a permanent basis, and many have served on rotating assignments of various lengths, retaining a primary military function. This government, while effective in imposing stability, has not been adept at innovation and political work. With the rapid rise in industrial output during this period and a return to a more normal situation, there has been increasing dissatisfaction with its functioning, leading to open press criticism in its last year that the officers were "arrogant and complacent."

Also in its last year, this regime appeared to come under fire for excessively diverting resources into military enterprises, reflected in a curious press debate of "steel vs. electronics" priorities. The point appeared to be made that basic economic needs took precedence over exotic military requirements. The passing of this regime is shrouded in mystery, but the signs suggest that Mao had become increasingly unhappy with it.

3. The Chou En-lai regime (1971-?).-The present government has yet to show its distinguishing marks. It appears committed to unity, conciliatory politics, relaxed tensions, and an appeal to the national interest over petty partisanship. It is led by a respected original revolutionary, untainted by overweening ambition which tarnished the previous two regimes. Chou has alliances in all camps and a knack for staying clear of the crossfires of political feuds. He is indefatigable, with an acute sense of political timing and the art of the possible. He is thus a strong man for the present task.

However, the present political scene shows the catastrophic aftermath of a severe power struggle within a formerly strong regime. Bitter enmities and irrational feuds have evidently arisen among strong leaders who will not cooperate and cannot be purged without serious political cost and is reflected in the extreme number of vacancies existing in the top structure of power. Peking has also attested to its concern over the paralysis among middle level officials who tend to avoid decisions and concern themselves with trivia. It does not seem likely that the new regime can afford to move quickly to replace the military officers who now provide authority to the structure and the normalization of government may be a slow process. We may judge that Chou En-lai would seek a new balance by tailoring policies to internal social trends but we do not know how forcefully he can proceed against the political riptides that still plague his government.

III. ECONOMIC IMPERATIVES FOR THE FUTURE

For a generation the Chinese have lived a frugal, Spartan existence. Resources and development activities were constrained to small sectors in a drive for independence and self-sufficiency, and China acquired a substantial heavy industry complex, the advanced technology to operate it, and a well-equipped military including a nascent advanced weapons capability. But the development touched only a small share of the Chinese population, although redistribution of income improved the lot of the majority of the people while social programs and contrived political campaigns imparted a sense of progress and change.

Current social, political, and economic changes seem likely to alter this pattern in the coming decade. Development logic, the 20year Plan, and the thrust of the Cultural Revolution point to a much wider geographical spread of modernization, affecting a larger share

of the population. The human resources are now available to support this trend. The huge post-Liberation wave of youth is now entering maturity and has received a huge investment in its training and education.

Political forces are also strong in this direction. The youngest 75 percent of the population had not passed puberty at the time of the Liberation; they have less of an appreciation of how far China has come, and tend to see China as basically strong but stagnating. The Cultural Revolution fixed the blame for this situation on aged and outmoded leaders, and despite the return of many of these leaders to power, satisfying domestic progress may be needed to legitimize the future political structure.

However, economic growth priorities must still be balanced against other national goals. The economic planning of the early 1960s, when economic survival was in question, was challenged with some justification during the Cultural Revolution for subordinating politics, social change, and national power to exaggerated requirements of economic growth and efficiency. The Third Five-Year Plan growth targets were very conservative, enabling Chou En-lai to claim they were "substantially fulfilled" despite the Cultural Revolution disruptions. Currently, there is a rapidly reviving emphasis on economic growth priorities and organization. The large growth in output over the past three years has brought problems of management and coordination, particularly with a weakened planning apparatus and a decentralization of power to the provinces. Claims on output are also increasing, as in national defense, foreign aid, and a recent nationwide wage increase. Moreover, the Fourth Five-Year Plan, which emphasizes major infrastructure investments in roads, railroads, transport, public utilities, and resource development, is one which requires careful and specialized planning. Some sectors also appear to be lagging; for example, farm output, using the bench-mark years of good crop weather, grew by 6 percent annually during 1964-67 but by less than .5 percent annually during 1967-70,2 presumably due to disruptions in the fertilizer supply and unsuitable farm production policies.

These growth requirements should encourage a continued return to pragmatic policies. However, given the weakened politics and the uncertain turns of the internal political succession, it is uncertain how Mao and his lieutenants may calculate China's immediate requirements. Until a more stable regime appears, it is difficult to chart the pace and pattern of China's development.

2 See Ashbrook, op. cit., p. 5.

Part II. ECONOMIC SECTORS

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CHINESE INDUSTRIAL DEVELOPMENT: 1949-70

By ROBERT MICHAEL FIELD

I. INTRODUCTION

The index of Chinese industrial production presented in this paper is an elaboration of the index I prepared for the Joint Economic Committee in 1966.1 For the years 1949 through 1959, because the Chinese published data on the physical output of a large number of industrial commodities, it was possible to construct an index that can still be used with confidence. The index for these years has not been changed. For the years 1960 through 1970, however, the index is a revision and extension of my earlier work. The major difference is that the index for these years is presented in the form of a range rather than as a single-valued series because of the deterioration in the coverage and accuracy of the physical output data.

Although data on the output of specific military items were not available, these items had to be included in the index by imputation, because the weights could not be adjusted satisfactorily to exclude military production. Because most military production is concentrated in the metal processing industry, the assumption implicit in the construction of the index is that the military component of the metal processing industry grew at the same rate as the civilian component. It is almost certain, however, that the military component actually grew more rapidly than the civilian component. If the weight for the metal processing industry could have been adjusted, the rate of growth shown by the resulting index of civilian industrial production would have been lower than that of the index presented in this paper. On the other hand, if military production could have been included explicitly, the indexes for the metal processing industry and for total industrial production both would have been raised.

The accuracy of physical output data used to construct the index for the years since 1959 varies considerably from commodity to commodity. In general, it varies directly with the priority assigned by the Chinese to the industry producing the commodity and inversely with the number of enterprises producing the commodity. For example, with at least 200 cotton textile mills in China and the generally low priority accorded to the industry, the estimates for the production of cotton cloth are much less accurate than those for the production of crude steel, 80 percent of which is produced by the 10 largest steel mills. In spite of the deficiencies of the data, the trend in industrial production shown by the index is consistent with the information that is

See Robert Michael Field, "Chinese Communist Industrial Production," An Economic Profile of Mainland China, Joint Economic Committee of the U.S. Congress, Washington, 1967, pp. 269-295.

The methodology used in the revised version of the index was published in Robert Michael Field, "Industrial Production in Communist China: 1957-68," The China Quarterly, April-June 1970, pp. 46–64. (61)