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Contracts in China Revisited, With a Focus on Agriculture, 1949–63*

Published online by Cambridge University Press:  17 February 2009

Richard M. Pfeffer
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Extract

For A Western-trained lawyer considering contracts within the context of a planned economy, three caveats are in order at the outset. First, plans inevitably involve consultation, which easily shades over into negotiation at the stages of formulation and implementation (the latter often requiring re-formulation). In this sense, plans are not wholly antithetical to the concept of agreement between concerned parties. Second, subject to that qualification, a primary function of contracts in a planned economy is to implement the planners’ preferences. Consequently, it is to be expected that the degree of private autonomy associated with contracts in the West will be restricted. Finally, in Western societies also the parties are limited, to a lesser degree to be sure, in the terms they may incorporate in a contract; e.g., minimum wage laws set limits on wage provisions. Thus, in the theoretical spectrum from wholly unrestrained, enforceable agreements to pure commands, both plans and contracts in practice fall somewhere in the middle in all societies.

Type
Chinese Communist History and Historiography
Information
The China Quarterly , Volume 28 , October 1966 , pp. 106 - 129
Copyright
Copyright © The China Quarterly 1966

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References

1 The evidence often is scattered, and also may carry a bias tending to stress the state's role in agricultural contracts. No evidence has been found, for example, of contracts in which the state has not played some role. This has led me to conclude that such contracts either do not exist or are insignificant.

2 To some degree, contracts everywhere involve similar contradictions; see Pfeffer, “ The Institution of Contracts”, part I. I was provoked to pursue the issue of contradictions by Schumann's, Franz brilliant new book Ideology and Organization in Communist China (Berkeley: University of California Press, 1966Google Scholar). In this article, however, I did not use the concept of contradiction in the highly technical way Schurmann does; see, for example, pp. 75–76 and 101–103 in his book. Schumann's usage is discussed in my review-note of his book in a forthcoming issue of Pacific Affairs.

3 See, for example, Chien-hsin, Jen, “Strengthen the Economic Contract Work and Promote the Smooth Execution of National Economic Planning”, Cheng-fa Yen-chiu (Political-Legal Research), No. 1, 1957, p. 31Google Scholar; “How to Develop Contract Management”, People's Daily, April 1, 1950; Li-ch'un, Ts'ui, “Several Problems That Should Be Attended to and the Function of the Contract System with Regard to Rural Sideline Production and Marketing”, Chung-kuo Nung Pao (Chinese Agricultural News), I, No. 6, 1950, p. 67Google Scholar; Ch'eng-shui, Li et al. , “Broadly Carry out the Contract System”, Ta Kung Pao, 02 20, 1959Google Scholar.

4 The 1954 Charter of the All-China Headquarters Supply and Marketing Co-operative in Peking reflects the degree to which these co-operatives are simply organs for carrying out state policy. In that charter the major tasks of the co-operatives are listed as the planned organisation of buying and selling in the countryside, the expansion of exchange between city and village, the development of co-operative commerce and, implicitly, the displacement of private commerce, the promotion of the co-operativisation of agriculture, and the raising of the standard of living of the SMC members. People's Daily, November 30, 1954.

The SMCs form a hierarchy in which the lower levels are subject to control from above and in which SMCs at all levels are subject also to control by relevant state and party organisations of the same or higher levels.

5 In 1953, for example, about 75 per cent, of total purchases by the SMCs was for the state. Tzu-hua, Ch'eng, “Struggle to Further Develop the Exchange of Materials between City and Town, to Promote the Movement to Increase Agricultural Production, Taking Mutual Aid and Co-operation at its Core, and to Aid Industrialisation of the Country”, People's Daily, 11 30, 1954Google Scholar.

6 Ch'i-shan, Liu, “The Combined Contract is a New, Independent Contract System”, Cheng-fa Yen-chiu, No. 3, 1957, pp. 37–40Google Scholar. It should be noted, however, that there are a number of variant forms that have appeared at different times; e.g., t'ung-kou, p'ai-kou and yi-kou contracts. It is very difficult, and perhaps not worth the trouble, to distinguish among all the forms. As Gene Hsiao points out in his article “The Role of Economic Contracts in Communist China”, California Law Review, 53, No. 4, 10 1965, pp. 1029–1060CrossRefGoogle Scholar at p. 1052, the t'ung kou and p'ai-kou contracts generally involve goods in categories one and two respectively, while the yi-kou contract involves goods in category three. What is said about the advance purchase contract appears to be relevant to t'ung-kou and p'ai-kou, and what is said of the combined contract seems relevant to yi-kou.

7 Che-jen, Li, “The Combined Contracts of the SMCs, APCs, and Mutual Aid Teams of Two Villages”, New China Monthly, 05 1952, pp. 107–108Google Scholar.

8 Liu Ch'i-shan, note 6 above.

9 “The Directive Issued by the Cabinet for This Year's Advance Purchase of Cotton”, People's Daily, March 23, 1955.

10 “The Directive Issued by the Cabinet for the Work of the Advance Purchase of Cotton”, People's Daily, December 23, 1955.

11 “Unified sales” is a system of rationed distribution applied to important materials.

12 Liu Ch'i-shan, note 6 above, p. 40.

13 With regard to the advance purchase contract there is evidence that the monetary advances have been made. This tends to support the position that a priority is involved. See “Directive of the Headquarters Branch of the People's Bank and the Grain Ministry Regarding Doing Well the Work of Supplying Capital for Summer Edible Oil Purchases”, People's Handbook, 1962, p. 214. On the other hand, there is also evidence that the relationship between the parties may involve a fixed advance in kind to the agricultural producer, an advance that is arranged simultaneously with the signing of the contract, if not as a part of the contract itself. The purpose of this arrangement is to insure that the advance made will be employed in a manner that will benefit production. In this case it appears unlikely that the agricultural producer has an option to buy or not to buy. See “The Making of Advance Deposits in Advance Purchase of Cotton Must Be Combined with the Supply of Materials”, Ta Kung Pao (Peking), 04 24, 1963Google Scholar. In any event, in light of the urgent needs of the peasants and the limited range of goods involved in advances in kind, in practice it is very likely that priority rights will always be exercised and that the end result in both the advanced purchase and combined contracts may be nearly the same.

14 Liu Ch'i-shan, note 6 above, p. 40.

15 “Several Problems in the Contract System after Communization”, Cheng-fa Yenchiu, No. 4, 1959, p. 34Google Scholar; Li Ch'eng-shui, note 3 above; Hua, Lou (pen-name for Liu Yung-hua), “The Lock and Chain on the Neck of the Mainland Small Trader–Discussing the Chinese Communists’ Co-operative Undertaking of the Supply and Marketing ‘Combined Contract’ System”, Tsu-kou Chou-k'an (Motherland Weekly), 12, No. 2, 10 10, 1955, p. 16Google Scholar. Since this magazine is published in Hong Kong by an organisation with a known anti-communist bias, it is perhaps proper at this point to suggest that, the pejorative character of the title notwithstanding, most articles written by Liu Yung-hua are reasonably objective, well-reasoned and often stimulating.

16 See below for a discussion of retail trade in these commodities in the rural markets (chi-shih).

17 “Hsi Liang Large Brigade Signs an Advance Purchase Contract for Cotton with the State”, Ta Kung Pao (Peking) 02 2, 1963Google Scholar.

18 “It is Necessary to Seasonably Arrange the Work of Advance Purchase of Cotton”, People's Daily, December 23, 1955.

19 Lou Hua, note 15 above, p. 13.

20 Liu Ch'i-shan, note 6 above. The contract is said to “combine” (1) purchases of agricultural and sideline commodities with (2) sales to the agricultural production unit of materials it needs for production and livelihood. The contract thereby indirectly combines the production and consumption plans of the agricultural production unit with the supply and marketing plans of the SMC. In light of the hierarchical structure of the SMCs and their subordination at all levels to state organs of commerce, agriculture, light industry, etc., ideally these contracts also ultimately “combine” the basic agricultural production unit's plans with the needs of the relevant area's economy.

21 “Extend the Combined Contract between the Mutual Aid Teams and the Co-operatives”, People's Daily editorial, April 10, 1952. The first three clauses of the model contract provide that the SMC is to give the mutual aid team priority in services and supply, to favour the mutual aid team in marketing its native products that are difficult to sell, and to arrange needed loans for the mutual aid team through credit units. Under the fourth and fifth clauses the mutual aid team promises to use the SMC exclusively for its sales and purchases. The team also promises that, in order to co-ordinate sales and purchases, at the middle of each month it will present its plans for the following month's needs and sales as the basis for signing concrete executing (chü-t'i chih hsing) supply and marketing contracts with the SMC. The seventh clause provides that the SMC will help the team make its plans and will participate in meetings of the team. The commercial unit, thereby, is given a lever for directly influencing the formation of the production unit's plans.

22 Generally paralleling the geographic pattern of the communist takeover, the combined contract began, and was most widely developed during the early years, in the provinces of north and northeast China. It is said to have developed in Yung Chi county of Kirin province a year or two before it was officially spread. Its real development, however, came after the April 10, 1952, People's Daily editorial referred to above. Based on incomplete statistics for north China, it appears that some 2,500 basic-level SMCs concluded combined contracts with over 90,000 mutual aid teams and APCs in 1952. But it is clear that these early contracts were on the whole unsuccessful; in many areas it appears contracts were signed as a mere formality in order to satisfy official exhortations. Often the cadres of the SMCs were not themselves clear as to the nature of the combined contract. Performance was spotty and varied greatly from place to place. For typical sources from 1952–56 see: “The 1952 Plan and the Contracts Concluded between the Erh Tao K'ou SMC…and the Hsieh Yun Hu Mutual Aid Team”, People's Daily, April 10, 1952; “Actively and Steadily Extending the Combined Contract is One of the Most Powerful Measures for Promoting the Socialist Transformation of Agriculture”, People's Daily, June 28, 1954; “Continue to Implement the Supply and Marketing Combined Contract System”, Southern Daily, November 9, 1954; “Our Cities Develop in Large Amounts the Combined Contract for Vegetables”, Lu-ta People's Daily, April 4, 1955 (?); “Spread the Contract System and Do the Work of Supplying Production Materials Well”, Ta Kung Pao (Tientsin), 05 13, 1956Google Scholar; “Widely Spread and Realistically Perform Combined Contracts”, Yunnan Daily, June 18, 1956; and “179 Production and Marketing Vegetable Combined Contracts were Concluded in the City, A Great Deed in the Work of Reforming the Production, Supply, and Marketing of Vegetables”, Changkiang Daily, November 21, 1956.

23 China News Analysis (CNA), No. 199, October 4, 1957, p. 2.

24 Liu Ch'i-shan, note 6 above, p. 38.

25 Ibid.

26 “The Purchase Price is no t Sufficiently Logical; Some APCs Do Not Perform Their Contracts”, Ta Kung Pao (Peking), 01 4, 1957Google Scholar.

27 “The Cabinet Clearly Fixes the Scope of the Free Market…” Ta Kung Pao (Peking), 08 18, 1957Google Scholar. I have no t found any evidence supporting the popular notion that the free markets actually were closed at this time. Interviews indicate free markets continued to exist up to communisation, when they were starved out out of existence. This conclusion appears to be supported by the statement late in 1958 that “the free market basically no longer exists.” “Decision of the Central Committee of the Chinese Communist Party, and the Cabinet, Regarding Improving the System of Rural Finance and Trade Administration in Response to the Conditions of Communisation”, New China Semi-Monthly, November 1, 1959, p. 63.

28 “ Purchase (p'ai-kou) Work Can't Be Simplified”, Southern Daily, March 20, 1963.

29 “SMCs and APCs Should Conclude Combined Contracts”, Chekiang Nung-ts'un Kung-tsuo T'ung-hsiin (Chekiang Agricultural Work Bulletin), No. 49, 03 4, 1955Google Scholar (as reprinted in Chung-kuo Nung-ts'un de She-hui-chu-yi Kao-ch'ao (Socialist High Tide In Chinese Agriculture) (Peking: People's Publishing House, 1956, middle volume), pp. 679–680).

30 Li Ch'eng-shui, note 3 above.

31 Ibid.

32 Fu-k'ai, Wei et al. , “Several Problems Regarding Implementing the Contract System”, Ta Kung Pao (Peking), 06 5, 1959Google Scholar.

33 Ta Kung Pao, March 4, 1959; Li Ch'eng-shui, note 3 above.

34 “Introduce the Connecting Contract between the An Yang Wu Kuan Supply and Marketing Co-operative, Credit Co-operative and Agricultural Producers' Co-operative, Ta Kung Pao (Tientsin), 05 25, 1954Google Scholar; “The Supply and Marketing Co-operative of Lu Ch'ing County, Wei-tzu Town and Concerned Departments Closely Co-ordinated (p'ei-ho) to Carry Out the Four-way Combined Contract to Help Agricultural Production…” Ta Kung Pao (Peking), 02 25, 1962Google Scholar; “Chinhua Wholesale Station, Concluding Order Contracts with Local Handicraft Producers' Co-operatives, Improved the Production of the Producers' Co-operative and Fulfilled the Supply and Marketing Co-operatives' Requirements for a Source of Goods”, Ta Kung Pao (Tientsin), 11 13, 1953Google Scholar.

35 On the criminal side, see Cohen, Jerome A., “The Criminal Process in the People's Republic of China: An Introduction”, Harvard Law Review, 79, No. 3, 01 1966, pp. 469–533CrossRefGoogle Scholar. And with regard to the disposition of civil disputes, see generally Cohen, , “Chinese Mediation on the Eve of Modernisation”, California Law Review, 54, 08 1966Google Scholar.

36 “Provisional Measures of the Finance and Economic Committee of the Central People's Government Affairs Council Regarding the Signing of Contracts between Organs, State Managed Enterprises, and Co-operatives”, Fa-ling Hui-pien (Collection of Laws and Decrees) (1949–50), p. 532. It appears that these provisional regulations were still in effect at least as late as 1957. Jen Chien-hsin, note 3 above, at p. 33. A similar pattern for settlement of disputes arising from processing and order contracts in industry was referred to in 1955 by Shan, Tseng, then Minister of Commerce. “Special Problems Regarding Processing (chia-kung) and Orders (ting-huo)”, Kung-shang Chieh Yüeh-k'an (Industrial and Commercial Monthly), 03 10, 1955, p. 8Google Scholar; and see Wu, Hsieh, “Discuss the Contract System”, Cheng-fa Yen-chiu, No. 2, 1959, p. 43Google Scholar.

37 Ibid, and “Provisional Measures of the Finance and Economic Committee of the Central People's Government Affairs' Council.…”

38 It is interesting to note that in the Soviet Union failure in the state supply apparently does not excuse a party from performance of his contract obligation. Loeber, Dietrich A., “Plan and Contract Performance in Soviet Law”, University of Illinois Law Forum, Spring 1964, at pp. 148–150Google Scholar.

39 “Several Problems in the Contract System After Communisation”, p. 36. For a brief discussion of the system of business accountability see Pfeffer, , “The Institution of Contracts in the Chinese People's Republic”, part I, pp. 161–162Google Scholar.

40 “Agriculture and Commerce Conclude ‘Five Fix’ Production and Marketing Contracts”, People's Daily, May 3, 1961; Ts'ui Li-chun, note 3 above.

41 “The Purchase Price is Not Sufficiently Logical…”; “Pay Attention to Contract Management”, Ta Kung Pao (Peking), 1957Google Scholar, in Union Research Institute files, 1957–58, 84, No. 32165.

42 It is suggested that the peasants must be “educated” every year about the solemn nature of contracts. “Purchase Work Can't Be Simplified.”

43 “Spread the Contract System and Do the Work of Supplying Production Materials Well”, Ta Kung Pao (Tientsin), 05 13, 1956Google Scholar; Wang-fu, Yen, “How to Realise (tui-hsien) the Purchase and Marketing Combined Contract”, Ta Kung Pao (Peking), 03 30, 1962Google Scholar; “Tai Yuan City Supply and Marketing Co-operative, After Investigation and Finding out the Causes for Problems that Existed in Executing Contracts, Fixed Improved Methods”, Ta Kung Pao (Tientsin), 06 10, 1953Google Scholar.

44 “Re-evaluate (ch'ing-li) Combined Production and Marketing Contracts for Live Pigs”, Chekiang Daily, July 15, 1955.

45 Jen Chien-hsin, note 3 above, pp. 32–33; Liu Ch'i-shan, note 6 above, p. 39. Many contracts, particularly in the early years of the First Five-Year Plan, were not performed seriously. Since then, performance appears to have improved, especially as to first-category goods, whose production and sale is carefully regulated. Statistics on performance generally are scattered and probably unreliable. They are suspiciously consistent in indicating for any given time that, though performance in the past has not been very good, recently performance has improved greatly. See, for example, Yen Wang-fu, note 43 above; and “In Purchasing Agricultural and Sideline Products…”, Ta Kung Pao, February 15, 1962.

46 Perkins, Dwight H., Marketing Control and Planning in Communist China (Cambridge: Harvard University Press, 1966), pp. 28–42 and 199Google Scholar.

47 With the commune movement in the last half of 1958 and the transfer of the basiclevel government commercial organs and SMCs to commune administration, the SMCs, whose scope already had been restricted by 1958, entered a period of enforced hibernation lasting until the first half of 1961. CNA, August 31, 1962, pp. 2–3. For a short period, until the end of 1958, it was thought that the communes should be self-sufficient and commerce reduced accordingly. See, “Decision…Regarding Improving the System of Rural Finance and Trade Administration…” op cit. Since parties to contracts concluded immediately after communisation were much larger units, commonly the commune and the county commercial department, the scope of the contract seems to have expanded in 1959. Whereas in 1957 there is evidence that it was believed the length of the contract period should depend in part on the nature of the product involved, just after communisation the emphasis generally appears to have shifted to year-long contracts. “The Ch'iao (?)-k'ou SMCs Spreading the Combined Contract is Not a Coincidental Matter”, Hsin Hunan Pao (New Hunan), May 15, 1957; “The Lung Chang Commercial Bureau and the Hu Chia Commune Conclude Purchase and Marketing Contracts; the State Plan is Bound to the Commune Plan”, Ta Kung Pao (Peking), 11 2, 1958Google Scholar. Similarly the contracts of late 1958 and 1959 incorporated the broad needs and produce of the diversified economy of entire communes. This change in the scope of contracts reflects the fact that with the abolition of private plots whatever was not included in plans or contracts would not be produced or sold. Since, practically speaking, the scope of centralised planning at best was limited to important products, combined contracts had to provide direction for products outside this scope. Li Ch'eng-shui, note 3 above.

48 Editorial and articles in Ta Kung Pao, April 4, 1959.

49 Heng, Yu (pen-name for Liu Yung-hua), “Commenting on the Chinese Communists' Rural Market Trade”, Motherland Weekly (Hong Kong), 11 2, 1959, p. 21Google Scholar

50 “The Cabinet Approves and Transmits the Report of the Ministry of Commerce emanding Level-by-level Convoking of Materials-Exchange Conferences”, New China Semi-Monthly, No. 7, 1959Google Scholar.

51 See, for example, Chin-min, Ts'ui, “Expand the Purchase and Marketing of Native Products, and Extend Contract Management”, Chin-pu Jih-pao (Advance Weekly) (Tientsin), 02 24, 1951Google Scholar; and “The Advantages and Understanding of Convoking Combined Conferences for Supply, Production, and Marketing”, Sinkiang Daily, August 27, 1955.

52 “The Cabinet Approves and Transmits…”, note 50 above.

53 These conferences are to be held twice a year, in the spring to make the contracts and organise production, and in the autumn to examine contract performance and, if necessary, to supplement and revise the contracts to make them more realistic. The conferences may deal with a specific type of product, like the National Native Waste Products Conference at which over 900 contracts and agreements valued at over U.S. $120,000,000 were signed. “Holding Materials-Exchange Conferences Strengthens the Planned Nature of Production and Circulation”, Ta Kung Pao editorial, March 23, 1959. Or they may deal with a wider range of products like the first National Conference for the Exchange of Third-Category Materials, at which over 22,000 contracts and agreements valued at almost U.S. $400,000,000 were signed. “The First Whole Country Materials-Exchange Conference for Third Category Materials”, People's Daily, March 23, 1959, as reprinted in New China Semi-monthly, No. 11, 1959, p. 127; “Bringing the Production and Marketing Activity of the Commune Production Brigade into State Plans, Various Places Widely Sign Production and Marketing Contracts”, People's Daily, April 13, 1959. See also Gene Hsiao, note 6 above, at pp. 1055–1056.

54 This emphasis is in line with the slogan “take the whole country as a chessboard”, a slogan spread in early 1959 as part of a campaign to combat localism that resulted from the extreme decentralisation of 1958.

55 CNA, No. 299, 11 30, 1959, p. 5Google Scholar. This issue is very useful generally regarding contracts, commerce, and institutional changes in 1959.

56 “The Directive of the Central Committee of the Chinese Communist Party and the Cabinet, Relating to Organising Rural Market Trade”, Ta Kung Pao (Peking), 09 25, 1959Google Scholar.

57 Ta-t'ung, Kuan, “My Country's Unified Socialist Domestic Market”, Hung Ch'i (Red Flag), No. 6, 1963, pp. 28–35, especially after p. 30Google Scholar.

58 Kuan Ta-t'ung, “Discuss Rural Market Trade”, People's Daily, November 21, 1959. For a highly refined view of rural markets see Skinner, G. William, “Marketing and Social Structure in Rural China”, The Journal of Asian Studies, XXIV, Nos. 1, 2 and 3, 09 1964, February 1965 and May 1965, pp. 3–43, 195–228 and 363–399CrossRefGoogle Scholar, respectively. See my discussion of the relation between Skinner's “standard market” and what I refer to as rural markets. At least in “standard markets” and for the most part in rural markets in general, contracts d o not seem to play a role in the market proper.

59 In the case of first- and second-category goods, the state apparently can pre-empt their sale in the rural market if necessary even though previously set state tasks have all been fulfilled. “Th e Directive of the Central Committee of the Chinese Communist Party and the Cabinet Relating to Organising Rural Market Trade”, op. cit.

60 A number of reasons have been postulated to explain the delay. Some relate to conditions at the centre; others to local conditions; still others involve conditions directly relevant to both. First, it seems likely there was a significant division of opinion among the central leadership regarding what should be done. This is reflected in the fact that most of the measures before 1961 to reorganise the economy were only “half measures.” Perkins, , Marketing Control and Planning, p. 93Google Scholar. It is also suggested by the apparent division of opinion within the top leadership in 1958 on the original question of communisation. Schurmann, , Ideology and Organisation, pp. 474–477, 483–484, and 490–492Google Scholar. It seems unlikely that the major policy shifts between 1956–58 could have occurred without the prior or subsequent formation of what Schurmann refers to as “opinion groups”, pp. 55–56. Second, the extreme decentralisation of controls, such as statistical controls, meant that central, and even provincial- and lower-level leadership lacked reliable information about conditions in many areas. Perkins, , Marketing Control and Planning, p. 90Google Scholar. Third, the decentralisation of all authority to rural Party cadres, previously radicalised by recent rectification campaigns and Utopian propaganda and localised by campaigns stressing self-sufficiency, undoubtedly meant that sustained efforts would have had to have been made by central authorities to carry out a reorganisation. The rural cadres, as Skinner, note 58 above, pp. 373–374, points out, had been convinced that commerce was inherently evil and bourgeois. Given this orientation, economic reorganisation of the sort required demanded either a reassertion of central controls or a fundamental change in the viewpoint and level of expertise of rural cadres. Neither alternative could be implemented very quickly. Finally, if one takes the marketing institutions as form, and the products with which they deal as content, form could not take on content until the harvests, which were the source of most of the products marketed, improved significantly.

61 Ta-t'ung, Kuan, “Discuss Rural Market Trade”; “To Guide the Communes to Carry Out Planned Production…”, Ta Kung Pao (Peking), 01 19, 1959Google Scholar; Yu Heng, note 49 above, p. 20; “Bringing the Production and Marketing Activity of the Commune Production Brigade into State Plans.” Scattered evidence indicates that in 1959 and 1960 in some areas contracts were being signed directly with production brigades instead of with the larger commune unit. It appears that by the end of 1960 the rule was that contracts were to be signed with the production unit directly concerned, either th e commune, the (large) brigade, or th e team (small brigade). “Several Problems in the Contract System after Communisation”; and “The Commercial Departments in Wan-hsien Special District Completely Carry Out the Contract System…”, Ta Kung Pao (Peking), 03 22, 1961Google Scholar. This shift may have predated somewhat the official reorganisation of the commune in the winter of 1960–61, under which successive retrenchment t o th e brigade and, later, to the team was carried out.

62 Anna Louise Strong's exceptionally interesting article in the June 17, 1964, issue of the Peking Review denies the commune unit has been abandoned in practice.

63 Yung-hua, Liu, “Communist Chinese Domestic Trade in 1961”, Motherland Weekly (Hong Kong), 04 30, 1962, pp. 12–17Google Scholar. At the various materials-exchange conferences tens of thousands of contracts and agreements, valued at hundreds of millions of dollars, were signed. Both within an d outside the materials-exchange conference system the basic-level SMCs were back in their role of directing production and sales through contracts. “In Purchasing Agricultural and Sideline Products…”, Ta Kung Pao, February 15, 1962; “The Purchase and Marketing Combined Contract is Good”, Ta Kung Pao, January 30, 1962.

64 In some areas, at least, the conferences were held level-by-level a s originally envisaged, thus facilitating organised exchange.

64 Hua, Lou (pen-name for Liu Yung-hua), “Chinese Communist Domestic Trade in 1963”, Motherland Weekly (Hong Kong), No. 2, 1964, pp. 14–18Google Scholar; “Widely Connecting, Actively Selling, Signing Contracts to Guide Production…”, Ta Kung Pao (Peking), 01 11, 1964Google Scholar.

66 G. William Skinner, note 58 above.

67 Ibid., p. 379.

68 Although I am not entirely clear about Skinner's terminology, I take it that the rural market (chi-shih) is equivalent to Skinner's generic “traditional periodic markets”(p. 379). Of the 42–45,000 such traditional periodic markets Skinner estimates as existing in China today (pp. 376 and 379), 32–34,000 are said to be standard markets in effect. The remainder, I presume, are unmodernised intermediate and central markets.

69 Ibid., p. 6.

70 “The funneling and supply functions of the intermediate market town and the bulking and wholesaling functions of the central market town and [today]…shared by a variety of agencies.…The local production of ‘first-category’ items… eventually reach the procurement stations which state companies maintain in the intermediate market towns, and are shipped on to their warehouses in central market towns and cities. Other local products of the ‘second category'… are, in the areas of their major production, likewise handled solely by ‘state commerce.’ First- and second-category items for local consumption are imported into a given trading system solely by the state trading companies, which distribute them through warehouses maintained in central market towns, and through wholesaling agencies of the supply and marketing co-operatives situated in both central and intermediate market towns. Retail outlets for controlled commodities of this kind…are either the [supply and marketing] co-operatives’ own stores in the market towns or petty traders selling on their behalf. Finally, in the case of… ‘third category’…goods…vertical distribution is effected in part through a special type of warehouse under state commerce which ‘acts as an intermediate link and accepts responsibility for storing, buying and selling of such commodities.… Their purpose is to channel goods from the villages to the cities.’ Vertical distribution of third-category items is also accomplished through the flourishing institution now known as the [materials-exchange conference].” Ibid., p. 380.

71 Ibid., pp. 380–381.

72 Lou Hua, note 65 above.

73 Quigley, John B. Jr., “Recent Comment on the Contract of Delivery by Soviet Writers”, Spring 1966Google Scholar, unpublished paper at the Harvard Law School; and Dietrich A. Loeber, op. cit.

74 Quigley, pp. 2–3; but see Loeber, p. 173.

75 Quigley, p. 7. The nariad is one kind of planning act, specifically a delivery order issued by an agency administratively superior to the recipient enterprise.

76 Loeber, pp. 146–148, and 155–159.

77 Quigley, p. 18.

78 Ibid., pp. 2, 14–15, and 20.

79 Schurmann, , Ideology and Organisation, p. 178Google Scholar.

80 Ibid., pp. 175–176.

81 Ibid., pp. 219 and 297; and see Schurmann, Franz, “China's ‘New Economic Policy'—Transition or Beginning”, The China Quarterly, No. 17 (01–03 1964), pp. 65–91CrossRefGoogle Scholar.

82 Schurmann, , Ideology and Organization, p. 219Google Scholar.

83 Schumann, , “China's New Economic Policy”, pp. 76–80Google Scholar.

84 Schurmann. postulates that China may have been going through an N. E. P. from 1961 to at least early 1963. Ibid., pp. 80–83.

85 Ibid., p. 77.

86 The tolkach or “pusher” is a “supply expediter…sent out by a firm to ‘push’ for its interests.” Berliner, Joseph S., “The Informal Organization of the Soviet Firm”, The Quarterly Journal of Economics, 66, 08 1952, pp. 342–365 at p. 358CrossRefGoogle Scholar.

87 If the materials-exchange conference system and analogous institutions in the industrial realm are primarily facilities for implementing decentralisation I, such face-to-face confrontation by production, distribution and user units would reduce greatly the need for advertising as a precondition for widespread direct contracting.

88 Schumann, , Ideology and Organization, p. 73Google Scholar.

89 For another, but not dissimilar, approach to the more general problem of “commandism” and consensus, see Lewis, John Wilson, Leadership in Communist China (Ithaca: Cornell University Press, 1963Google Scholar).