Post-Mao politics in the People's Republic of China has been largely the politics of reform. Probably crucial to the success of all other reforms is the major effort to restore and develop the Party's cadre management system. Indeed, this very argument is reflected in the recent official appreciation in China of Stalin's dictum “cadres decide everything,” accompanying the recognition that the current modernization drive requires massive qualitative elite transformation and that deficiencies in the cadre system have prevented such a transformation.

One of the major changes in Chinese Government policy since the death of Mao Zedong has been the new emphasis on the need for stability and regularity in everyday life, to be achieved by the systematic codification of laws and the strengthening of institutions for administering them. Since 1978 much legislation has been enacted with this end in mind, but the significance of this legislation is not self-evident. What the new laws minimally represent is a set of rules promulgated by the government which purport to govern social relationships in specified areas. Whatever else they might mean – that is, what social effects will follow from the declaration of particular rules – needs to be understood through a study of the individuals and institutions that will have to deal with these rules. Fundamentally, this is a matter of asking whether and why violations of “the law” should matter, and who has the power to find a violation and to remedy it.

After the 1927/28 upheaval in the communist movement, a complex relationship evolved between Chen Duxiu (1879–1942) and Leon Trotsky (1879–1940). To date little has been written about this relationship in the west. The relationship between Chen and Trotsky, however, deserves treatment in its own right for various reasons. First, an elucidation of the contacts between them should close a significant gap in the respective biographies of the two Opposition leaders. The intention is not only to define Trotsky's role as seen from Chen's perspective, but also to emphasize the Far Eastern component hitherto underestimated in biographies of Trotsky. Secondly, the reconstruction of the relationship between Chen and Trotsky constitutes an important, correcting supplement to our knowledge of the developments ( = Wirkungsgeschichte) of “Trotskyism” in China, as it has been described as a concrete phenomenon as well as an ideological-political undercurrent. Thirdly, a study of the relationship between Chen and Trotsky should provide a better understanding of relations between the Communists of China and of the Soviet Union.

In 1979 when debate over economic reform gained momentum, the future role of China's banking system became a major topic. Having fallen into obscurity during its merger of 1970–77 with the Ministry of Finance, the newly independent People's Bank of China became an aggressive advocate of reform. With its aim directed at the Ministry of Finance as well as local party “barons,” the bank's advocates called for an end to the Sovietinspired “Big Budget, Small Bank” financial system and to local Party interference in the bank's operations. Under this system, of which the 1956 credit reforms were a crucial part, the People's Bank had two principal functions. First, by carefully auditing the financial operations of all state enterprises, the bank was to ensure their adherence to the state plan. Bank credit was meant to compel enterprise management adherence to the state plans. The second function was a quantitative control of the nation's money supply. Bank supervision of enterprise finances was meant to be one way to this objective. But from its first efforts in 1955 to implement such micro-financial controls over the economy, the People's Bank encountered strong opposition from enterprise management, local bureaus of finance, the Ministry of Finance, and the Party apparatus. As a result, its supervisory function began to atrophy, leaving the bank to pursue control over the money supply. This it did primarily through reliance on its savings operations which, in contrast to enterprise supervision, enjoyed the strong support of the Party apparatus. By the height of the Cultural Revolution Party leftists saw the bank as a perfect object for bureaucratic “simplification.” Aside from its savings operations, its credit and even financial planning functions had become vestigal. Consequently, in 1970 the headquarters of the bank was dissolved and local bank branches merged with the budgetary system.

The development of work incentives has been a perennial problem in planned economies. In China's countryside the pendulum has swung from emphasis on non-material and egalitarian incentives under Mao to the more individualistic incentives of the post-Mao era. In the late 1970s, China's new leaders introduced the production responsibility system (shengchon zerenzhi) which sought to motivate farmers by rewarding them for completing specific tasks. Both old and new measures have been used to implement this system. Cadres have borrowed certain work measurement methods attached to the old labour-day work payment system, operating since the mid 1950s, which fixed responsibility for tasks and awarded labour days when work was completed. But cadres have also adopted an entirely new work-payment system in which households negotiate with production teams to farm given parcels of land. These households agree to return a certain quantity of their crops to fulfil collective and state obligations and are then permitted to retain the surpluses for themselves. This new system is called baogan daohu (“full responsibility to household,” hereafter referred to as the baogan system). Sometimes the system is also referred to as the jiating lianchan chengbao zhi or the household responsibility system.

The Department of Economics at Nanjing University (NanDa) was established over 60 years ago. In 1952, however, when China's universities and colleges were restructured along the Soviet pattern, the department was merged with Fudan University's Economics Department. The combined department was housed in Shanghai. In 1978, after some 26 years, a department was reinstated at NanDa, but none of the university's former faculty returned. At present NanDa has the only Economics Department in Jiangsu Province. Furthermore, there are no institutes of economics and finance in the province as there are in many other provinces and municipalities.