page 691 note 1. For some preliminary studies on economic reforms, see Ishikawa, Shigeru, “China's economic system reform: underlying factors and prospects,” 1982 (mimeographed)Google Scholar; Lee, Edmund, “Economic reform in post-Mao China: an insider's view,” Bulletin of Concerned Asian Scholars, No. 5 (1983), pp. 16–25Google Scholar; Wiens, Thomas B., “Price adjustment, the responsibility system, and agricultural productivity,” American Economic Review, 05 1983, pp. 319–24Google Scholar; Reynolds, Bruce L., “Economic reforms and external balance in China, 1978–81,” American Economic Review, 05 1983Google Scholar; Byrd, William, “Enterprise-level reforms in Chinese state-owned industry,” American Economic Review, 05 1983Google Scholar; Wang, George C., Economic Reform in the PRC (Boulder, Colorado: Westview Press, 1983)Google Scholar.

page 691 note 2. The period witnessed serious imbalances in the industrial structure, depressed standard of living, state budget deficits, and gross inefficiencies. Chengrui, Li, “China's economic situation in the ten-year-disaster period: an analysis,” Jingji yanjiu (Economic Research), No. 1 (1984), pp. 23–31Google Scholar.

page 691 note 3. For a concise discussion of economic changes during 1976–78, see Chengrui, Li and Zhuoyuan, Zhang, Zhongguo jingji ti fazhan (China's Economic Development) (Beijing, 1982), pp. 14–30Google Scholar.

page 692 note 4. Office of Policy Research of the Ministry of Agriculture, Zhongguo nongye jingji gaiyao (Outline of China's Agricultural Economy) (Beijing 1982), p. 9, and TJNJ 1938, p. 103Google Scholar.

page 692 note 5. Office of Policy Research, Outline of China's Agricultural Economy, p. 12Google Scholar.

page 692 note 6. National Bureau of Forestry, “The relationship between forestry and agriculture,” Hongqi (Red Flag), No. 2 (1979), pp. 23–26Google Scholar; Yongshi, Huang, “Develop forestry and maintain the ecological balance in agriculture,” Jingji yanjiu, No. 3 (1981), pp. 41—45, 58Google Scholar; Zhao Zongliu. “Economic readjustment and environment protection,” ibid. No. 5 (1981), pp. 67–73; Shuguang, Zhang, Jingji jiegou he jingji xiaoguo (Economic Structure and Economic Efficiency) (Beijing, 1982), pp. 62–63Google Scholar.

page 692 note 7. In China, the working age is 16–59 years for men and 16–54 for women. Total population of working age in 1978 is derived from total population in 1978 from TJNJ 1983, p. 103, and the percentage of total population at working age, which is assumed to be the same as that for 1982, 54·87%, based on tabulations of a 10% sample of the third national census, given in Population Census Office, State Council, and Department of Population Statistics, State Statistical Bureau (SSB), Zhongguo 1982 nian renkou pucha 10% chouyang ziliao (10 Per Cent Sampling Tabulation on the 1982 Population Census of the People's Republic of China) (Beijing, 1983), pp. 8–9Google Scholar. For total employment, see TJNJ 1983, p. 120.

page 692 note 8. According to Beijing Review, No. 22 (1979), p. 5Google Scholar, about 10 million people reach working age annually. This figure seems low. Those in the 15 year-old age group constituted 2·27% of total population, or 22 million in 1977. See Population Census Office and Department of Population Statistics, 10 Per Cent Sampling Tabulation, p. 265 and TJNJ 1983, p. 103. Even if we allow for the national mortality rate of 7% for this group, those entering the age 16 group in 1978 would be 20 million.

page 693 note 9. Lanrui, Fong and Leikuan, Zhao, “Current problems of urban employment in China,” Zhongguo shehui kexue (Social Sciences in China), No. 6 (1981), p. 195Google Scholar.

page 693 note 10. Nihei, Yuko Akiyoshi, “Unemployment in China: policies, problems and prospects,” JETRO China Newsletter, No. 38 (05-06 1982), pp. 19–20Google Scholar.

page 693 note 11. Emerson, John Philip, “Urban school-leavers and unemployment in China,” The China Quarterly, No. 43 (03 1983), p. 1CrossRefGoogle Scholar; Lanrui, Fong and Leikuan, Zhao, “Current problems of urban employment,” p. 195Google Scholar.

page 693 note 12. Under-employment is loosely defined as those with jobs who could have been removed with little or no effect on production.

page 693 note 13. Qitong, Zhong and Keliang, Sun, “The problem of establishing a new labour reserve system in China,” Jingji wenti (Economic Problems), No. 6 (1982), p. 22Google Scholar.

page 693 note 14. Nihei, Yuko Akiyoshi, “Unemployment in China,” p. 20Google Scholar. See also Chang, Gao, An Estimation of Labour Surplus in Rural China (Taipei: Chung-hua Institute for Economic Research, 1983)Google Scholar.

page 693 note 15. Population Census Office and Department of Population Statistics, 10 Per cent Sampling Tabulation, pp. 382–83Google Scholar.

page 693 note 16. Only those in natural sciences are included. TJNJ 1983, pp. 120, 525.

page 694 note 17. Fixed capital stock of state-owned enterprises increased by almost 20-fold. Renmin ribao (People's Daily), 9 April, 1981, p. 5. That of state-owned industrial enterprises increased from 14·9 billion yuan in 1952 to 319·3 billion yuan in 1978, and fixed assets in the agricultural sector (presumably excluding land), increased from 15·5 billion yuan in 1957 to 84·9 billion yuan in 1978. Zhou Sulian, “China's economic structure in the past three decades,” Hong, Ma and Shangqing, Sun (eds), Zhongguo jingji jiegou wenti yanjiu (Research on Problems Relating to China's Economic Structure) (Beijing, 1981), pp. 24–25Google Scholar.

page 694 note 18. About 48% of total fixed capital was less than 10 years old, 52% over 10 years, 42% over 15 years, 33% over 20 years, 14% over 25 years and 7% over 30 years old. Chuguang, Zhang, Jingji jiegou yu jingji xiaoguo (Economic Structure and Economic Efficiency) (Beijing, 1982), p. 134Google Scholar.

page 694 note 19. Zhiyuan, Liu, Sniping, Neng and Yang, Cao, “Several problems concerning technology transfer at the present stage,” Caijing yanjiu (Financial and Economic Research), No. 4 (1983), p. 11Google Scholar.

page 694 note 20. For shortcomings of the R&D system, see Hongchun, Yu, Zhonglin, Wang, and Hongmou, Cheng, “Science, technology and economic structure,” in Hong, Ma and Shangqing, Sun, Research on Problems, pp. 614–21Google Scholar. In the three decades since 1952 the contribution of technological progress (i.e. total factor productivity) to growth of total output was less than 10%. Yecai, Lu, “Expedite the transformation of science and technology into productivity,” Guangming ribao (Guangming Daily), 12 11 1982, p. 3Google Scholar.

page 694 note 21. Shuguang, Zhang, Economic Structure, p. 134Google Scholar.

page 694 note 22. Yuanchun, Dai, “Several problems in renovating fixed assets,” Jingji yanjiu. No. 10 (1982), pp. 64–65Google Scholar.

page 694 note 23. The ratio of material input to gross output for the material producing sector as a whole rose from 44·3% during 1953–57 to 55·8% during 1976–79, with the ratio for industry rising from 62·7% in 1966 to 65·9 in 1976–79, while that for agriculture rose from 27% in 1965 to 36% in 1977. Zhang Zhuoyuan, “Build a rational economic stucture to promote socialist modernization,” in Hong, Ma and Shangqing, Sun, Research on Problems, p. 78Google Scholar; and Yongchi, Wang, “The laws of value and economic efficiency,” Beijing daxue xuebao (Journal of Beijing University), No. 4 (1981), p. 77Google Scholar. It is not clear whether these ratios are based on totals in current or constant prices. Rough estimates of the ratios for the material sector as a whole and for all individual sectors except industry in 1980 prices show similar trends. Yeh, K. C., Gross Domestic Product of the Chinese Mainland 1957–82, Chunghua Institution for Economic Research (Taipei, 1985) (forthcoming)Google Scholar. For increases in physical input–output ratios in the metallurgical, electric power, coal, petroleum, and textile industries in 1977–79 compared with the lowest levels in the pre-1977 period, see Zhuoyuan, Zhang. “How to make enterprises really care about costs and raise economic efficiency,” Kuaiji yanjiu (Accounting Research), No. 3 (1982), p. 11Google Scholar.

page 695 note 24. Energy consumption per unit of GNP in 1970 prices increased by 28% during 1957–78. Guangzhong, Zhang, “Reference materials for studies in China's problems of economic efficiency,” Hubei caijing xueyuan xuebao (Journal of Hubei College of Finance and Economics), No. 3 (1982), p. 132Google Scholar.

page 695 note 25. Losses totalled 10 billion yuan, almost five times those of 1966. Zhuoyuan, Zhang, “Build a rational economic structure,” p. 79Google Scholar.

page 695 note 26. Ibid. pp. 77–80; Guangzhong, Zhang, “Reference materials,” pp. 130–32Google Scholar; Renmin ribao, 27 April, 1981, p. 5.

page 695 note 27. The most striking example was the use of land for grain crops even though it was more suitable for other crops. See Zhuoyuan, Zhang, “Build a rational economic structure,” p. 73Google Scholar. Sometimes there was also the tendency to build a power plant for each industrial project. Renmin ribao, 10 March 1979.

page 695 note 28. The definition of small enterprise varies with industries and has been changed in 1962 and 1978. See Yue, Li and Xunchang, Chen, “The structure of industrial enterprises by size,” Zhongguo shehui kexue, No. 1 (1981), pp. 68, 71–72Google Scholar.

page 695 note 29. Ibid. p. 69.

page 695 note 30. Yalin, Cao and Yongyin, Wang, “Raise the economic efficiency of China's railway construction,” Jingji yanjiu. No. 12 (1982), p. 48Google Scholar.

page 695 note 31. Nor did the irrational price system encourage them to economize. Coal was priced below production cost whereas petrol was way above cost, thus damping their incentives to produce and at the same time permitting the inefficient producers of petrol to show good profits. Zhang Shuguang, “On independent accounting of profit and loss,” ibid. No. 8 (1979), p. 74.

page 696 note 32. TJNJ 1983, p. 105.

page 696 note 33. In March 1979 the Party adopted the policy of “readjustment, reform, consolidation, and improvement.” At the end of 1980 the working conference convened by the Party Central Committee discussed the economic situation and laid down the guidelines for economic work. (Beijing Review, No. 30 (1981), pp. 3–4)Google Scholar. In June 1981 the Sixth Plenary Session of the 11th Central Committee issued the “Resolution on certain questions in the history of our Party since the founding of the People's Republic of China” (1981 JJNJ, pp. 2–25) which summed up the experience in economic construction since 1949. At the Fourth National People's Congress in December 1981, Zhao Ziyang set forth 10 major tasks for economic construction in his report on the work of the government, “The present economic situation and the principles for future economic construction,” Beijing Review, No. 51 (1981), pp. 6–36Google Scholar. When the 12th Party Congress convened in Spetember 1982, Yaobang, Hu reaffirmed the goal of quadrupling gross industrial and agricultural output by the year 2000. Renmin ribao, 8 09 1982Google Scholar.

page 696 note 34. Ziyang, Zhao, “Report on the Sixth Five-Year Plan,” Beijing Review, No. 51 (1982), pp. 10–35Google Scholar.

page 697 note 35. The economic policies adopted during 1963–65 are an exception. For brief discussions of the strategy underlying the First Five-Year Plan and the Great Leap, see K. C. Yeh, “Soviet and Communist Chinese industrialization strategies,” in Treadgold, Donald W. (ed.), Soviet and Chinese Communism (Seattle: University of Washington Press, 1967), pp. 327–63Google Scholar and Yeh, K. C., Agricultural Policies and Performance (Santa Monica, California: The Rand Corporation, 1969)Google Scholar. For discussions of the new strategy, see Hong, Ma, Xilun woguo shehui juyi jingji fachan ti xinzhanle (On the New Strategy of China's Socialist Economic Development) (Beijing, 1982)Google Scholar; Guoguang, Liu, “Changes in China's economic development strategy,” Zhongguo jingji wenti (China's Economic Problems), No. 4 (1982), pp. 1–3Google Scholar; Fureng, Dong, “Changes in China's economic development strategy,” Caimao jingji (Finance and Trade Economics), No. 4 (1982) pp. 11–16Google Scholar; Shiyong, Guai, Strategic objectives, priorities and programme of China's economic development,” Jingji yanjiu. No. 10 (1982), pp. 3–10Google Scholar; Zhen, Xia, “A new strategy for economic development,” Beijing Review, No. 32 (1981), pp. 12–17, 31Google Scholar; Shangqing, Sun, “Strategic changes in China's economic development,” Jingji yanjiu, No. 5 (1982), pp. 3–6Google Scholar.

page 697 note 36. Ziyang, Zhao, “Report on the Sixth Five-Year Plan,” p. 31Google Scholar. Youlai, Yu, “U.S. $1,000 by the year 2000,” Beijing Review, No. 43 (1980), p. 16Google Scholar. The per capita target was subsequently lowered to U.S. $800. See Wen Hui Bao (Hong Kong), 2 07 1984, p. 1Google Scholar.

page 699 note 37. Actually the relationship between the two concepts is more complicated. Some services, such as finance and business travel, are really inputs in the material sector and should not be counted as final products as the SSB apparently did. And NIP is not, strictly speaking, a net concept, because it is net of depreciation of productive assets only. This can be clearly seen by comparing the Chinese and western input-output tables. See Yeh, K. C., Gross Domestic Product, 1952–57, pp. 15–22Google Scholar.

page 699 note 38. This is done only for the agricultural and industrial sectors.

page 699 note 39. The details are explained in K. C. Yeh, Gross Domestic Product, 1957–1982.

page 700 note 40. The statement about faster growth of the material sectors should be qualified. In the period 1978–82, the reverse was true.

page 701 note 41. See, e.g. Renmin ribao, 19 November 1982, p. 5.

page 702 note 42. Kuznets, Simon, Modern Economic Growth (New Haven and London: Yale University Press, 1966), pp. 88–91Google Scholar.

page 702 note 43. The calculations of output shares are quite sensitive to price weights. A different set of price weights would show a different output structure. In the present case, however, changes in relative prices have not been significant enough to affect the major trends.

page 702 note 44. For a study of the trend based on cross-section analysis, see Kuznets, Simon, Six Lectures on Economic Growth (Glencoe, Illinois: Free Press, 1969), p. 45Google Scholar.

page 702 note 45. The growth of total output can be expressed as the sum of the indexes of growth of its components, each weighted by its respective share in total output in the base period.

page 702 note 46. This simplified model is not totally unrealistic. In China these two sectors together accounted for 75% and 80% of NDP in 1957 and 1978, respectively.

page 705 note 47. These figures are based on SSB's estimates in comparable prices. TJNJ 1983, p. 484.

page 705 note 48. TJNJ 1983, pp. 23, 420. The NMP is in comparable prices and imports, in current prices since imports in constant prices are not available.

page 705 note 49. Given the identity that output equals the number of workers multiplied by output per workers, the rate of growth of output then equals the sum of the rates of growth of employment and labour productivity. This relationship holds for the sectoral growth as well as growth of aggregate output. However, to link the growth of total output to changes in employment and labour productivity in various sectors, one must also take into consideration the relative shares of net output of each sector in net domestic product in the initial period.

page 706 note 50. TJNJ 1983, p. 150.

page 707 note 51. Conceptual and statistical issues surrounding the use of this ratio have been the subject of extended discussion among economists in the last two decades. On the one side, Klein treats it as one of the great ratios of economics. See Klein, Lawrence R., An Introduction to Econometrics (Englewood Cliffs, New Jersey: Prentice-Hall, 1962). p. 183Google Scholar. On the other side, Myrdal considers the ratio so defective as to be beyond salvage. See Myrdal, Gunnar, Asian Drama (New York: Random House, 1968), pp. 1,968–2,004Google Scholar. For other discussions, see Leibenstein, Harvey, “Incremental capital–output ratios and growth rates in the short run,” Review of Economics and Statistics, Vol.XLVIII, No. 1 (02 1966), pp. 20–27CrossRefGoogle Scholar; Walters, A. A., “Incremental capital-output ratios,” Economic Journal (12 1966), pp. 818–22Google Scholar; Vanek, J. and Studenmund, A. H., “Toward a better understanding of the incremental capital-output ratio,” Quarterly Journal of Economics (08 1968), pp. 435–51Google Scholar; Sato, K., “International variations in the incremental capital-output ratios.” Economic Development and Cultural Change (07 1971), pp. 621–40Google Scholar.

page 709 note 52. See Appendix, pp. 714–16.

page 710 note 53. See Nadiri, M. Isaq, “Some approaches to the theory and measurement of total factor productivity: a survey,” Journal of Economic Literature (12 1970), pp. 1,137–77Google Scholar, and Kennedy, C. and Thirlwall, A. P., “Surveys in applied economics: technical progress,” Economic Journal (03 1972), pp. 11–72Google Scholar.

page 710 note 54. Solow, Robert, “Technical change and the aggregate production function,” Review of Economics and Statistics (08 1957), pp. 312–20Google Scholar.

page 712 note 55. Data used in this calculation are from 1982 JJNJ, VIII, p. 7, TJNJ 1981, p. 20, and Appendix. Table A1.

page 712 note 56. Kuznets, Simon, “A comparative appraisal,” in Bergson, A. and Kuznets, Simon, Economic Trends in the Soviet Union (Cambridge, Mass.: Harvard University Press, 1963), p. 355Google Scholar.

page 712 note 57. Williamson, Jeflery G., “Dimensions of postwar Philippine economic progress,” Quarterly Journal of Economics (02 1969). p. 96Google Scholar. Note, however, the estimates of 69% for Taiwan, 74% for Japan, and 88% for India, in Wolf, Charles Jr, Gangadharan, R., Han, Kee Chun, Industrial Productivity and Economic Growth (Tokyo: Asian Productivity Organization, 1964)Google Scholar.

page 712 note 58. Bergson, A., “National income,” in Bergson, and Kuznets, , Economic Trends in the Soviet Union, p. 19Google Scholar; Williamson, J. G., “Dimensions of postwar Philippine economic progress,” p. 96Google Scholar.

page 712 note 59. See, e.g. Denison, E. F., Why Growth Rates Differ (Washington: The Brookings Institution, 1967)Google Scholar.

page 715 note 1. The growth rate is based on totals in current prices from TJNJ 1983. pp. 22, 25.

page 715 note 2. Ibid.

page 716 note 3. TJNJ 1983. pp. 323, 343.

page 716 note 4. Ibid. p. 25.

page 716 note 5. The growth rate is that for the period 1955–80. TJNJ 1983. p. 25.