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Conditions and Prospects for Economic Growth in Communist China*

Published online by Cambridge University Press:  18 July 2011

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Extract

In general terms, by the end of 1952, mainland China's productive capacity was reactivated and its institutional framework transformed to such an extent that the regime felt the time was ripe for launching an ambitious and comprehensive program of economic development. However, the announcement of a Five-Year Plan for China does not seem to have been preceded by a major debate on issues, methods, and problems of industrialization such as occurred in Russia in the 1920's. It would appear that Chinese Communist thinking and policy, as it has emerged, is almost completely hypnotized by the Stalinist model of economic development, with Preobrazhenskis and Bukharins absent from the scene.

Type
Research Article
Copyright
Copyright © Trustees of Princeton University 1955

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References

1 For an excellent analysis of the Soviet industrialization debate, see Erlich, Alexander, “Preobrazhenski and the Economics of Soviet Industrialization,” Quarterly Journal of Economics, LXIV (February 1950), pp. 5788.CrossRefGoogle Scholar

2 Johnston, Bruce F., “Agricultural Productivity and Economic Development in Japan,” Journal of Political Economy, LIX (1951), pp. 498513.CrossRefGoogle Scholar

3 Tsuru, Shigeto and Ohkawa, Kazushi, “Long-term Changes in the National Product of Japan since 1878,” Income and Wealth, Series in, Cambridge, Eng., 1953, pp. 1944Google Scholar; Yamada, Yuzo and Associates, Notes on the Income Growth and the Rate of Saving in Japan, Mimeo. 19, Tokyo, 1953, p. 1.Google Scholar

4 China Yearbook, 1948, Nanking, 1948; United Nations, World Iron Ore Resources and Their Utilization, New York, 1950Google Scholar; W. S. and Woytinsky, E. S., World Population and Production, New York, 1953.Google Scholar

5 Pauley, Edwin W., Report on Japanese Assets in Manchuria to the President of the United States, July 1946, p. 98.Google Scholar

6 The first portion of this railroad, running from Chungking to Chengtu, is an exception inasmuch as it links the Szechuan rice basin to the rest of the country. Generally, the reasons for concentrating on this western line are probably primarily strategic and political, designed to bring these remote areas under closer control by the center.

7 United Nations, Demographic Yearbook, 1952, pp. 224–31 and 264–69Google Scholar; Woytinsky, and Woytinsky, , op.cit., Tables 63, 82, and 86.Google Scholar

8 United Nations, Demographic Yearbook; Davis, Kingsley, The Population of India and Pakistan, Princeton, 1951, pp. 3637.Google Scholar

9 There were recurrent reports in the Chinese Communist press, in the spring and summer of 1954, that a sharp fall in the death rate has occurred. See, for example, New China News Agency, Peking, March 10, 1954, for a report on partial census results.

* In the concluding section of this article, to be published in April 1955.

10 See Estimates of the Capital Structure of American Industries, 1947, prepared by James M. Henderson and others, Harvard Economic Research Project, June 1953 (hectograph).

11 See the section on the Five-Year Plan below.

12 The agricultural and all other value products in this article were estimated in terms of Chinese Communist currency (JMP) and then converted into dollars at the official rate of exchange. Therefore, they reflect the 1952 price relationships in mainland China, with their peculiar institutional distortions. For this reason alone, if for no other, these value products are not internationally comparable.

13 Shen, T. H., Agricultural Resources of China, Ithaca, N.Y., 1951.Google Scholar

14 Gourou, Pierre, “The Development of Upland Areas in China,” in The Development of Upland Areas in the Far East, IPR International Secretariat, New York, 1949, p. 10.Google Scholar

15 As a matter of fact, the first collective farm in China— “The Spark” —was established in this region.

16 Shen, , op.cit., p. 363.Google Scholar

17 See the statement by Teng Tzu-hui, head of the Chinese Communist Party's Rural Work Department, noted in New York Times , November 2, 1954, p. 9.

18 Johnston, op.cit.

19 Schumpeter, E. B., et al., The Industrialization of Japan and Manchukuo, 1930—1940, New York, 1940, p. 251Google Scholar; Shen, , op.cit., p. 38.Google Scholar

20 “Economic Developments in Mainland China, 1949–1953,” in United Nations, Economic Bulletin for Asia and the Far East, IV, No. 3 (November 1953), pp. 1731.Google Scholar

21 For a fuller discussion of these cooperatives, see Doak Barnett, A., “China's Road to Collectivization,” Journal of Farm Economic, XXVV (May 1953), pp. 188202.CrossRefGoogle Scholar

22 “Decision on the Development of Agrarian Production Cooperatives,” December 16, 1953, reported in China News Analysis, Hong Kong, February 12, 1954.

23 “Order of Government Administrative Council for Enforcement of Planned Purchase and Planned Supply of Grain,” issued November 23, 1953, published by New China Agency, Peking, February 28, 1954.

24 United Nations, Economic Commission for Europe, Economic Survey of Europe Since the War, Geneva, 1953, p. 166Google Scholar, and Chart 13, p. 177.

25 As of November 1954.

26 Po I-po, “The 1953 State Budget of the People's Republic of China, ”Supplement to People's China, March 26, 1953; En-lai, Chou, “Report at the Fourth Session of the National Committee of Chinese People's Consultative Council,” in Ta Kung Pao, Hong Kong, February 5, 1953.Google Scholar

27 Speech at the Fifteenth Congress of the Ail-Union Communist Party (Bolshevik), Moscow, 1927; verbatim report, p. 67.

28 Compare Po I-po, op.cit,; To-fu, Chia, “Report to the 7th Session of All-China Trade Union Congress,” in New China News Agency, September 25, 1953Google Scholar; Lun-hsi, Wu, “New China on the Road to Industrialization,” in Ta Rung Pao, Hong Kong, October 1953.Google Scholar

29 This “general line” was first announced in an editorial of the People's Daily, on October 1, 1953, under the title, “Struggle for the Distant and Great Goal of Socialistic Industrialization.” Incidentally, all of our references to collectivization include producers’ cooperatives, on the assumption that the de facto distinction between the two is slight.

30 The new bond issue valued at six trillion JMP (about US $240,000,000) was launched in December 1953. See New York Times, December 10, 1953, January 23 and February 9, 1954.

31 New China News Agency, Peking, September 15, 1953.

32 Schwartz, Harry, “Soviet Aid to China,” New York Times, October 5, 1953.Google Scholar

33 “Text of the Soviet-Chinese Communist Communique on 7 Accords,” New York Times, October 12, 1954.

34 See Table 7 and Woytinski, and Woytinski, , op.cit., pp. 118–21.Google Scholar

35 United Nations, Economic Commission for Latin America Study on Iron and Steel Industry, II, E/N, 12/293, Santiago, 1952, Add. 2 and 3. This study gives the investment cost per ton of finished steel in a plant with a 250,000-ton capacity at US $400. The investment cost per ton of crude steel is estimated at US $170, all in terms of 1948 prices. In the 1,000,000-ton plant at Sparrows Point, Maryland, unit investment cost is estimated at US $283 per ton of finished and US $126 per ton of crude steel.

36 U.S. Federal Power Commission, Steam-electric Plant Construction Cost and Annual Production Expenses, Washington, D.C., 1950.Google Scholar

37 Input-output studies for the US economy, conducted by the Harvard Economics Research Project, would tend to indicate that about one-third of the new investment required per unit of increased output in steel and power production would consist of complex types of equipment. It was assumed that this equipment could not be manufactured in China and would, therefore, have to be imported from the Soviet Union.