¹ Washington: U.S. Government Printing Office, 1967.

² In the first half of 1961, state factories met only 15–9 per cent, of the planned target for the manufacture of weapons, equipment, accessories and parts for the military. General Rear Services Department, “Report on the Discussion Meeting Concerning the Work of Rear Services for the Entire Army,” transl. in Cheng, J. C. (Ed.), The Politics of the Chinese Red Army (Stanford, Cal.: Hoover Institution, 1966), p. 747Google Scholar.

³ The text of what was said to be Liu's, self-criticism appeared on wall posters which were published in the morning edition of the Mainichi (Tokyo) newspaper on 01 28 and 29, 1967Google Scholar.

⁴ A summary ofMao's, speech appeared in wall posters in Peking and was published in Mainichi on 03 9, 1967Google Scholar. The speech was supposed to have been made to the 10th Plenum of the Chinese Communist Party Central Committee.

⁵ This information is all from Liu Shao-ch'i's self-criticism although the existence of the “responsibility farm system” at that time has been confirmed in other sources as well.

⁶ Mao's desire to “further strengthen the collective economy” in opposition to the misguided policies of Liu and Teng comes out of Liu Shao-ch'i's confession.

⁷ For a more detailed discussion of many of these changes, see myMarket Control and Planning in Communist China (Cambridge, Mass.: Harvard University Press, 1966)Google Scholar, Chapter IV.

⁸ See Richman, Barry M., “Managerial Decision Making and Performance at the Enterprise Level in Communist Chinese Industry,” paper prepared for the Joint Economic Committee of the U.S. Congress (1967)Google Scholar.

⁹ Liu, Ta-chung, “The Tempo of Economic Development of the Chinese Mainland, 1949–1965,” in Joint Economic Committee, Economic Profile of Mainland China, pp. 45–76Google Scholar.

¹⁰ Another possibility might have been the outright abandonment of collectivisation. The point made is that, if one believes the Hong Kong figures, it is difficult to avoid concluding that it was not possible for China to raise agricultural output by means of capital investment. Under those circumstances one might legitimately wonder why the Chinese Communists were bothering to produce and import more and more chemical fertiliser.

¹¹ These emigré interviews are reported in Ezra Vogel, unpublished manuscript. This 20 to 30 per cent, rise would seem to indicate that the depth of the crisis in 1960 is better reflected by the official data than the Hong Kong estimates.

¹² Snow, Edgar, The Other Side of the River (New York: Random House, 1961), p. 188Google Scholar. On page 624, Snow states that production was 17–20 per cent, below normal.

¹³ Guillain, R., When China Wakes (New York: Walker and Co., 1966), p. 117Google Scholar.

¹⁴ Snow, , op. cit., p. 621Google Scholar.

¹⁵ The yield response for such comparatively small amounts of fertiliser is difficult to calculate. According to data in Liu, Jung-chao, “Fertilizer Supply and Grain Production in Communist China,” Journal of Farm Economics, 11 1965, pp. 929–930Google Scholar, yield responses eventually level off at three kilograms of grain for every one kilogram of nitrogenous fertiliser, but the marginal yield for lesser amounts of fertiliser per mou is quite a bit higher. I have used 2.5:1 and 3:1 to be on the conservative side.

¹⁶ For weather conditions in 1957 and 1965, see Jones, E. F., op. cit., p. 93Google Scholar.

¹⁷ Jones, E. F., op. cit., p. 82Google Scholar states that the number of draught animals in 1965 was probably a little over 60 per cent, of the 1957 level. If accurate, this drop may explain why chemical fertilisers only raised output 15 million tons by 1965 (over 1957) instead of 25 million tons or more as one might have expected from yield response data (assuming a 4:1 yield response).

¹⁸ Other arguments that on close examination don't hold up include (a) the possibility the population has shifted toward the very young who consume less grain per capita; (b) the possibility that the production function in agriculture is so peculiar or rural cadres so lacking in intelligence that yield response from the application of fertiliser is extremely low; etc.

It is worth noting that Ta-chung Liu once argued that the 1952–55 per capita grain consumption figures derived from official sources were so low “that even the Chinese people, long accustomed to hardships, could not very well have survived as a nation on this starvation diet for such a long time.” (Liu, and Yeh, , op. cit., p. 45)Google Scholar. The figures for 1953, 1954 and 1955 which Ta-chung Liu felt were so low (calculated in the same way as the estimates in Table I) are ·266, ·265, and ·274 metric tons per capita, or at least between one and six per cent, higher than the Hong Kong attachél's (and Liu's figures) for 1963–1965.

¹⁹ Grain imports have to be understood as a problem connected with the supply of cities, not one of raising average per capita consumption in the country as a whole. The grain for northern cities, if not supplied by imports, must be brought over 1,000 miles by rail from a few key surplus areas (Szechwan, Hunan, etc.). This burdens the rails and is a powerful disincentive for farmers in those surplus areas.

²⁰ Field, R. M., “Chinese Communist Industrial Production,” in Joint Economic Committee, Economic Profile of Mainland China, pp. 269–296Google Scholar. Field's precise figure (1965/1957) is 37 per cent.

²¹ Jones, E. F., op. cit., p. 95Google Scholar. Chinese statements about industrial output in 1961–65 have several gaps which prevent a straightforward reconstruction of their estimates. For a discussion of alternative reconstructions of official statements on industrial output, see my “Comments on Professor Ta-chung Liu's ‘Economic Development of the Chinese Mainland’” in Ho and Tsou (eds.), China's Heritage and the Communist Political System (forthcoming).

²² When I state that an industry's performance overstates or understates overall industrial growth, I mean that a regression equation derived from 1952–57 data relating say cement to industrial output would, using the 1965 cement figure, project a figure for overall industrial output that was too low.

²³ Using value added for producers' goods industry (Liu and Yeh estimate) as the dependent variable and crude steel as the independent variable, I obtained the following regression equation using 1952–57 data [y=·82+l·95X(R2=·99)]. Using Field's 1965 steel figure (11 million tons), the projected value of producers' goods industry is 22 billion. The regression equation for coal and producers' goods industry is, y=–4374+117·74x(R2=·90).

₂₄ The rapid development of nuclear weapons may be a better explanation for the comparatively large increase in electric power generation than the existence of excess electric generating capacity. Conventional weapons development has probably also progressed rapidly, but performance in this sector would probably be correlated with steel output. There is also the question of whether military industries should be placed in the producers' goods sector, but this issue does not affect the reliability of the estimates, only their interpretation.

²⁵ Field's estimates are not the highest available. In his Table 9, all the various estimates by Soviet and U.S. Government Agencies are presented, many of which are somewhat higher than the figures Field himself uses.

²⁶ Liu, T. C. and Yeh, K. C., op. cit., p. 68Google Scholar.

²⁷ In the 1953–57 period, the high rate of growth in this sector was made possible in part by the existence of considerable unused capacity at the beginning of the period. There is also the fact that heavy industry was a small part of total national product. By concentrating investment resources from other sectors on this one small sector, it was possible to obtain very high rates of growth in that one sector. By the 1960's the heavy industry sector was no longer small relative to total GNP.

²⁸ For emigrant information on the Third Five-Year Plan see Jones, E. F., op. cit., pp. 87–88Google Scholar.

²⁹ Mao's great concern over attitudes of the younger generation is well documented. It was a basic theme in his fairly recent discussions with a number of visitors to China (Snow, etc.). It was also a major part of his address to the 10th plenum in September 1962 (see note 4).

³⁰ Mao may still believe that ultimately his solutions in the political and ideological sphere may lead to more rapid economic growth as well. The timidity with which the “cultural revolution” has approached the economy, however, would suggest that Mao and those supporting him have few illusions about the short run.

³¹ The concept of subsistence is a vague one and hence so is the concept of a surplus above subsistence. China, however, did produce 25–40 per cent, more agricultural output per capita in 1957 than India. In 1959–61, Chinese output may have fallen to the level normally existing in India.

³² “Welcome to Upsurge of Great Cultural Revolution in Industrial and Mining Enterprises,” People's Daily editorial (December 1966), reprinted in the Peking Review No. 1, 1967, pp. 20–21Google ScholarPubMed.

³³ E.g., “Decisions of the Central Committee of the Chinese Communist Party Concerning the Great Proletarian Cultural Revolution,” August 8, 1966, and “Discuss Once Again Taking Firm Hold of the Revolution and Stimulating Production,” People's Daily editorial, November 10, 1966, which both state that “any idea of counterposing the great cultural revolution against the development of production is incorrect.” The implication of this statement and the one quoted at length above is that many people were arguing that the cultural revolution would interfere with production in a major way.

³⁴ The criticisms of Sun Yeh-fang were broadcast by Peking on October 26, 1966 and by the New China News Agency (NCNA) on November 26 and 29, 1966. It is an often used technique in China to criticise some clearly identified “rightist” for “errors” that many others “less rightist” might be tempted to follow (e.g., the criticism of the Soviet Union in the early days of the split was technically directed at Yugoslavia, but everyone knew who was the real object of attack).

Sun was attacked for advocating the use of the profits target as the key indicator of plant performance, among other things. The real theme of the attack, however, is more Sun's reputed belief that the political wars had been won and that the real battle remaining was the economic one.

³⁵ There are many statements to this effect. Perhaps the best indication of the attitude toward technical (and presumably economic) matters is contained in point No. 12 of the “Decision of the Central Committee of the Chinese Communist Party Concerning the Great Proletarian Cultural Revolution,” August 8, 1966 (Peking Review, No. 33, 1966, p. 10)Google ScholarPubMed. Point No. 12 nearly goes as far as saying leave scientists and technicians alone unless they have been out and out traitors.

³⁶ These remarks are based on discussions with individuals familiar with the progress of trade negotiations in Japan and West Europe.

³⁷ Preliminary 1966 data for most of China's major Western trading partners (plus Japan) has appeared in a report of Schwartz, Harry in the New York Times, 02 19, 1967Google Scholar. Japanese newspaper sources place total Chinese trade in 1966 at 4·16 billion U.S. dollars (statement of E. O. Reischauer to the Joint Economic Committee, April 5, 1967).

³⁸ “Cultural Revolution Spurs New All-Round Leap in China's Economy,” Peking Review, No. 2, p. 15. Agriculture does not appear to have been much affected by the cultural revolution, but we don't have enough evidence to really tell. Reports in late 1966 that private plots were being reduced were based on a few scattered reports which really indicated that very little was being done in the countryside.

³⁹ See, for example, NCNA English release of February 27, 1967, and a Peking broadcast of March 7, 1967. The former deals with problems created by the struggle in Shanghai factories and how they were quickly overcome and January targets fulfilled. The latter speaks of pile ups of coal on railroad sidings near T'aiyuan at the beginning of the year. Examples from other sources can be easily added.

⁴⁰ Although there is considerable evidence that Red Guard groups were in the factories in January, it is not at all clear that these groups had any real power. Perhapsthey threw out some managers, but I have seen no evidence that they did.

⁴¹ The Chinese press is full of articles to this effect. They seem to begin in the latter half of February 1967 and have continued up to the present (end of March 1967). See, for example, the letter of the Party Central Committee reported in Red Flag, No. 4, 1967.

⁴² See report of Braestrup, Peter, New York Times, 02 19, 1967Google Scholar.