enhanced by the more realistic assessments that have been made of lagging industrial branches such as coal. After years of minimizing investments in the coal industry, the new plan envisages widespread mechanization of the industry, partly through imported equipment. This should help to alleviate chronic coal shortages that have had an adverse effect on other branches of industry.

In the agricultural sector, the planned rate of growth, from 4 to 5 percent per year from 1978 through 1985, is higher than the 32 percent annual gains achieved in the 1964-74 decade. Consequently, it seems unlikely that China will achieve the target of 400 million metric tons of food grains by 1985. Yet, because of the large investments that have already been made in irrigation systems and the ability of the Chinese to diffuse rapidly higher yielding seed varieties, the average rate of agricultural growth may approach 4 percent per year, given average weather conditions. Because of the significant decline in the rate of population growth that has been underway for some time, an average rate of growth of 3%1⁄2 to 4 percent would be a considerable accomplishment. Food grain output would be over 350 million metric tons in 1985 and per capita food supplies would be significantly higher than at present. An average annual increase of 3%1⁄2 to 4 percent would result in more than a 2:1 margin between the rate of growth of agricultural output and population growth. In most other Asian countries at comparable levels of development, rates of growth of food output are barely equal to population growth.

31

A return to economic performance similar to that of the 1964-74 decade, however, is dependent on two crucial conditions. First, there must be a stable political environment that is conducive to long-run economic planning. In the absence of automatic mechanisms for determining the allocation of resources, these decisions are made through a direct political process that is extremely vulnerable to disruption. If the political consensus that appears to underlie the 10-year plan should be shaken, there could be a renewed paralysis of the planning process, a deferral of investment decisions, and a decline in the rate of economic growth.

A second condition for the resumption of sustained growth is the deferral of the modernization of China's military establishment. The underlying scarcity of resources and the envisaged increase in the flow of investment to improved social services and transportation infrastructure; to scientific and technical modernization; as well as to industry and agriculture implies that the share of resources allocated to the military cannot be increased substantially. China's national defense is still to be modernized by the end of the century. But high resource costs and technical difficulties will mean that an across-theboard modernization program will have to be deferred well into the 1980's if goals in other sectors are to be met. This will not preclude either a rising absolute level of defense expenditure or significant improvements in selected weapons systems, but a systematic modernization program will depend on a more developed industrial sector.

Ironically, debate over the priority to be given to military modernization is most likely to erode the consensus upon which the 10-year plan is based. There is considerable indirect evidence of an important

31 Based on a projected further decline in the rate of natural increase to 1.7 percent by 1980 and to 1.3 percent by 1985. John S. Aird, "Population Growth in the People's Republic of China," Table 2, Intermediate

Model.

debate between those who prefer to postpone military modernization in order to achieve gains in other sectors, particularly agriculture, and those who prefer to allocate more resources to defense and its supporting heavy industries at the expense of agriculture and manufactured consumer goods. Hua's report to the fifth congress, which gave bare mention to modernizing defense, suggest a consensus was finally achieved for deferring military modernization. But this issue is certain to be raised again when the broad goals of the 10-year plan are transformed into more detailed and operational annual economic plans.

Is the economy of the People's Republic of China likely to be substantially influenced by "politics"? That is, does a reading of the record of the past 30 years suggest that future policy conflicts among Chinese over the "proper" allocation of political power among themselves, and over the style of decisionmaking and issue resolution might substantially affect prospects for economic growth? The answer appears to be a resounding "yes; but ***." The qualification is an admission of the failure of both political scientists and economists to sort out the precise relationship between Chinese Communist political structure and style on the one hand, and economic development, on the other. That the two are interdependent cannot be disputed. But answers to questions of cause and effect elude the most meticulous student of both fields. The impact of a succession of political decisions on the dynamics of the economy is generally accepted; but it has proved impossible to link specific economic consequences with specific political decisions.

Though China specialists and U.S. policymakers are far from precision in their understanding of the relationship between politics and the dynamics of the Chinese economy, one key to better understanding and prediction is a recognition of the multiple bases on which China's political alliances are built. Policy arguments are couched in ideological language, and indeed, ideological cleavages are significant ones. Increasingly, however, over the past quarter century, three other sets of cleavages, and patterns of loyalties they engender, have shaped the political process in China: Generational, regional, and bureacratic.

Sometimes, for the individual, these loyalties are mutually reinforcing in support of a policy decision. More often, however, they put the individual under cross pressures; that is, his competing loyalties dictate support for conflicting policies. Factional strength is thus precarious, and can be shifted by skillful appeals to groups under cross pressures.

William W. Whitson is Chief of the Foreign Affairs and National Defense Division, Congressional Research Service.

In consequence carefully built compromises among competing loyalties are destined to be altered as their relative importance changes under the pressure of issues. Though our understanding of this process is still rudimentary, such a mode of analysis can be useful giving shape and a sense of dynamics to the process of economic policymaking in China.

The following pages briefly outline the elements of the four major cleavages that shape patterns of loyalties in Chinese politics-the ideological, the generational, the regional, and the bureaucratic-and then sketch how evolving and shifting coalitions have contributed to cyclic patterns in political power structure and style since 1949. This sets the stage for a review of the most critical domestic and foreign political issues currently confronting the leadership, and finally, an assessment of the potential impact on political stability should the leadership choose to depart from policy directions that seem to have emerged since Mao's death.

POLITICAL LOYALTIES

Generational loyalties are the most difficult to assess. Nevertheless, these form the basis for many "old boy networks," each drawing its strength from a unique history of shared crises and achievements.1 Four distinctive generational groupings deserve attention: pre-World War II; the War Years; the Cultural Revolution; and the postCultural Revolution.

The great majority of the leaders drawn from the pre-World War II years (1922-36) come from the six provinces bordering the Yangtze River. They may, therefore, be called the Southern Revolutionaries. From this group came the "Long Marchers," participants in the epic strategic withdrawal from their fertile but politically hostile homeland to a barren and forbidding loess plateau west of the Yellow River. Men and women who conceived and made a great revolution, these leaders are generalists with long memories and haunting doubts about their legacy to their beloved country. Because most of them are in their seventies, little time remains in which they may place the permanent stamp of their vision, their waning energy, and their enormous experience in China. Most of the central Peking leadership, including the Deputy Premier, Teng Hsiao-p'ing, the new Minister of Defense, Hsu Hsiang-ch'ien, the President of the National People's Congress and former Defense Minister, Yeh Chien-ying, the most of the 11 military regional commanders and chairmen of provincial revolutionary committees belong to this generation. Their influence is still decisive; but their losses in 1976 (e.g., Chou En-Lai, Mao Tse-Tung, Chu Te, Kang Sheng and Tung Pi-Wu) warned them that time is running out.

The great majority of the important leaders drawn from 16 continous "war years" (Sino-Japanese War, Civil War, and Korean war: 1937-53) come from provinces north of the Yellow River. They may, therefore, be called the Northern Warriors. Like the Southern Revolutionaries, they formed strong factional ties, forged in battle, death, and great victory. Generally better educated than the older group, more inclined to specialization and professionalism, many of these people came from conservative middle-class families and joined

For a more detailed analysis of generations in China's elite, see William W. Whitson, "The Chinese High Command" (New York, Praeger, 1973), ch. 9.

the cause of the nation, not of communism, when a foreign enemy threatened. In many ways less regionally parochial, more technically qualified, and even more patriotic than the older generation, this generation now manages most of the ministries, the top staffs of the military establishment and the key operating units of the People's Liberation Army. The new Premier, Hua Kuo-feng, is a member of this northern warrior group. Now in their late fifties and early sixties, they focus their energies on the management of the present rather than either the atonement of the past or the judgement of history.

The "Cultural Revolution generation" is composed of young men and women who entered the political arena after 1953 and dared to believe and adopt the idealism of the older generations, especially the Southern Revolutionaries who had written extensively about the spirit of the revolution when few resources other than esprit had been available. Drawn from all over China, and inspired to dedicate themselves to a new China, these young men and women might be called the Nation Builders. Turning away from classicists and the traditions of Chinese education and the traditional measures of worth in China, for 16 years the nation builders moved out of the cities and the farms of central China to the borders. Armed with Mao's thoughts, they largely succeeded in imposing a pervasive network of party and government systems and procedures on 800 million people. While increasingly conscious of "China" as a nation-state, this generation makes the machinery of China's political system work-and sometimes break down. Energetic and idealistic but also increasingly bureaucratic, professional and consumer oriented, they demonstrated their frustrations with both unrealized ideals and their own creaking bureaucracy from 1966 to 1968. At that time, the Great Proletarian Cultural Revolution became an epic watershed, probably the politically climactic period of their lives. Still sorting out the significance of that major social trauma for their generation, they have only limited impact on major decisions; but no major decisions can be carried out without them.

The post-Cultural Revolution generation, entering the political arena after 1969, is comprised of the majority of the population of the country. Only vaguely aware of the sacrifices and dedication of the first two generations, concerned with their own problems of immediate survival, this generation has no role in decisionmaking but can clearly frustrate or help realize the vision and managerial goals of older leaders. They are the grist of China's political mill and are probably less patient than either the Northern Warriors or the Nation Builders for the rewards of the new China. They may therefore be called the Consumer Generation. It will be these young men and women who will heed the call of their elders to fight the future political battles now forming already to challenge the prevailing compromise. Regional loyalties may reinforce or undermine generational loyalties and give geographic focus to China's political system.

The issue is concerned with the power of central authority. Distribution of political power among the center, 11 major military regions and 29 provincial-level revolutionary committees, has fluctuated wildly since 1949. Depending upon the administrative or political issue, the long-term trend until 1976 had been toward delegation of considerable authority to lower-level leaders. That trend has been interrupted periodically by efforts at the center to retrieve control over certain issues. But the complexity of the Chinese political system,