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The Reinstatement of Economics in China Today

Published online by Cambridge University Press:  17 February 2009

Cyril Chihren Lin
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Extract

The singular importance attached to the pedagogical functions of economics in socialist countries where the ruling Marxian ideology seeks to correlate each and every aspect of society's “superstructure” with the peculiarities of its “economic base” leads curiously, but logically, to a periodic negation and thrashing of economics itself.

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Research Article
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The China Quarterly , Volume 85 , March 1981 , pp. 1 - 48
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Copyright © The China Quarterly 1981

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References

* Although portions of this paper are based on my doctoral dissertation (Oxford, 1981), part of the research of which was undertaken at the School of Oriental and African Studies, Contemporary China Institute, where I was a research fellow for two years (1978–80), I have received invaluable assistance in filling the gaps in information and in gaining a better (but by no means adequate) overall understanding of the subject from discussions with Sun Yefang, Xu Dixin, Dong Fureng, Liu Guoguang (all at the Economics. Research Institute, Chinese Academy of Social Sciences, Beijing), Wang Yongzhi (Faculty of Economics, Beijing University), and other economists and planners at Fudan and Nanjing universities and planning offices of various state industrial enterprises. To these people, I wish to express my gratitude. I would also like to thank Wlodimierz Brus and Kenneth Walker for their very helpful comments on an earlier draft of this paper. The usual caveat absolving the above people and institutions from any errors or views expressed in this paper applies.

1. Holubnychy, V., “Soviet debates on economic theories,” in Shaffer, H. G. (ed.), The Soviet Economy (London: Methuen and Co., 1964), p. 344.Google Scholar See also W. Leontief, “The decline and rise of Soviet economic science,” in Ibid. pp. 367–77.

2. The Pod Znamenen Marxizma (PZM) article was already an attempt to reinstate the Law of Value in Soviet economics but the process was pre–empted by the war with Germany and continued only post–Second World War with Stalin's Economic Problems of Socialism in the U.S.S.R. The PZM article has been translated by R. Dunayeskaya, in American Economic Review, September 1944, pp. 501–530. See also the subsequent discussion concerning it by P. Baran, B. Otis and O. Lange in the December 1944 (pp. 862–71 and March 1945 (pp. 127–37) issues of the same journal.

3. For example, as we shall see later in the article, Chinese profit reform proposals in 1956 by Sun Yefang predated roughly but not directly similar Soviet proposals in 1962 by Liberman.

4. A pronouncement by Strumilin, cited in Shapiro, L., The Communist Party of the Soviet Union (New York: Random House, 1959), p. 264.Google Scholar

5. “Laws” referring to regularities in economic processes (e.g. Law of Supply and Demand) and not in the legal sense.

6. See the speeches given by Chen Yun (pp. 157–76), Li Fuchun (pp. 288–303) and Bo Yibo (pp. 45–62) at the Party's Eighth National Congress (1956) in Eighth National Congress of the Communist Party of China, Vol. II Speeches (Peking: Foreign Language Press, 1956)Google Scholar and the reports by Liu Shaoqi and Zhou Enlai at the same congress, in Bowie, R. and Fairbank, J. K. (eds.), Communist China 1955–59 (Cambridge: Harvard University Press, 1962), pp. 164–203 and pp. 217–42.Google Scholar

7. Many Chinese economists I spoke with all emphasized the importance of this speech, both for its contents and its role in “legitimizing” a re–examination of traditional Soviet–Stalinist economics. See the Selected Works of Mao Tsetung Vol. V (Peking: Foreign Language Press, 1977), pp. 284–307.Google Scholar

8. See the April, June, October and December 1955 issues of Jingji yanjiu. Renmin ribao and Guangming ribao of roughly the same period also carried articles on this question.

9. Lin Lifu, “On the basic economic laws determining our country's various social forms of production during the transitional period,” Jingji yanjiu, April 1955. See also the following articles attacking Lin in Jingji yanjiu: Zheng Bijian, “Concerning errors in Lin Lifu's article,” December 1955, pp. 31–35; Editorial Office, “Expose the rightist Lin Lifu,” Wu Hua, “Repudiating Lin Lifu's anti–Party fallacies distorting the nature of state capitalism in our country,” Zuo Li, “Repudiating Lin Lifu's reactionary opinions on questions of the socialist transformation of agriculture,” all in April 1958.

10. See the 14 articles criticizing Chen in Jingji yanjiu, October 1957, and the article by Chen Chenhan et al. defending their views in the same issue.

11. Zhang Youren, “The political conspiracies of rightist Chen Chenhan,” Jingji yanjiu, October 1957, pp. 27–35.

12. Yinchu, Ma, My Economic Theory, Philosophical Thought and Political Standpoint (Beijing: Caizheng zhubanshe, 1958).Google Scholar

13. Ibid. pp. 144–53.

14. Articles attacking Lin Lifu and Chen Chenhan are given supra, fns. 9, 10 and 11. For articles criticizing Ma Yinchu, see the collection of articles in the November 1958 and January 1960 issues of Jingji yanjiu; Ma Qigong and Zhong Qifu, “Discussing again the theory of comprehensive balance with Mr Ma Yinchu” in Jihua jingji, No. 4 (1958) pp. 37–41; Wang Yanan, “Discussing again Ma Yinchu's new philosophy and economics,” in Xin Jianshe, February 1960, pp. 6–16; and Wu Daguan, “Critique of a new Malthusian theory,” in Xin Jianshe, May 1960, pp. 14–19.Google Scholar

15. Ding Gu, “Is the ‘multiplier theory’ purely a mathematical concept?”, in Jingji yanjiu, October 1957, pp. 109–111; Fan Hong, “A brief comment on Keynesian theories of investment, consumption and the multiplier,” and Liu Tianyi, “A critique of Keynesian economics,” both in Jingji yanjiu, December 1957, pp. 60–62.

16. This was the essence of the Chinese evaluation of a “lifeless, over–rigid” economy resulting from over–centralization. See Li Fuchun's speech at the Party's Eighth National Congress, pp. 296–303 in particular; and Xue Muqiao, “A preliminary view of the current planning and management system,” in Jihua jingji, September 1957, pp. 20–24.

17. The traditional argument in the East European and Soviet planning literature is that as labour reserves in an economy are exhausted (i.e. “extensive growth” ends) and an “intensive growth” phase (i.e. capital–intensive growth) is entered into, then problems of economic efficiency and rational resource use assume urgency and hence the need for “parametric planning” relying on value indices. I have argued, however, in my doctoral dissertation that these kinds of planning reforms in China were also crucial because, first, constraints of high social overhead capital associated with urbanization, the limits of extracting the agricultural surplus (for ideological and technical factors) to underwrite a significant increase in the industrial labour force, and a policy of minimizing the industrial wage bill so as to maximize accumulation all meant that industrial growth had to be very capital intensive; and second, industrial growth was in fact characterized by high incremental capital–output ratios.

18. See supra, fn. 17.

19. See the various State Council directives on decentralization in Faguei huibian, Vol. 6, pp. 355–57; Vol. 7, pp. 315–18, pp. 331–32 and pp. 391–97; Vol. 8, pp. 102–103; and She Yisan, “Discussing the reform of materials allocation system,” in Jihua jingji, October 1958, pp. 34–36; Chen Dalun, “The reform of our country's management system,” Jingji yanjiu, March 1958, pp. 29–38. The analysis of the 1957–58 decentralization as a “superficial reform” which did not really alter the basic Stalinist model is my own (based on my dissertation) and is not the official view at present.

20. Yefang, Sun, “Beginning a discussion on the Gross Output Value,” in Tongji Gongzuo, No. 13 (1957), pp. 8–14.Google Scholar

21. For other types of efficiency indicators proposed, see Yiqian, Yu, “Can profit be used instead of ‘Output Value?’” in Tongji Gongzuo, No. 5 (1957), p. 16;Google Scholar and Ruoyi, Fan, “A brief discussion of the capital–profit rate and the construction guidelines of more, faster, better and more economically,” in Jihua jingji, No. 8 (1958), pp. 21–23.Google Scholar

22. This analogy to an ox was never explicit in Sun's published writings but was referred to in an attack on him (see fn. 92). This analogy was supposedly contained in an internal (unpublished) investigation report by Sun Yefang on Shanghai's textile industries in the early 1960s.

23. Sun Yefang, “Place planning and statistics on the basis of the Law of Value,” in Jingji yanjiu, December 1956, pp. 30–38.

24. Sun Yefang, “On value,” in Jingji yanjiu, September 1959, pp. 42–46. Many of Sun's articles concerning the Law of Value, production prices, reforming an enterprise's fixed and working capital management system, capital–profit rates, and distinction between these concepts and revisionism written at that and later periods were censored, but they have since been published in a book by him entitled Some Theoretical Problems of Socialist Economy (Beijing: Renmin zhubanshe, 1979).Google Scholar

25. Ibid. “On value,” p. 59.

26. This thesis is not contained in any single article but is implicit in the corpus of his writings; see his book, in particular the articles written between 1959 and 1964. The thesis will apparently be made clear in a forthcoming book by Sun. The same thesis was independently stated much more explicitly by W. Brus: see, for example, Brus, W. and Laski, K. “The Law of Value and the problem of allocation in socialism,” in On Political Economy and Econometrics, Essays in Honour of Oskar Lange (Warsaw: Polish Scientific Publishers, 1969), pp. 45–59.Google Scholar

27. This periodization of debates was based on my discussions with various Chinese economists and is also roughly based on, but not exactly similar to, the periodization given by Sun Shanqing, Chen Jiyua and Zhang Zhuoyuan, “An appraisal of discussions on problems of socialist commodities and value in our country in the past thirty years,” in Jingji yanjiu, October 1979, pp. 10–19.

28. Xue Muqiao, “Planned economy and the Law of Value,” in Renmin ribao, 28 October 1956.

29. Wang Yanan, “Bring into full play the positive functions of the Law of Value in our country's socialist economy,” in Renmin ribao, 15 May 1959.

30. Gu Zhun, “A preliminary discussion on commodity production and the Law of Value under the socialist system,” in Jingji yanjiu, March 1957, pp. 21–51; “Commodities under the socialist system”in Xuexi, April 1957; and Ying Chengwang, “A preliminary discussion on the special characteristics and requirements of the socialist law of planned and proportionate development” in Xin jianshe, October 1957, pp. 53–57. Gu Zhun was condemned three months after the publication of his article as a “revisionist.” See Zhang Chunyin et al., “Repudiating Gu Zhun's revisionist views on the Law of Value,” in Jingji yanjiu, December, 1957, pp.29–35.See also Zhang Gueifung, “Concerning the role of the Law of Planned and Proportionate Development and the Law of Value in a socialist economy, criticizing Ying Chengwang's errors,” in Xin jianshe, December 1957, pp. 36–43.

31. Luo Gengmo wrote a large number of articles on these questions, but the best summary may be found in his book, Problems of Commodities and the Law of Value under the Socialist System (Beijing: Koxue zhubanshe, 1957).Google Scholar

32. Or what he termed “dajihua, xiaoziyou” (Big plans, minor freedoms) Ibid. p. 172.

33. Cited in V. Holubuchy, “Soviet debates,” p. 344.

34. Sun Shanqing et al., “An appraisal of discussions,” p. 12.

35. Quoted in Ibid. p. 12. See also Sun Yefang's references to Mao's pronouncements on the “Law of Value is a great school,” in his book, Some Theoretical Problems, pp. 301—305.

36. See Shu Shanqing et al., “An appraisal of discussions,” pp. 12–13. See also the collection of articles in Special Edition on Problems of the Law of Value in a Socialist Economy (Beijing: Jingji yanjiu Editorial Department, June 1979).Google Scholar

37. Analysis given in my dissertation and based on discussions with Chinese economists. For an example of the call to recentralize, see Fan Yezhun, et al., “Centralization and unification in financial work,” in Dagong bao, 25 June 1962, p. 3. Zhu Fulin and Xiang Huaizhen, “General views on the reform of the financial system,” in Jingji guanli, May 1979, pp. 16–19.

38. Analyses given in my dissertation based on a literature survey of the period and discussions with the Chinese economist Wang Yongzhi, Beijing University.

40. Fang Wen, “Social forms of production is the object of Marxist–Leninist political economy,” in Jingji yanjiu, July 1961; and Yao Ming, “Problems of the object of socialist construction industrial economics,” in Jingji yanjiu, June 1961.

41. Tien Guang, “The substance of political economy within the historical context of Marxist–Leninist political economy,” in Jingji yanjiu, April 1961; Liu Shibai, “Discussing the objective of Marxist–Leninist political economy,” in Jingji yanjiu, October 1961; Wang Yanan, “Problems on utilizing the system of Capital to research on the socialism portion of political economy,” Jingji yanjiu, May 1961; and “The method of Capital,” in Jingji yanjiu, December 1962.

42. Sun Yefang, “Certain debates on questions of what is productive forces and their definition,” in Jingji yanjiu, January 1980, pp. 28–37.

43. Cited in Sun Yefang, Ibid. p. 36. Ping Xin's articles may be found in Xueshu yuekan, issues June and September 1959, July 1960 (pp. 35–40) and in Xin jianshe, July 1959. Examples of critiques of Ping Xin at that time, and not referred to by Sun, are Xu Diping, “The object of political economy,” in Guangming ribao, 17 October 1960, p. 3; and Zi Wen, “Ping Xin's theory of automatic multiplication of productive forces,’” in Jingji yanjiu, November 1960.

44. Mao Zedong sixiang wansui, 1967 and 1969 editions.

45. Ibid. 1967 edit., p. 161.

46. In Chinese, the term used is Xiaoguo, literally, result or effect. As this concept was taken from Soviet and East European discussions, which is translated as “effectiveness” in English, I am doing likewise and I believe this more accurately conveys the true meaning of the concept than translations such as result or effect.

47. “On the question of economic effectiveness in the socialist system,” Wenhui bao, 6 September 1962; “Discussion on the question of economic effectiveness under the socialist system: an overview,” Guangming ribao, 14 February 1962; Jin Li, “Discussion on problems of socialist economic effectiveness among our country's economists in recent years,” in Jingji yanjiu, January 1963 (pp. 60–63). Shu Shanqing, “Several problems on socialist economic effectiveness,” in Dagong bao, 26 February 1962; Ho Jianzhang, Guei Shihyong and Zhuo Xiaomin, “On the questions of the substance of economic accounting systems of socialist enterprises,” in Jingji yanjiu, April 1962, pp. 1–10.

48. Yue Jinhui, “Concerning some problems of the evaluation of economic effectiveness in socialist industrial construction,” in Guangming ribao, 27 August 1962; Zhou Zongyi, “Economic effectiveness in the socialist system and its principal indicators,” Xueshu yuekan, September 1962.

49. Huang Liangwen, “Several problems in the economic effectiveness of planned investment,” Guangming ribao, 22 January 1962; and “The problems of the social nature of socialist economic effectiveness,” in Jingji yanjiu, April 1964, pp. 25–34.

50. Political Economy Section, Economic Research Institute, Chinese Academy of Science, A Selection of Articles on Problems of Commodity, Value and Price under the Socialist System as Discussed Amongst Our Country's Economists (Beijing: Koxue zhubanshe, 1958).Google Scholar

51. See for example,Muqiao, Xue, Xing, Su, Zili, Lin, The Socialist Transformation of the National Economy in China (Beijing: Foreign Language Press, 1960);Google ScholarDatong, Guan, The Socialist Transformation of Capitalist Industry and Commerce in China (Beijing: Foreign Language Press, 1960);Google Scholar and Perkins, D., Market Control and Planning in Communist China (Cambridge: Harvard University Press, 1968).Google Scholar

52. For a comprehensive treatment of prices in Socialist economies, see Csikos–Nagy, B., Socialist Price Theory and Price Policy (Budapest: Akademiai Kiado, 1975). See also Fan Ruoyi, “A brief discussion of price policy and the Law of Value,” in Jingji yanjiu, May 1958, pp. 45–49. The discussion in this section is based on my dissertation.Google Scholar

53. Where M and V stands for the total surplus value product and the total wage fund in the national economy respectively. See Wang Zhiye, “A preliminary investigation into value measurement problems under socialism,” in Jingji yanjiu, November 1962, pp. 24–32; and Bai Hong, “Further discussions concerning problems of the basis of price formation under socialist system,” in Jingji yanjiu, June 1964 pp. 6–15. For a brief Western summary of Chinese pricing discussions, see Chen, N. R., “The theory of price formation in Communist China,” in The China Quarterly, No. 27 (July–September, 1966), pp.35–53.Google Scholar

54. Yang Hungdao, “Some problems on the role of profit in price formation,” in Jingji yanjiu, August 1963, pp. 43–49, 66; and Yu Lin, “How to determine correctly prices of various products,” in Jingji yanjiu, May 1964, pp. 1–11.

55. Where C stands for total cost of raw materials and other material inputs in the national economy. See Zhang Wen and Zhao Liguang, “An analysis of factors determining commodity price under socialism,” in Xin jianshe, December 1963, pp. 28–35.

56. See supra, fn. 53.

57. Where K stands for the average total capital invested in the production of each unit of the product in question, and r is the ratio of M (as defined before) to K (total capital invested in the economy). The major articles advocating this formula are: Ho Jianzhang and Zhang Ling “A preliminary discussion of production prices in a socialist economy,”in Jingji yanjiu, May 1964, pp. 12–20; Zuo Yuan, “A preliminary discussion of the relationship between the rate of labour productivity, value and price formations,” in Jingji yanjiu, January 1964, pp. 44–55; and Yang Jianbai, “The balance of the national economy and production prices,” in Jingji yanjiu, December 1963, pp. 40–56; Min Xuan, “Discussing the basis of prices under conditions of socialism,” Guangming ribao, 21 July 1964, p. 4.

58. Yang Jianbai, “The balance of the national economy,” pp. 47–49.

59. Ho Gueilin, Xie Zhongzhang and Peng Zhennuan, “Production prices cannot become the basis of socialist price formation,” in Jingji yanjiu, April 1964, pp. 1–14; Bai Hong “Further discussions”; Dai Yuanshen, “A critique of the production prices and the average capital–funds profit rate theory,” Jingji yanjiu, September 1964, pp. 1–11; Yun Shihliang, “Production prices do not exist in a socialist economy,” Jingji yanjiu, November 1964, pp. 1–9; Chen Zhiyuan, Zhou Shulian and Wu Qinglian,” The objective of socialist production can never be confused,” Jingji yanjiu, December 1964, pp. 1–12; Ho Gueilin, “The nature of the theory of production prices under socialism,” Jingji yanjiu, January 1965, pp. 20–25; Guan Li, “On the reasons for the foundation of production prices,” in Guangming ribao, 13 April 1964, p. 4; and “Production prices and socially necessary labour expenditure,” in Guangming ribao, 18 May 1964, p. 4.

60. See Spulber, N. (ed.), Foundations for Soviet Strategy for Growth (Bloomington: Indiana University Press, 1964),Google Scholar and Erlich, A., “Stalin's views on economic development,” in Simmons, E. (ed.), Continuity and Change in Russian and Soviet Thought (Cambridge: Harvard University Press, 1955), pp. 81–99.Google Scholar

61. “The problem now facing us is that of continuing to adjust properly the ratio between investment in heavy industry on the one hand and in agriculture and light industry on the other, in order to bring about a greater development of the latter. Does this mean that heavy industry is no longer primary? No. It still is, it still claims the emphasis in our investment,” Selected Works of Mao Tsetung, Vol. V, pp. 285–86.

62. Ding Xiaoguei, “Using Marx's expanded reproduction formula to study the principle of the priority of producer goods,” in Jingji yanjiu, August 1956, pp. 23–40. See also an attempt at simplifying Ding's complicated mathematics by Zhang Huaxia, “A view on the article ‘ Using Marx's expanded reproduction formula to study the principle of the: priority of producer goods,’” in Jingji yangjiu, February 1957, pp. 71–79.

63. Editorial, “Away with the old balance, on to a new balance,” in Renmin ribao, 28 February 1958, p. 1.

64. Liu Gugang, “Spiralling to socialism,” in Dagong bao, 2 June 1961, p. 1.

65. “Balance is nothing but a temporary, relative unity of opposites. At the end of each year, the overall balance is disturbed by the struggle of opposites; the unity is transformed and balance becomes imbalance, unity becomes disunity, and once again it becomes necessary to formulate a balance and unity for next year,” Zedong, Mao, Selected Readings (Beijing: Foreign Language Press, 1971), p. 446. Also, “Wave–like advances; any movement comprises waves: in natural sciences there are sound waves and electromagnetic waves. The law of development of motion is that all movements are in the form of waves; this is an objective feature and does not change according to human will,” Mao Zedong sixiang wansui, 1967 edit., p. 51.Google Scholar

66. Mao Zedong sixiang wansui, 1967 edit., pp. 149–50.

67. Xu Dixin, Yao Sen, Fang Liubi, “Respect objective economic law –study comrade Zhou Enlai's thinking on socialist economic construction,” in Jingji Yanjiu, May 1980, pp. 3–13.

68. Figures from unpublished manuscript by Dong Fureng, 1980.

69. Dong Yuanshi, “An investigation into the sources of simple and expanded reproduction,” in Jingji yanjiu, December 1962, pp. 36–43.

70. Wei Xinghua, “How an increase in the variation of ‘capital advanced’ from ‘capital expended’ affects the accumulation rate,” in Guangming ribao, 22 January 1962, p. 4.

71. Wu Shuqing, “The Marxist theory of the two major categories of social production and its application in socialist reproduction,” in Guangming ribao, 8 January 1962, p. 4; and “On the mutual relationship between simple and expanded reproduction,” in Guangming ribao, 18 December 1961, p. 4.

72. Sung Zexing, “A discussion of formulae of expanded reproduction,” in Guangming ribao, 25 December 1961, p. 4; and “Several problems on the quantitative relationship between the two major categories of social production,” in Jingji yanjiu, August 1962, pp. 1–14; Shih Xue, “Preliminary studies of formulae for expanded reproduction,” in Guangming ribao, 4 December 1961, p. 4.

73. To emphasize the limiting condition of consumer goods output on producer goods output in expanded reproduction, the following supplementary (to the basic I(v + m) > IIc formula) equation were proposed:

Shih Xue: II(c + m)>

Sung Zexing: to determine extent of inequality, need

Where I = producer goods sector; II = consumer goods sector;

c = constant capital; v = variable capital; m = surplus

= portion of surplus consumed by capitalists, or surplus needed to underwrite increased consumption because of expanded reproduction under socialism

Im + IIm

= individual consumption of workers (and their dependants) in nonproductive (i.e. service) sectors

= portion of surplus used as accumulation (state's productive investment)

74. Liu Guoguang, “A preliminary discussion on the quantitative relationship between the rate and proportions of socialist reproduction “in Jingji yanjiu, November 1962, pp. 16–31.

In other words, rate of growth of national income is

75. The capital accumulation potential

76. In reality, ; see Liu Guogang, “A preliminary discussion,” pp. 19–20.

77. If it is assumed that accumulation (ΔV) occurs in the consumer goods sector as well (Category II), then would just be .

See Ibid. pp. 20–26.

78. See the two tables in Ibid. pp. 28–29. Over a 12–year period rate of growth would decline from 10 per cent to 5 per cent if a = 0, grow to 21·5 per cent if a = 0·5, and 41·5 per cent if a = 0·9; the corresponding level of average consumption would increase from a base of 200 (absolute value) to 426 (a = 0); to 561 (a = 0·5), and to 471 (a = 0·9).

79. Dong Fureng, “Questions on studying the practical applications of Marx's reproduction formulae from the angle of unifying the production and use of social products,” in Jingji yanjiu, March 1963, pp. 39–51.

80. These six sectors were derived by differentiating the two major sectors (category I of producer goods, and category II of consumer goods) into three sub–sectors each (production of outputs to be used within the sector, supplied to the other sector, and used for accumulation). The accumulation sub–sectors can be sub–divided into those intended for internal and external use, yielding an eight–sector model.

81. Dong Fureng, “Questions on studying,” pp. 39–43.

82. Dong Fureng, Ibid., and “Proportionality in socialist reproduction under various types of expanded reproduction,” in Jingji yangjiu, November 1963, pp. 37–50; and “The allocation and use of products in the proportional relationships between the two major categories of production,” in Jingji yanjiu, August 1964, pp. 52–64.

83. See supra, fn. 59.

84. See Dittmer, L., Liu Shao–ch'i and the Chinese Cultural Revolution (Berkeley: University of California Press, 1974), especially pp. 214–93;Google ScholarWang, Ding (ed.), Compendium of Materials on the Chinese Communist Cultural Revolution, 3 Vols. (Hong Kong: Ming Bao Yuekanshe, 1967);Google ScholarUnion Research Institute, CCP Documents of the Great Proletarian Cultural Revolution 1966–67 (Hong Kong: Union Research Institute 1968).Google Scholar

85. Private communication to author.

86. Guei, Meng and Lin, Xiao, “On Sun Yefang's reactionary political stance and economic programme,” in Hongqi, No. 10 (1966).Google Scholar

87. Unpublished lectures notes on the Chinese Development Strategy, Oxford University.

88. “Under the condition of a socialist system having been established in our country, the essence of this contradiction is a contradiction between the advanced socialist system and the backward social productive forces.” See the Resolution on the political report of the CCP Central Committee to the Eighth National Congress of the Party, in Union Research Institute, Documents of the Chinese Communist Party Central Committee, September 1956–April 1969, Vol. I (Hong Kong: Union Press Ltd., 1971), p. 32.Google Scholar

89. Zhou Shulien and Wu Qinglien, “The feudalistic character of the gang of four's economic thought,” in Lishi yanjiu, July 1958, pp. 28–43.

90. Editorial, Renmin ribao, 1 January 1971, p. 1.

91. Hongqi, No. 9 (September 1970), pp. 26–33, and No. 2 (February 1971), pp. 39–47. See also Writing Group of the Heilongjiang Provincial Revolutionary Committee, “Develop local industries with greater, faster, better and more economical results,” in Hongqi, No. 6 (May 1970), pp. 82–88.

92. Criticizing Sun Yefang and “Struggling, Criticizing and Transforming” the Economic Line (Guangdong: Renmin zhubanshe, 1970).Google Scholar

93. Portions of an unofficial text of the “30 articles” are in “Draft decisions concerning some problems in accelerating the development of industry,” transl. in Issues and Studies (Taipei) December 1978 and January 1979 issues. The reference to “30 items” in this text differs from official Chinese reference to the same draft as “20 articles.” For example, see Criticism Group of the State Planning Commission, “An ugly counterrevolutionary drama of usurping the power of the party” in Renmin ribao, 16 July, 1977, pp. 1–3.

94. Yu Qiuli, “The conditions for the development of the national economy,” in Renmin ribao, 24 October 1977, p. 1.

95. Xue Muqiao, “The two–line struggle in the economic field during the transition period,” (in three parts), Beijing Review, Nos. 49, 50, 51 (2, 9 and 16 December 1977), pp. 4–8; 12–15; 9–15 respectively.

96. Hu Qiaomu, “Observe objective economic laws, accelerate the realization of the Four Modernizations,” in Renmin ribao, 6 October 1978, pp. 1–3.

97. These two agricultural policy documents were: “Decisions on accelerating agricultural development,” (transl. in BBC Summary of World Broadcasts, FE/6241/C1, 10 October 1979) and “(Draft) regulations on rural people's commune work,” (the “60 articles”), translated in Issues and Studies (Taipei), August 1979, pp. 100–112, and September 1979, pp. 104–115.

98. Yefang, Sun, “Discussing the necessity of reforming the ‘ antique reproductions, frozen technological progress’ management of equipment system,” in Hongqi, No. 6 (June 1979), pp. 24–31.Google Scholar

99. The term “ideological clearance” was coined by W. Brus; see W. Brus and C. Lin, Problems of the Incipient Reform of the Economic System in the People's Republic of China (forthcoming).

100. The chronological order of these discussion, and their contents, is based on a comprehensive review of popular press and specialized economic journals (primarily Jingji yanjiu. Jingji guanli, Shijie jingji and other social science journals from 1978 onwards.

101. On 27 May 1980, Renmin ribao's editorial “Firmly grasp readjustment as a crucial factor” said: “There is at present the view that the root cause of imbalance in our economy has been the present system of economic management, and we shall not be able to carry out smoothly the readjustment unless the system undergoes thorough reforms. In our opinion, such a view is incomplete.” (Emphasis added), p. 1. In June and July, the same paper published a series of editorials calling for prudence and caution in economic plans (actually using the phrase “haste makes waste”); see in particular those of 12 June, 16 June, 26 June and 17 July (Commentary entitled “Economic work should be practical and realistic”), 1980. Yet on 2 September 1980, the State Council approved and transmitted a report giving approval for all state enterprises to try out the self–management reforms (NCNA broadcast), in BBCSWBFE/6519/BII/3, 10 September 1980.

102. Parts of Zhao Ziyang's report were revealed in Renmin ribao, 21 April 1980, p. 1 The State Economic Commission announced that by the end of June 1980, 6,600 enterprises have been participating in the “self–management” experiments; representing 16 per cent of total state enterprises and accounting for 60 per cent of total industrial (state sector) output value. See “More enterprises with greater power of self–management,” in Beijing Review, 18 August 1980 (No. 33), p. 3.Google Scholar

103. For a discussion of the Shanghai experiment with shadow prices, see Financial Department, Shanghai Cotton Textile Industrial Company, “Using the ‘internal price calculation system’ to evaluate the efficiency of enterprise management,” in Jingji guanli, July 1980, pp. 24–28.

104. According to the Chinese Construction Bank, self–raised (extra–budgetary) funds for capital construction in 17 provinces and municipalities had far exceeded state annual control figures; in 7 provinces and municipalities, the excess was from 30 per cent to 100 per cent. While the state had sought to reduce capital construction by 47·8 per cent, in fact these self–raised funds increased capital construction throughout the country by 70 per cent from January to April (1980) compared with the same period in 1979 (NCNA radio broadcast) in BBC SWB FE/W1104/A/4, 15 October 1980. In Sichuan, the pioneer in enterprise reforms, in the first half of 1980, extra–budgetary funds accounted for 55 per cent of total capital construction investment in the province. Planned (State budgetary) capital construction was 1,300 million yuan, but the actual figure reached 2,900 million yuan, an excess of 123 per cent (NCNA broadcast) in BBC SWB FE/6594/C/1, 6 December 1980.

105. Sun Yefang, “On making production relations the object of political economic studies,” in Jingji yanjiu, August 1979, pp. 3–13. See also the subsequent discussion on Sun's views by Zhou Shulian, Wu Jinglian and Ma Shufang, “Discussions on the production relations as the object of political economy,” in Jingji yanjiu, December 1979, pp. 67–71.