use estimates for GNP. For 1958–59 the preliminary calculations in my article are used with the estimated GNP in 1959 rounded to 150 billion yuan. See “Estimates of the Gross National Product—1958–59,” in Realities of Communist China (Marquette University: Studies in Business and Economics, 10 1960).Google Scholar

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6 This classification is the same as Rosovsky's distinction between traditional investment and new investment except that the term “modern” is preferred because of the ambiguity discussed below. Rosovsky, op. cit., pp. 16–18.Google Scholar

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13 Ibid., pp. 81–83.

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24 Ibid., pp. 29–33,57–58.

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