Between 1964 and 1971 China carried out a massive programme of investment in the remote regions of south-western and western China. This development programme – called “the Third Front” – envisaged the creation of a huge self-sufficient industrial base area to serve as a strategic reserve in the event of China being drawn into war. Reflecting its primarily military orientation, the programme was considered top secret for many years; recent Chinese articles have discussed the huge costs and legacy of problems associated with the programme, but these discussions have been oblique and anecdotal, and no systematic appraisal has ever been published.2 Since Chinese analysts have avoided discussion of the Third Front, western accounts of China's development have also given it inadequate emphasis, and it has not been incorporated into our understanding of China during the 1960s and 1970s. It is common to assume that the “Cultural Revolution decade” was dominated by domestic political conflict, and characterized by an economic system made dysfunctional by excessive politicization, fragmented control, and an emphasis on small-scale locally self-sufficient development. The Third Front, however, was a purposive, large-scale, centrally-directed programme of development carried out in response to a perceived external threat with the broad support of China's national leaders. Moreover, this programme was immensely costly, having a negative impact on China's economic development that was certainly more far-reaching than the disruption of the Cultural Revolution.

The state of housing has a direct impact on a country's level of public health and an indirect effect on labour productivity through the general morale of the workers. Practically all the developing countries face serious housing problems, particularly in the urban areas. China, a developing country that upholds socialist economic principles, is no exception in this regard. One of the purposes of this article is to demonstrate that China shares with many developing countries the same intractable problems – namely, a shortage of housing supply and housing inequality in the urban sector. But having said that China's urban housing problem is brought about by policy directives and institutional arrangements that differ entirely from those in capitalist economies.

We have found that along the banks of the Hu, Chinese and foreign residents mix together in great numbers. Their style of life has traditionally been frivolous and flashy. There is mutual competition for profit, owing to the convenience of communications and the crass materialism. Since this is a centre where Chinese merchants are gathered together, it is a carefree place, where gentlemen and ladies take their pleasure. If one is of the upper classes, then luxurious desires are fully realized and there are many instances of behaviour overstepping proper boundaries. If one is a worthless fellow, then when he sees something different and thinks of moving ahead, he has a disproportionate expectation. He might well wait until the seas are drained and the mountains are worn down and yet still lack the craft to carry out [his plans]. Nonetheless he walks straight into danger without hesitation and willingly engages in illegal behaviour. Furthermore, Communists take advantage of the situation and think of intimidating robbers, kidnappers and bandits to wait in secret for an opportunity to behave outrageously.

In 1920 Wang Guangqi(1892–1936), a founder member of the Young China Association (Shaonian Zhongguo Xuehui) in 1918, wrote that in the past few years a clear division had arisen among Chinese overseas students. Those studying in the United States, having been influenced by the philosophy of “worshipping money” (baijin zhuyi) wanted to build a “capitalist” China on the American model when they returned. The work-study students in France, however, were concerned with practical training and participation in the labouring world. While Chinese students in the United States received regular government scholarships and enjoyed material comforts, Wang continued, those in France spent their time “sweating and working in factories.” Since the former sought their models in the “oil barons” while the latter looked to the workers for inspiration, Wang concluded, it was inevitable that whereas students returning from the United States would be capitalists, work—study students returning from France would promote “labour-ism” (laodong zhuyi) and become part of the labouring classes.

In July and August 1987 I spent several weeks in Beijing engaged in lengthy discussions with scholars and officials whose work concerns Tibet.

The most prominent of these people were Wang Furen, chairman of the Department of Ethnology at the Central Institute of Nationalities (CIN); Wang Xiaoyi, associate research fellow at CIN; Huang Hao, associate research fellow at the Institute of Nationalities of the Chinese Academy of Social Sciences (CASS); Liu Shengqi, research fellow at the Institute of Nationalities of CASS; Yao Zhaolin, chief of the Tibetan Section of the Ethnology Department of CIN; Pan Naigu, chairman of the Department of Sociology at Beijing University; and Dorji Tseten, former head of the Tibet Autonomous Region and currently the chairman of the China Tibetology Research Centre.