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.

Perhaps no other foreign policy area brought forth the emotional anti communism characteristic of the 1950s as did American relations with the People's Republic of China. The so–called “ loss of China ”issue beginning in 1949, for which the Republicans primarily blamed the Democrats, severely strained the bipartisan approach towards foreign policy. In addition, four years before he died in 1951, Republican foreign policy leader Senator Arthur H. Vandenberg excluded China policy from the area of bipartisan agreement, while his party's loyalty to the defeated Nationalists remained strong. Senator Joseph McCarthy's“communists–in– government” charges during the Korean War, when American forces were engaged in combat with the People's Liberation Army, further exacerbated relations between the Republican and Democratic parties, and between the legislative and executive branches of government. Ominously, the possibility of a preventive strike on the China mainland also became the focus of serious consideration and possible implementation during the Formosa Strait confrontation of 1954–55.

On 26 June 1979 Peng Zhen, in a report to the Second Session of the Fifth National People's Congress, announced that as from 1 January 1980 Local Revolutionary Committees are to be replaced by local people's governments and the posts of provincial governors, mayors, chairmen of the autonomous regions, prefects of the autonomous prefectures and county heads restored accordingly.

The National Library of Beijing is the largest library in China currently open to foreigners. During 1979 and 1980 I used this library while carrying out research on the People's Bank of China and its role in industrial enterprise decision-making. Consequently, this report, in so far as it deals with the materials available, will focus only on those which are broadly related to the field of economics. It.is not, therefore, an account of all the Library's holdings, just a small part of them.

Between mid-1977 and mid-1979, the average annual rate of growth in Chinese industry fell below 5 per cent, and it appeared that the Chinese would not be able to fulfil the annual plan for 1979, especially in light industry.1 As it turned out, however, output surged in the second half of the year and the targets shown in Table 1 were met easily.

Since the founding of The People's Republic of China, research on the world economy has been developed on an unprecedented scale, although not without setbacks. The Cultural Revolution and the activities of the “ gang of four ” seriously affected such research and virtually brought it to a halt for 10 years. However, the removal of the “ gang of four ” has meant that work on the world economy has revived and reached a completely new stage of development.

The functions of any commodity distribution system include balancing of supply and demand and allocating available supplies among individual consumers on the basis of some acceptable criterion. In an unregulated market system, both functions are handled by the free movement of price. Short supply relative to demand results in higher market prices which both reduce demand and stimulate increased supply. The criterion upon which available goods are allocated is purchasing power as determined by income level. As prices rise those with relatively low purchasing power will be deterred or will purchase inferior substitute commodities to fulfil their needs. In poor countries in which basic commodities require a high proportion of household income, fluctuations in the prices of these commodities of the magnitude required to balance availability with requirements often have serious consequences for the welfare of poorly endowed groups.

The Chinese people are entering the eighth decade of the 20th century full of confidence and with a firm belief that they are moving towards the goal of modernization. In 1979, as the first of the battles for the realization of this goal, China put into practice the policy of “ readjustment, reform, rectification and improvement ” of the national economy. “ Readjustment ” means essentially changing the national economic structure and eliminating serious imbalance of ratios in order to remove obstacles to the further development of the national economy. “ Reform ” means chiefly reform of the economic system.