1. The concept of national income used in this paper is consistently on the lines of the official Chinese one of the net domestic material product (NDMP). See my National Income and Capital Formation in Mainland China (Tokyo: Institute of Asian Economic Affairs, 1965), pp. 5–9Google Scholar. According to the State Statistical Bureau, the adjustment which the Bureau makes in order to convert the value of national income in the Chinese concept (NDMP) to the value of GDP in the western concept, is to add to the value of NDMP the values of the service industry income and depreciation of fixed capital assets, which amount to 7% and 6%, respectively, of the NDMP value. Net factor income accrued abroad is said to be negligible; hence the value of GDP is almost equal to the value of GNP. It follows that per capita NDMP in 1980 in current prices, of 371 yuan, corresponds to per capita GNP of 419 yuan in current prices.

2. Converting the above value of per capita GNP of 419 yuan to US$ value, using the average official exchange rate in 1980 of 1·5 yuan = 1 dollar, it is only 279 dollars. Compare this with the per capita GNP of other low-income developing countries as derived in The World Bank, World Development Report 1981 (08 1981), p. 134 using the same methodGoogle Scholar.

3. Chengrui, Li and Zhuoyuan, Zhang, “Several problems on proceeding with socialist modernization construction at a high speed,” Jingji yanjiu. No. 2, 1979Google Scholar; and Ligang, Song, “On the economic importance of varieties and qualities of commodities,” Renmin ribao, 26 12 1976Google Scholar.

4. Song Ligang, “On the economic importance,” estimates that the ineffective industrial products amounted in 1976 to as much as 30% of the total value of industrial production.

5. China's industrial classification involving the division into heavy and light industry was revised somewhat in 1963. Producer goods industries, formerly all classified as heavy industries (Ishikawa, , National Income, pp. 82–85Google Scholar), are now not necessarily done so, e.g. intermediate goods for the manufacture of textile goods are now all classified as consumer goods.

6. China's concept of industry comprises, in addition to manufacturing, the excavating industries and electricity, gas and water supply. Estimating the value of these additional industries as 10% of the total industry in the Chinese concept, the percentage of machinery output to manufacturing output turns out to be 30·7% for 1975. Compare this with the figures of 35·8% for Japan, 20·4% for India, 19·8% for Republic of Korea and 12·1% for the Philippines for around 1976.

7. Ishikawa, S., “The machinery industry development and the underlying factors with special reference to China's experience” (mimeographed) 1982Google Scholar.

8. The scale of the first trough is comparable to that often observable in a war economy. For example, the trough which occurred in Japan at the time of defeat in the Second World War is compared with that in China in the following table in terms of the width and deepness of the trough

9. It was known recently that in 1970–72 there was another attempt to introduce the economic strategy of the Great Leap type. Statistically, however, this period is not distinct.

10. Weizhi, Wang, Renkou tongji, pp. 76 and 86Google Scholar.

11. It is likely that the “deurbanization” trend during 1960–76 is at least partly a simple statistical phenomenon due to the change in the definition of urban areas. The reason is as follows. Although Zheng, Liu et al. , Renkou tongjixue (Population Statistics), Chinese People's University Press, 1981, pp. 64–65Google Scholar, described the existing definition of urban areas according to the familiar 1955 rule, Weizhi, Wang, Renkou tongji, pp. 35–36Google Scholar indicated that there is a new 1963 rule and described the existing definition according to that rule: the lower limit of urban areas in terms of the size of total population as well as the non-agricultural population was somewhat larger than the former rule. Therefore, if the latter is valid, the urban population ratio for the post-1963 period is likely to be shown somewhat smaller than the ratio calculated according to the 1955 rule.

12. The proportion of the total population which was occupied by those residing in the slums and the squatters was 45% in Bombay (1971), 67% in Calcutta (1971), 26% in Karachi (1971), 35% in Manila (1972), 29% in Seoul (1974) and 8–15% in Bangkok (1974). United Nations (ESCAP), Economic Survey for Asia and the Pacific, 1978, Table 74Google Scholar.

13. The difference seems to apply to that between the urban and the rural sectors. See Yunqi, Tang', “Discussion on labour employment policy of out country,” Renmin ribao, 4 07 1981Google Scholar, which reported that, fust, the number (including himself) fed by each worker or staff in the urban areas was 3·2 in 1957; it decreased to about 1·8 in 1980 and secondly, the number of employed females in the urban area increased remarkably during the past 22 years: the proportion of female to total workers and staff was 12% in 1952; it increased to nearly 30% in 1979.

14. See remarks attached to Table 2.

15. Xiaoping's, Deng report on Zhengfeng movement in Zhonghua renmin gongheguo fagui huibian (Collective Laws of the PRC), Vol. 6, 09–12 1957Google Scholar; Ping, Sun, “Why is it necessary to enforce a rational wage system,” Xuexi, No. 23, 1957Google Scholar and Muqiao, Xue, “Statement on a labour employment problem in the urban area,” Renmin ribao, 20 07 1979Google Scholar.

16. This is a registered number of those seeking jobs. Ping, Sun, “A labour employment problem,” Lao dong, No. 21, 1957Google Scholar.

17. Evidence is indirect. For instance, Mr Kang Yonghe, director of the State Labour Administration, said in a press interview that in the period of the First Five-year Plan the unemployment phenomenon was basically solved; during 1957–66 in general no unemployment problem existed; that the recent employment issue had arisen mainly due to the turmoil of the 10 years beginning in 1966. At that time, the national economy was brought to the verge of disintegration, and this affected employment. Another cause was inadequate development of commerce, the catering trade and other service industries. This resulted in several million people losing employment opportunities, though urban population increased quickly: Beijing zhoubao (in Japanese), 12 February 1980.

18. These are, indeed, similar to what happened in workers' households in the Soviet Union during 1928–37 and 1944–50: Chapman, Janet G., Real Wages in Soviet Russia since 1928 (Cambridge, Mass.: Harvard University Press, 1963), pp. 165–75CrossRefGoogle Scholar; Bergson, Abram, The Real National Income of Soviet Russia Since 1928 (Santa Monica: The Rand Corporation, 1961), pp. 251–53Google Scholar.

19. In addition to the increase in wage rates and bonuses, which together constitute “average wages,” “allowances” (butie) under various titles increased significantly. I thank Professor Lardy for directing my attention to this fact.

20. This statement is based on an observation of figures of columns (8), (9) and (10), Table 4, and the observation is crucially affected by the assumption underlying the complication of the rural cost of living index. This assumption is that the grains distributed by production teams to members have invariably been priced according to, or proportionately to, the state procurement price of grains. This seems to be valid at least until 1979. See Muqiao, Xue, Zhongguo shehui-zhuyi jingji wenti yanjiu (Studies on the Problems of China's Socialist Economy) (Beijing: Renmin Chubanshe, 1979), pp. 134–35Google Scholar.

21. For international comparisons, the rate of domestic investment in the Chinese National Income concept should be converted to that in the western one. See footnote 1 and notes attached to Table 5. For 1979 the rate of domestic investment in the Chinese concept was 34%; when converted to the western concept it was about 31%.

22. Yue, Li and Shengcheng, Chen, “The proportions of large, medium-sized and small enterprises in our industrial makeup,” Zhongguo shehui kexue, No. 1 (1981), p. 68Google Scholar.

23. Hua, Ding and Xingguo, Wu, “Correct the orientation of capital construction to increase the economic returns from investment,” Jingi yanjiu, No. 1 (1982), p. 45Google Scholar.

24. Examination of these kinds of information was made in my article in Ishikawa, S. (ed.), 1980-nendai no Chūgoku Keizai (The Chinese Economy in 1980) (Tokyo: Japan International Affairs Institute, 1980), pp. 14–16Google Scholar.

25. Zhixin, Kang, “China's capital construction in 1980,” Zhongguo jingji nianjian 1981, pp. IV–142Google Scholar.

26. The investment goods sector here refers to the concept in which the national economy is divided into two production sectors: the investment goods sector and the consumption goods sector. Intermediate goods are separated into either investment goods or consumer goods according to the final direction for which they are used. This sectoral division is identical to that used in the Fel'dman model referred to later. In my paper, “Capital accumulation in mainland China,” in Szezepanik, E. F. (ed.), Economic and Social Problems of the Far East (Hong Kong: Hong Kong University Press, 1962)Google Scholar, coefficients are estimated for the First Five-year Plan period and for the years 1952–58: these are 43·5% and 45·6% respectively. They are compared with the available estimates for Soviet Russia and India.

27. As for the Fel'dman growth model, refer to Domar, Evsey, Essays in the Theory of Economic Growth (Oxford: Oxford University Press, 1957)Google Scholar, Chap. 9 (“A Soviet model of growth”). As Fel'dman was an economist who worked in the Soviet State Planning Commission in the 1920s, his model naturally had a close familiarity to the Marxian Reproduction Scheme or, to be more precise, a version of it which is restated to explain the so-called “principle of priority-development of the production goods sector.” In China, Guoguang, Liu, “A preliminary discussion on the quantitative relationship between the rate and proportions of socialist reproduction,” Jingji yanjiu, No. 11, 1962Google Scholar [reproduced in his Shehui zhuyi zaishengchan wenti (Beijing: Sanlien Book Store, 1980)Google Scholar] discusses the question of the allocation of the products of the production goods sector between the different sectors in relation to the resulting levels of income and consumption, and reaches a similar conclusion to that of Fel'dman. The constraints on the choice of the allocation coefficient which arise from the minimum consumption requirement and which are not touched upon the original Fel'dman model (see my paper, “Capital accumulation”) are however, taken into account by Liu: see Lin, Cyril L., “The reinstatement of economics in China today,” The China Quarterly, No. 85, 03 1981CrossRefGoogle Scholar, which provides a good account of Liu's article and other related discussions.

28. E.g. adoption of an 8-grade wage scale system in 1956, with the ratio of the highest to the lowest wage scale being on an average 1: 3·2.

29. Xiaoping's, Deng speech at the Ninth National Representative Conference of Chinese Federation of Labour Unions, 11 October 1978, in Renmin ribao, 12 10 1978Google Scholar. Also, in the Central Committee of the CCP's Decision on Several Problems in Speeding Up Industrial Development, there is an article on “Discipline” (Renmin ribao, 4 07 1978)Google Scholar. The comment on that article points out that, due to the disturbance caused by the “gang of four,” there exist at present serious phenomena of weakened labour and financial discipline, and anarchism, all of which exert a harmful influence.

30. Ishikawa, S., “China's food and agriculture – performance and prospects,” in Reisch, Erwin M. (ed.), Agriculture Sinica (Berlin: Duncker and Humblot, 1982)Google Scholar; Ishikawa, S., “On labour absorption in China's agriculture,” Ishikawa, S., Yamada, S. and Hirashima, S. (eds.), Labour Absorptidn and Growth in Agriculture – China and Japan (Bangkok: ILO-ARTEP, 1982)Google Scholar.

31. See esp. Ishikawa, “On labour absorption in China's agriculture.”

32. Ishikawa, S., “Resource flow between agriculture and industry – the Chinese experience,” in Developing Economies, V–1, 03 1967Google Scholar.

33. The substantial increase in food grain imports in Phase III is officially said to have been based on a deliberate policy to “make food grain imports steadily and in a large amount so that it becomes possible to readjust the irrationally based production structure of agriculture and to let the peasants take rest and build up their strength”: Yongxi, Wang et al. , “Views on strategic problems in China's agricultural development,” Jingji yanjiu, No. 11, 11 1981Google Scholar.

34. Zhongguo nongye nianjian 1981.

35. As the prices of agricultural products remained almost stable in Phase 11, this trend in the marginal productivity of labour can also be considered as measured in value terms.

36. On this concept, compare Viner, Jacob, Studies in the Theories of International Trade (New York: Harper and Brothers Publishers, 1937), p. 559Google Scholar.

37. An illustrative computation of this index for 1975 with 1965 as the base year is as follows:

38. Zhongguo nongye nianjian 1981.

39. In a private communication, Rawski has drawn attention to a recent study of Nicholas Lardy and considered that the policy of provincial and even sub-provincial “self-reliance” in food grains was an important cause in this declining marketable ratio.

40. The discussion of this paragraph is essentially a summary of my article in Ishikawa (ed.), 1980-nendai no Chūgoku Keizai and “China's economic system reform: underlying factors and prospects.”

41. The analysis of these alternative situations in terms of the same theoretical formulation, is made in my paper, “Personal income differentials in China and their determinants,” Ajia Keizai (Asian Economies), 17–6 June 1976.

42. Of the various forms of the production responsibility system which is currently being introduced in rural China as a substitute for the existing People's Commune system, the most elementary type is what is called baochan-daohu or baogan-daohu, a form that is essentially very close to the family farm. This form is stated as suited to low productivity and low management-capability areas. It is interesting to note that this form should be applied also to areas in which the productivity level is not low, but there is a condition to the effect that member peasants do not trust local officials because of their past bureaucratism. Central Secretariat, CCP and Research Team of the Central Party School, “Survey on a few types of the production responsibility system currently in operation in rural areas,” Renmin ribao, 1 09 1981Google Scholar.

43. Wang Yongxi etal., “Views on strategic problems.”

44. The methodological aspect of the discussion in this subsection is based on my paper: “A note on the choice of technology in China,” The Journal of Development Studies, IX–I, 08 1972Google Scholar. As for the factual aspect, see my paper referred to in footnote 24.

45. These figures are obtained from the World Bank. Regarding the world inflation factor, refer also to the following IMF index for unit value of world exports and imports (with 1975 = 100) in International Financial Statistics, Supplement Series No. 2 IMF 1981.

46. S. Ishikawa, “The machinery industry development and the underlying factors with special reference to China's experience.”

47. I am indebted to Professor Takeaki Kariya for advising me to use spectrum analysis for the analysis of this part.

48. The trough for industries that is observable with the bottom in 1955 is considered to reflect the end of the recovery period from the destruction of war and civil war.

49. This adjective is used here with reference to conditions of “unlimited supplies of labour” in Lewis, Arthur, “Economic development with unlimited supplies of labour,” The Manchester School of Economics and Social Studies, 05 1954Google Scholar.

50. There are two cases in the period of the People's Republic in which the increase in the urban workforce without adequate preparation for food provision to it brought about acute food shortages in urban areas: one during the Great Leap and the other during 1970–72. Jianbai, Yang and Xuezeng, Li, “China's historical experience in handling the relations between agriculture, light industry and heavy industry,” Zhongguo shehui kexue (Social Science in China), No. 3, 05 1980Google Scholar. Apart from these extreme cases, the food supply constraint was fully effective even in more normal years; hence, the strong and persistent control to prevent rural residents from moving into the urban area.

51. I have attempted to construct such an integrated model of socialist economic growth with the aim of using it for a hypothetical economic projection of China. Ishikawa, S., “A hypothetical projection of Chinese economy: 1966–1981,” The Developing Economies, VII–3, 09 1970Google Scholar.

52. S. Ishikawa, “China's economic system reform: underlying factors and prospects.” Also see Ishikawa, “China's food and agriculture: performance and prospects.”