UBC Theses and Dissertations

UBC Theses Logo

UBC Theses and Dissertations

The tentative leap forward : reforms and experiments in basic level Chinese industrial management policies,… Parrish, Geoffrey Leal 1982

Your browser doesn't seem to have a PDF viewer, please download the PDF to view this item.

Item Metadata

Download

Media
831-UBC_1982_A8 P37.pdf [ 3.9MB ]
Metadata
JSON: 831-1.0095257.json
JSON-LD: 831-1.0095257-ld.json
RDF/XML (Pretty): 831-1.0095257-rdf.xml
RDF/JSON: 831-1.0095257-rdf.json
Turtle: 831-1.0095257-turtle.txt
N-Triples: 831-1.0095257-rdf-ntriples.txt
Original Record: 831-1.0095257-source.json
Full Text
831-1.0095257-fulltext.txt
Citation
831-1.0095257.ris

Full Text

THE TENTATIVE LEAP FORWARD: REFORMS AND EXPERIMENTS IN BASIC LEVEL CHINESE INDUSTRIAL MANAGEMENT POLICIES, 1977-1979 by GEOFFREY LEAL PARRISH B.A. , Univers i ty of Oregon, 1981 A THESIS SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS in THE FACULTY OF GRADUATE STUDIES (Department of P o l i t i c a l Science) We accept th is thesis as conforming to the required standard THE UNIVERSITY OF BRITISH COLUMBIA October 1982 Q Geoffrey Leal Pa r r i sh , 1982 In p r e s e n t i n g t h i s t h e s i s i n p a r t i a l f u l f i l m e n t of the requirements f o r an advanced degree at the U n i v e r s i t y o f B r i t i s h Columbia, I agree t h a t the L i b r a r y s h a l l make i t f r e e l y a v a i l a b l e f o r r e f e r e n c e and study. I f u r t h e r agree t h a t p e r m i s s i o n f o r e x t e n s i v e copying of t h i s t h e s i s f o r s c h o l a r l y purposes may be granted by the head of my department or by h i s o r her r e p r e s e n t a t i v e s . I t i s understood t h a t copying or p u b l i c a t i o n of t h i s t h e s i s f o r f i n a n c i a l g a i n s h a l l not be allowed without my w r i t t e n p e r m i s s i o n . Department of P o l i t i c a l Science The U n i v e r s i t y of B r i t i s h Columbia 1956 Main Mall Vancouver, Canada V6T 1Y3 Date O c t . 5 , 1982 DE-6 (3/81) - i i -ABSTRACT T h i s t h e s i s addresses two major t o p i c s . The f i r s t i s the changes i n n a t i o n a l p o l i c y concerning b a s i c l e v e l i n d u s t r i a l management which accompanied the change i n p o l i t i c a l l e a d e r s h i p i n the People's R e p u b l i c of China a f t e r the death of Mao Zedong. T h i s paper examines the nature and extent of such p o l i c y changes a t a n a t i o n a l l e v e l d u r i n g the p e r i o d 1977-1979. Secondly, t h i s paper seeks to i d e n t i f y b a s i c l e v e l i n d u s t r i a l management p o l i c i e s formulated a t a s u b - n a t i o n a l ( g e n e r a l l y p r o v i n c i a l ) l e v e l which d i f f e r e d i n e i t h e r t i m i n g or p o l i c y content from those being promoted n a t i o n a l l y . The primary source of r e f e r e n c e m a t e r i a l f o r t h i s t h e s i s i s the c o m p i l a t i o n s of t r a n s c r i p t i o n s of n a t i o n a l , p r o v i n c i a l , and l o c a l r a d i o broadcasts and announced p e r i o d i c a l a r t i c l e s p u b l i s h e d by the F o r e i g n Broadcast Information S e r v i c e . Approx-imately 750 d a i l y r e p o r t s p u b l i s h e d d u r i n g the years 1977-1979 were examined i n order to compile both accounts of r e l e v a n t p o l i c y changes a t the n a t i o n a l l e v e l and d i s c r e p a n c i e s among p o l i c y d e s c r i p t i o n s and developments at the p r o v i n c i a l and l o c a l l e v e l s . These m a t e r i a l s were supplemented by numerous a r t i c l e s by o u t s i d e o b s e r v e r s , i n order to p r o v i d e a d d i t i o n a l i n f o r m a t i o n and a broader p e r s p e c t i v e than t h a t o f f e r e d by the Chinese government-originated m a t e r i a l . The paper i d e n t i f i e s two d i s t i n c t c a t e g o r i e s - o r g a n i z a t i o n a l reforms and the r e i n t r o d u c t i o n of m a t e r i a l i n c e n t i v e s - of major - i i i -c h a n g e s i n t h e p o l i c i e s o f management o f i n d i v i d u a l s , c o l l e c t i v e s , a n d i n d u s t r i e s d u r i n g t h i s p e r i o d , i n o r d e r t o improve p r o d u c -t i v i t y . D e t a i l s o f t h e e v o l u t i o n o f t h e s e p o l i c i e s and t h e i r p r e s e n t a t i o n i n t h e C h i n e s e media a r e g i v e n . The p a p e r t h e n e x a m i n e s v a r i a t i o n s i n t h e s e p o l i c i e s among d i f f e r e n t p r o v i n c e s and a r e a s , and i d e n t i f i e s t h r e e a r e a s - S i c h u a n p r o v i n c e , Guang-dong p r o v i n c e , and t h e m a j o r c i t i e s o f S h a n g h a i , B e i j i n g , and T i a n j i n - where r e f o r m s t e n d e d t o be more p r o g r e s s i v e t h a n i n t h e c o u n t r y a t l a r g e and m i g h t s e r v e as models o r e x p e r i m e n t s i n new p o l i c i e s b e i n g c o n s i d e r e d f o r n a t i o n a l a d o p t i o n . F i n a l l y , m a n a g e r i a l p o l i c i e s p r o m u l g a t e d d u r i n g t h i s t i m e a r e r e v i e w e d and a n a l y z e d f o r t h e i r a b i l i t y t o meet t h e nee d s o f t h e r a p i d i n d u s t r i a l i z a t i o n d e s i r e d by C h i n e s e l e a d e r s h i p . T h r e e p o t e n t i a l d i f f i c u l t i e s a r e i d e n t i f i e d : t h e p o l i t i c a l o p p o s i t i o n o f some f a c t i o n s t o new o r b r o a d e r r e f o r m s ; p r o b l e m s i n t h e r e c o n c i l i a t i o n o f a g r e a t e r r o l e f o r m a r k e t f o r c e s w i t h t h e n e e d s o f a c e n t r a l i z e d , p l a n n e d economy; a n d t h e d i f f i c u l t y i n a d a p t i n g o r r e v i s i n g t h e p r e s e n t s t r a t e g y t o accommodate c h a n g i n g o r u n e x p e c t e d c i r c u m s t a n c e s . - i v -CONTENTS Introduction 1 Industrial Management Problems - 1 9 7 7 . . . . . . . . . 3 National Policy 1977-1979 8 Variations on a Theme 28 Conclusion. . . 43 Footnotes. 53 Bibliography . .59 I . INTRODUCTION The y e a r 1976 was, a s t h e C h i n e s e m edia was f o n d o f r e p e a t i n g , an e x t r a o r d i n a r y one f o r t h e P e o p l e ' s R e p u b l i c o f C h i n a , W i t h i n t h a t y e a r , t h r e e o f C h i n a ' s g r e a t r e v o l u t i o n a r y l e a d e r s - Mao Zedong, Zhou E n l a i , and Zhu De - d i e d ; one o f t h e d e a d l i e s t e a r t h q u a k e s i n r e c o r d e d h i s t o r y d e v a s t a t e d p a r t s o f N o r t h C h i n a , k i l l i n g p e r h a p s 800,000; an d t h e s t r u g g l e , f o r p o l i t i c a l s u c c e s s i o n , o p e n l y e r u p t i n g upon Mao's imminent d e a t h , r e s u l t e d i n t h e o u s t e r o f t h e l e f t i s t Gang o f P o u r and t h e b e g i n n i n g o f a d r i f t t o w a r d l e s s r a d i c a l e c o n o m i c d e v e l o p m e n t p o l i c i e s . The v a s t n e s s o f C h i n a ' s economy i t s e l f p r e c l u d e s r a p i d and d r a m a t i c c h a n g e s . The post-Mao l e a d e r s h i p was f u r t h e r c o n s t r a i n e d i n i t s d e s i r e s f o r r e f o r m by t h e n e c e s s i t i e s o f c o n t i n u i n g p o l i t i c a l gamesmanship and power consolidation. Policy changes in the following years, while a graphic departure from the recent past, were s t i l l more tentative and isolated than many might have liked. Nonetheless, important shifts occurred in Chinese economic developmental policy in the years 1977-1979. Beginning with the consolidation of power in early 1977 by the new leadership, the reliance of the previous ten years upon capital construction and ideological correctness as means of development gradually f e l l into disfavour. Renewed emphasis was instead placed upon the reintroduetion of material incentives and the stressing of organizational efficiency, based upon policies pursued prior to the onset of the Great Proletarian Cultural Revolution in the mid-1960*s. By late 1979 policy changes or experimental ventures were in place which have largely formed the base for Chinese policy to date. This paper will.focus specifically upon post-Mao changes in managerial policies in one sector of the Chinese economy: basic level industrial production. This sector is crucial, not only in China's efforts to become a f u l l y modern, industrialized country by the end of the century, but also in examining the possible usefulness or appropriateness of current and future general developmental policy. The paper i s divided into four sections: an overview of China's industrial managerial problems at Mie start of 1977; an examination of industrial management and income distribution policy changes in the period 1,977-1979; a description of local experiments and variations upon national - 3 -policy, including experiments which might serve as models or preludes to future national policy; and a concluding section examining the limitations and future developmental potential of policies described. II. INDUSTRIAL MANAGEMENT PROBLEMS -.1977 The most basic requirement of China's economy is that i t be able to feed i t s b i l l i o n people. At the start of 1977f this task was the nearly exclusive propaganda focus of China's efforts to increase production. Standard exhortations were to take agri-culture as the key link in the development of the national economy; that development efforts were to be. directed to agriculture f i r s t , light industry second, and heavy industry third; and that the -i primary purpose of industry should be to serve agriculture. Within industry, emphasis was l a i d upon products necessary in agriculture, such as chemical f e r t i l i z e r s , farm tools, and machinery. These industries were, in turn, handicapped by inadequate iron and steel production, coal extraction, and transportation. Iron, steel, and coal production a l l f e l l in 1976, and were acknowledged at the start of 1977 to be weak links in the industrial chain. Massive publicity campaigns to improve efficiency and reduce waste in transportation, generation and consumption of e l e c t r i c i t y , and production of iron, steel, and coal emphasized the need for improvement in these areas as v i t a l to the growth of industry in 2 general. The coal industry, responsible for 10% of China's energy - 4 -p r o d u c t i o n , was p a r t i c u l a r l y weak; l e s s than o n e - t h i r d of the i n d u s t r y was mechanized, many d e p o s i t s were of low q u a l i t y , and most high-grade d e p o s i t s were concentrated i n the n o r t h . T h i s r e g i o n a l c o n c e n t r a t i o n i n turn p l a c e d pressure upon an over-burdened and inadequate t r a n s p o r t a t i o n s t r u c t u r e ; 40% of a l l Chinese r a i l r o a d cargo was c o a l . The a d d i t i o n a l inadequacy of h y d r o e l e c t r i c a l f a c i l i t i e s combined to produce c h r o n i c power shortages, which were a major c o n s t r a i n t upon i n d u s t r i a l c a p a c i t y 3 and f u t u r e expansion. P o l i c i e s of the p r e v i o u s Chinese l e a d e r s h i p had a l s o l e f t c o n s t r a i n t s upon p o t e n t i a l i n d u s t r i a l growth. The p o l i t i c a l t u r m o i l , not only of the 1975-1976 power s t r u g g l e but of the p r e v i o u s ten y ears d a t i n g to the beginning of the C u l t u r a l R e v o l u t i o n , had taken i t s t o l l . In t h a t p e r i o d management, o r g a n i z a t i o n a l , and p r o d u c t i o n p o l i c y and l e a d e r s h i p were s e l e c t e d l a r g e l y on the b a s i s of p o l i t i c a l c o r r e c t n e s s r a t h e r than t h e i r c o n t r i b u t i o n s to g r e a t e r economic development. T h i s encouraged the promotion of p o l i c y and of decision-makers emphasizing i d e o l o g i c a l p o l i c y content, o f t e n a t the expense of economic r a t i o n a l i t y . The h e r i t a g e was a p l e t h o r a of managerial d i f f i c u l t i e s i n i n d u s t r y , a shortage of t r a i n e d managerial . manpower, and a c l a s s of cadres and managers who, promoted and empowered under the g u i d e l i n e s of the C u l t u r a l R e v o l u t i o n , were disadvantaged by reform e f f o r t s and formed a major base of p o l i t i c a l power, patronage, and p o t e n t i a l o p p o s i t i o n . A number of o r g a n i z a t i o n a l and p l a n n i n g d i f f i c u l t i e s hampered i n d u s t r i a l p r o d u c t i v i t y . P r i o r p o l i c y , through much o f t h e PRC's h i s t o r y , had e m p h a s i z e d t h e e q u a l d e v e l o p m e n t o f i n d u s t r y t h r o u g h a l l p r o v i n c e s . E m p h a s i s upon l o c a l s e l f -r e l i a n c e e n c o u r a g e d t h e p r o l i f e r a t i o n o f s m a l l p l a n t s , e a c h e q u i p p e d t o m a n u f a c t u r e a v a r i e t y o f p r o d u c t s . I n d u s t r i a l f a c i l i t i e s were t h u s n e e d l e s s l y d u p l i c a t e d t h r o u g h many p r o v i n c e s , a n d e s t a b l i s h e d w i t h l i t t l e r e g a r d t o p r o x i m i t y and a v a i l a b i l i t y o f e i t h e r raw m a t e r i a l s o r m a r k e t s . S p e c i f i c l o c a l i n d u s t r i e s were u n d u l y a f f e c t e d by s m a l l p r o d u c t i o n v a r i a t i o n s i n raw m a t e r i a l s s u p p l i e d by o t h e r l o c a l i n d u s t r i e s ; t h e s m a l l s c a l e and v a r i e t y o f p r o d u c t s one p l a n t m i g h t be r e s p o n s i b l e f o r a l s o r e s u l t e d i n u n d e r - u t i l i z a t i o n o f © e q u i p m e n t . The l a r g e number o f d i f f e r e n t s i t e s i n C h i n a m a n u f a c t u r i n g t h e same p r o d u c t made s t a n d a r d i z a t i o n o f any one p r o d u c t v i r t u a l l y i m p o s s i b l e . S i m i l a r g oods f r o m d i f f e r e n t r e g i o n s , p r o v i n c e s , o r e v e n c o u n t i e s were o f t e n n o t i n t e r c h a n g a b l e , m a k i n g t h e r e p a i r o r r e p l a c e m e n t o f machine p a r t s an u n n e c e s s a r y c h a l l e n g e . E x c e s s i v e d u p l i c a t i o n and l a c k o f s t a n d a r d i z a t i o n i n m a n u f a c t u r i n g e f f o r t s were a l s o e n c o u r a g e d by a h i g h d e g r e e o f v e r t i c a l i n t e g r a t i o n i n t h e p l a n n i n g o f o u t p u t . P l a n n i n g e f f o r t s were c o o r d i n a t e d by a d m i n i s t r a t i v e r e g i o n r a t h e r t h a n by p r o d u c t ; t h u s , t a r g e t s were o f t e n d e t e r m i n e d w i t h l i t t l e o r no r e f e r e n c e t o c o o r d i n a t i o n w i t h s i m i l a r e n t e r p r i s e s u n d e r d i f f e r e n t a u t h o r i t y . G e o g r a p h i c i s o l a t i o n i n p l a n n i n g and t h e p u s h f o r l o c a l s e l f - r e l i a n c e a l s o r e s u l t e d i n c h r o n i c p r o b l e m s o f s t o c k p i l i n g and l a r g e i n v e n t o r i e s . To l o c a l m anagers, t h e s e i n v e n t o r i e s r e p r e s e n t e d s e c u r e s u p p l i e s i n t h e e v e n t o f b o t t l e n e c k s i n t h e p r o d u c t i o n o f raw m a t e r i a l s o r s u p p l y t o c o n s u m e r s ; t h i s was - 6 -seen as more d e s i r a b l e than dependence upon u n c e r t a i n s u p p l i e s from o u t s i d e the l o c a l a r e a . The p r i o r emphasis upon l o c a l r a t h e r than p r o v i n c i a l or r e g i o n a l s e l f - s u f f i c i e n c y i n an i n d u s t r y meant t h a t managers were l o a t h e to count upon m a t e r i a l imports from other a r e a s , and i n t u r n tended to view t h e i r primary o b l i g a t i o n as f u l f i l l i n g the needs of t h e i r l o c a l markets, r e g a r d l e s s of the economic i n e f f i c i e n c i e s i n v o l v e d . The l a r g e i n v e n t o r i e s kept a l s o served as a p r o t e c t i o n a g a i n s t sudden r e v i s i o n s i n output t a r g e t s . The l a c k of u s e f u l c o n t a c t between product d e s i g n e r s , producers, and consumers o f t e n l e d to i n s u f f i c i e n t awareness of producer or consumer needs,, and t h e r e f o r e . p r o d u c t i o n b o t t l e -necks and sudden p l a n n i n g changes. In s h o r t , the p l a n n i n g of output t a r g e t s f o r l o c a l i n d u s t r i e s o f t e n was conducted without proper c o n s i d e r a t i o n of l a r g e r r e g i o n a l or n a t i o n a l needs, or the needs of r e l a t e d l o c a l i n d u s t r i e s . O v e r l a p p i n g p l a n n i n g a u t h o r i t y between n a t i o n a l , p r o v i n c i a l , and l o c a l o f f i c i a l s compounded the c o n f u s i o n and i n e f f i c i e n c y . Another s e t of managerial problems r e l a t e d to the l i m i t e d a u t h o r i t y and m o t i v a t i o n f o r independent a c t i o n g i v e n l o c a l p l a n t managers. With the performance of managers judged indepen-d e n t l y of the performance of areas under t h e i r a u t h o r i t y , there was no p a r t i c u l a r reason f o r managers to attempt i n n o v a t i v e (and p o s s i b l y p o l i t i c a l l y dangerous) reforms to Improve e f f i c i e n c y or p r o d u c t i v i t y . To the extent t h a t p l a n t p r o d u c t i v i t y was c o n s i d -ered, the emphasis upon l o c a l p l a n n i n g and the meeting of l o c a l output t a r g e t s o f t e n worked a g a i n s t the l a r g e r p r o d u c t i v i t y of t h e i n d u s t r y ( f o r example, t h e r e c u r r e n t s t o c k p i l i n g o f i n v e n t o r y was r a t i o n a l t o a l o c a l manager b u t i n e f f i c i e n t on a l a r g e r s c a l e ) . M a n a g e r i a l i n p u t i n t o t h e p l a n n i n g p r o c e s s was a l s o l i m i t e d . P l a n t i n f l u e n c e upon t h e f u t u r e p r o d u c t i o n l e v e l s e x p e c t e d o f i t was o f t e n c o n f i n e d t o t h e s l a c k i n g o f f o f p r o d u c t i o n , a n d o v e r -c o n s u m p t i o n o f raw m a t e r i a l s , a t t h e end o f t h e a n n u a l f i s c a l c y c l e , so t h a t f u t u r e a l l o c a t i o n s ( b a s e d upon a n n u a l c o n s u m p t i o n and p r o d u c t i o n f i g u r e s ) w o u l d i n c l u d e a d e q u a t e raw m a t e r i a l s and m i n i m i z e f u t u r e r e q u i r e d p r o d u c t i o n i n c r e a s e s . L o c a l i n i t i a t i v e s were made more d i f f i c u l t by t h e " t h r e e - i n - o n e " s y s t e m o f j o i n t p l a n t management by w o r k e r s , c a d r e s , and managers, an d t h e r e s u l t i n g p o l i t i c i z a t i o n o f management d e c i s i o n s . The p o l i t i c a l s t r u g g l e s o f 1975-1976 were t h u s d i r e c t l y c a r r i e d i n t o l o c a l i n d u s t r i a l management, d i s r u p t i n g a t t i m e s b o t h p l a n t management and p r o d u c t i o n . M o t i v a t i o n o f p l a n t w o r k e r s was d e p e n d a n t upon a p p e a l s t o s o c i a l i s t m o r a l i t y , and l a c k o f d i s c i p l i n e among p l a n t w o r k e r s was a s e r i o u s p r o b l e m . The l e g a c y o f t h i s p o l i t i -c i z a t i o n was a r e l u c t a n c e by managers t o embrace t h e p o s t - M a o r e f o r m s w h i c h began i n 1977, f e a r i n g them t o be y e t a n o t h e r s h o r t - l i v e d p o l i t i c a l movement w h i c h w o u l d do more t o d i s r u p t t h a n t o i n c r e a s e l o n g - t e r m p r o d u c t i o n . The low p r o d u c t i v i t y o f C h i n e s e i n d u s t r y , an o u t g r o w t h o f p l a n n i n g a n d o r g a n i z a t i o n a l p r o b l e m s , was compounded by s y s t e m -a t i c i n v e s t m e n t i n new f a c i l i t i e s a s t h e p r i m a r y method o f i n c r e a s i n g o u t p u t t o t a l s . An u n u s u a l l y h i g h i n v e s t m e n t r a t i o o f c a p i t a l e x p e n d i t u r e s t o o u t p u t , e s p e c i a l l y i n h e a v y i n d u s t r y , r e i n f o r c e d p r o d u c t i v i t y i n a d e q u a c i e s . M o r e o v e r , t h e p l a n n i n g o f s u c h f a c i l i t i e s o f t e n s u f f e r e d f r o m t h e same s h o r t - s i g h t e d n e s s and r e g i o n a l i s m as t h e p r o d u c t i o n p l a n n i n g f o r e x i s t i n g i n d u s t r i e s a n d f a c i l i t i e s . I I I . NATIONAL POLICY 1977-1979 The i n a d e q u a t e c a p a c i t y o f i n f r a s t r u c t u r a l i n d u s t r i e s , and t h e b a r r i e r i t p o s e d t o i n d u s t r i a l g r o w t h , was r e c o g n i z e d a n d r e f l e c t e d i n t h e Ten Y e a r P l a n f o r 1976-1985, r e l e a s e d e a r l y i n 1978. Most o f t h e p l a n n e d c a p i t a l c o n s t r u c t i o n ( l a r g e l y t o be f i n a n c e d by t h e i m p o r t o f f o r e i g n c a p i t a l ) was i n t h e i n f r a -s t r u c t u r a l s e c t o r . 95% o f o v e r a l l i n d u s t r i a l c a p i t a l i n v e s t m e n t was t o be i n heavy i n d u s t r y , and o n l y 5% i n l i g h t i n d u s t r y . ^ The c o n s t r u c t i o n g o a l s p r o v e d t o be o v e r a m b i t i o u s , and t o o r e l i a n t upon a few l a r g e s c a l e p r o j e c t s d e p e n d i n g upon s u f f i c i e n t f o r e i g n c u r r e n c y exchange f o r t h e i r c o m p l e t i o n . T h u s , i n e a r l y 1979 t h e g o a l s o f t h e Ten Y e a r P l a n were r e v i s e d downward. L a r g e c a p i t a l c o n s t r u c t i o n p r o j e c t s were p o s t p o n e d ; t h e r e v i s i o n i n c l u d e d c u r t a i l m e n t o f f o r e i g n p u r c h a s e s d i r e c t e d t o w a r d l a r g e -s c a l e i n f r a s t r u c t u r e p r o j e c t s . I n i t s p l a c e was a r e e m p h a s i s upon l i g h t i n d u s t r i a l d e v e l o p m e n t , a t t h e e x p e n s e o f f u n d s f o r h e a v y i n d u s t r y , i n o r d e r t o g e n e r a t e a d d i t i o n a l f o r e i g n exchange t h r o u g h e x p o r t s . By t h e s e c o n d s e s s i o n o f t h e f i f t h N a t i o n a l P e o p l e ' s C o n g r e s s i n May 1979, C h a i r m a n Hua a c k n o w l e d g e d t h a t f o r t h e f o l l o w i n g y e a r s C h i n a w o u l d have t o r e l y upon i t s e x i s t i n g i n d u s t r i a l f a c i l i t i e s i n i t s e f f o r t s t o a c h i e v e g r o w t h and - 9 -m o d e r n i z a t i o n . B e i n g u n a b l e t o expand i t s f a c i l i t i e s , t h e s t a t e w o u l d have t o depend a l m o s t w h o l l y upon e f f o r t s t o i n c r e a s e 5 p r o d u c t i v i t y i n e x i s t i n g e n t e r p r i s e s . A t t h e s t a r t o f 1977, e f f o r t s t o i n c r e a s e p r o d u c t i v i t y were c e n t r e d a b o u t a d r i v e t o e m u l a t e t h e n a t i o n a l model o f D a q i n g , a l a r g e o i l - p r o d u c i n g complex i n L i a o n i n g p r o v i n c e . The p r o c e s s o f l e a r n i n g f r o m D a q i n g p l a c e d e m p h a s i s upon c o r r e c t p o l i t i c a l i d e o l o g y , c a d r e s a n d w o r k e r s who were Red b e f o r e e x p e r t , a n d d e t e r m i n a t i o n t o i n c r e a s e p r o d u c t i o n a s t h e k e y s t o i n d u s t r i a l a c h i e v e m e n t . A n o t h e r m o d e l , t h e c o n s t i t u t i o n o f t h e Anshan I r o n a n d S t e e l p l a n t , a l s o e m p h a s i z e d p o l i t i c a l e d u c a t i o n and e g a l i -t a r i a n i s m i n o r g a n i z a t i o n a l and wage p o l i c i e s . O v e r t h e f o l l o w i n g t h r e e y e a r s , t h e s e p o l i c i e s u n d e r w e n t f u n d a m e n t a l r e v i s i o n s . By t h e t i m e o f t h e s e c o n d s e s s i o n o f t h e f i f t h NPC i n 1979, An s h a n was b u t a g h o s t o f models p a s t . W h i l e t h e d r i v e t o l e a r n f r o m D a q i n g was s t i l l a c k n o w l e d g e d , t h e i t e m s t o be l e a r n e d had e i t h e r been d e e m p h a s i z e d o r r e v e r s e d . The newly p o p u l a r i z e d s l o g a n was a d e c i d e d d e p a r t u r e f r o m t h e o l d : " P r a c t i c e i s t h e s o l e c r i t e r i o n o f t r u t h . " 6 Among Hua's i n i t i a l e f f o r t s a f t e r t h e d o w n f a l l o f t h e Gang o f F o u r was t o promote p o l i c y s t a b i l i t y i n t h e i n d u s t r i a l s e c t o r . The d e f e n s e o f " r a t i o n a l r u l e s and r e g u l a t i o n s " and t h e g r a d u a l r e s t o r a t i o n o f m a n a g e r i a l e x p e r t i s e a s a p o l i c y g u i d e s u p p l e m e n t a l t o i d e o l o g i c a l c o r r e c t n e s s were i n t e n d e d t o enhance t h e new r e g i m e ' s p o l i t i c a l s t a b i l i t y a t t h e exp e n s e o f p a s t r a d i c a l p o l i c i e s . The aim was t o end t h e d e l i b e r a t e l y i n d u c e d " c o n t i n u i n g r e v o l u t i o n " o f p o l i t i c a l ( a n d e c o n o m i c ) i n s t a b i l i t y t h a t had marked t h e p r e v i o u s e l e v e n y e a r s , and p r o v i d e r e a s s u r a n c e s o f t h e permanence o f new p o l i c y . A campaign was mounted t o combat e n d l e s s m e e t i n g s , p o l i t i c a l f o r u m s , a n d b u r e a u c r a t i c d e l a y s . R e d u c e d h o u r s o f p o l i t i c a l s t u d y i n f a c t o r i e s s e r v e d t o c o n c e n -t r a t e more w o r k i n g h o u r s upon p r o d u c t i o n t a s k s and t o d e e m p h a s i z e i d e o l o g y a s a p r e r e q u i s i t e f o r p r o d u c t i o n . By 1979 c a l l s s u r f a c e d 7 f o r t h e c o m p l e t e a b o l i t i o n o f e n t e r p r i s e p o l i t i c a l d e p a r t m e n t s . C a d r e s , managers, and w o r k e r s , h a v i n g s u r v i v e d t h e t u m u l t u o u s C u l t u r a l R e v o l u t i o n , were c a u t i o u s t o embrace new r e f o r m s l e s t t h e y be r e p u d i a t e d a t some f u t u r e d a t e . T h u s , t h r o u g h o u t t h e p e r i o d 1977-1979, even as p o l i c i e s c o n t i n u e d t o change and e v o l v e , b r o a d c a s t s r e p e a t e d l y t r u m p e t e d t h e permanence and c o n t i n u i t y o f c u r r e n t and f u t u r e e d i c t s . C r e d i b i l i t y i n k e e p i n g s u c h p r o m i s e s was ( a n d r e m a i n s ) a c r u c i a l f a c t o r i n g e n e r a t i n g t h e n e c e s s a r y t r u s t and e n t h u s i a s m t o i m p l e m e n t r e f o r m s and t o s t r i v e f o r s t i l l g r e a t e r p r o d u c t i o n a c h i e v e m e n t s . M a n a g e r i a l p o l i c y c h a n g e s i m p l e m e n t e d d u r i n g t h e p e r i o d 1977-1979 had two m a j o r g o a l s w h i c h , i t was hoped, w o u l d r a i s e t h e p r o d u c t i v i t y o f e x i s t i n g e n t e r p r i s e s . T h e s e were: 1) o r g a n -i z a t i o n a l r e f o r m s , meant t o s t r e a m l i n e and i n c r e a s e t h e e f f i c i e n c y o f p l a n n i n g , f a c t o r y a d m i n i s t r a t i o n , a n d o p e r a t i o n s between a n d w i t h i n p l a n t s , l o c a l e s , and i n d u s t r i e s ; and 2) m a t e r i a l i n c e n t i v e s , d e s i g n e d t o h e i g h t e n e n t h u s i a s m and ( t h e r e f o r e ) p r o d u c t i v i t y among w o r k e r s and t h e i r c o l l e c t i v i t i e s . The i d e a l s o f d e c e n t r a l i z a t i o n and s e l f - r e l i a n c e , e m p l o y e d d u r i n g p r e v i o u s y e a r s i n t h e p r o m o t i o n o f a g r i c u l t u r a l m e c h a n i -z a t i o n and t h e m a n u f a c t u r e o f f a r m m a c h i n e r y , had l e d t o numerous major organizational problems. With the priority given to agricultural mechanization in the national developmental effort, the machine-building industry was the f i r s t to undergo massive organizational reforms on a regional and national scale. Calls began in early 1978 within the machine-building industry for the active promotion of greater plant specialization. This was cited as having advantages of the use of fewer machines, less frequent retooling, greater ease in training operators, longer machine l i f e , and easier standardization within factories o and among related ones. A month-long national mechanization conference in January 1978 cited the favourable example in Shandong of implementing responsibility among different plants for the manufacture of different, coordinated items on a centrally q planned mass scale. Vice Premier Yu Qiuli's report at that conference, touting "unified planning*" included several notable demands: 1) making the various types of machinery simple, standardized, serialized, and multipurpose; 2) employing "specialized cooperation" on a provincial, regional, or national basis by encouraging small plants to manufacture single, specified types of goods in coordination with larger plants producing a variety of items on a mass scale; 3) promoting in production management the "five fixes" of fixed orientation for products and scale of production; fixed personnel and organization; fixed consumption quotas and sources of supply for raw materials and fuel; fixed assets and circulating funds; and fixed cooperative relationships"; 4) with the recognition of inferior quality products as "a prevalent problem," having s t r i c t e r q u a l i t y c o n t r o l and implementing r e g u l a t i o n s t o d i s c o u n t products o f unacceptable q u a l i t y from c r e d i t e d p r o d u c t i o n t o t a l s ; and 5) c o o r d i n a t i n g p r o d u c t i o n of complete s e t s of farm machinery, i n c l u d i n g spare p a r t s , to be 10 made a v a i l a b l e to consumers. By l a t e 1978, much of the farm machinery i n d u s t r y had i n f a c t been r e o r g a n i z e d to implement s p e c i a l i z a t i o n and c o o r d i n a -t i o n by "1) S e t t i n g up s p e c i a l i z e d companies or g e n e r a l f a c t o r i e s to end o v e r l a p p i n g l e a d e r s h i p and d i f f u s e management; 2) Regroup-i n g f a c t o r i e s a c c o r d i n g to the types of products they produce; and 3) Undertaking t e c h n i c a l r e f o r m a t i o n to r a i s e the t e c h n i c a l 11 l e v e l of products needed i n l a r g e q u a n t i t i e s . " These a c t i o n s r e s u l t e d i n " s m a l l , l o c a l l y managed p l a n t s absorbed i n t o l o c a l or r e g i o n a l networks f e a t u r i n g l a r g e - s c a l e s p e c i a l i z e d p r o d u c t i o n 1 2 and assembly." The Daqing model of l o c a l s e l f - s u f f i c i e n c y was thus abandoned even while the c a l l s to l e a r n from Daqing were s t i l l i n t a c t . C a l l s f o r g r e a t e r c o o r d i n a t i o n i n p l a n n i n g w i t h i n i n d u s t r i e s , and among r e l a t e d ones, f o l l o w e d i n other i n d u s t r i a l areas. The campaign c r i t i c i z e d the use of " a d m i n i s t r a t i v e boundaries of l o c a l government as b a s i c u n i t s f o r i n t e g r a t i n g supply r e l a t i o n -1 3 s h i p s among e n t e r p r i s e s and between s e c t o r s i n a l o c a l i t y , " c a l l i n g i n s t e a d f o r u n i f i e d , i n t e r p r o v i n c i a l p l a n n i n g and g r e a t e r producer-consumer, c o n t a c t i n a l l i n d u s t r i e s . ^ F u r t h e r campaigns began to encourage c o o r d i n a t e d p l a n n i n g a c r o s s p r e f e c t u r a l and county a d m i n i s t r a t i v e boundaries as w e l l . - 13 -At the same time, steps were being taken to f a c i l i t a t e more centralized, coordinated planning. Without fanfare, the May 1977 national Learning from Daqing conference restored the use of six large economic regions as an interim (between provin-c i a l and national) level of economic planning. The regions were to f a c i l i t a t e a greater coordination of production efforts in a l l industries between neighbouring^ provinces, in an effort to reduce waste and duplication. By May 1978, reports appeared of these regions having spawned "regional economic planning forums" for such purposes. The practice of designating key industries and enterprises had been revived as well, to assist the regions in correctly assigning priority to and implementing new reforms. J As a further effort to avoid bottlenecks, combat i l l i c i t stockpiling, and plan more effectively, formal contracts were instituted between factories supplying each other with goods. Rather than the informal arrangements that had previously charac-terized such dealings, supplies were to be arranged and contracted for in advance and incorporated into the state plans specifying 16 the allocations of raw materials given to individual plants. Nevertheless, tremendous d i f f i c u l t i e s remained in gaining increased productivity through planning and organizational reforms among industries. Inertia and empire-building among overlapping and interlocking bureaucracies continued to hamper efforts to coordinate planning. The dependence upon set annual quotas (a later target of reform), which must be met at the end of the year, l e f t individual plants suspicious of state planning - 14 -and prone to stockpile raw materials in order to avoid suffering during the inevitable year-end rushes and bottlenecks. The annual year-end production surge, then, would come at the expense of production during the remainder of the year. Allegations also appeared that such bottlenecks were the result of i l l i c i t , extra-17 legal sales of supplies for the personal gain of managers. China's efforts to maximize production in a given industry have also been hampered by the conflicting goal of bringing industry and modernization to relatively unindustrialized areas of the country. Such regional investment has often been at the cost of loss of proximity to raw materials and dependence upon an inadequate and overworked transportation system. Moreover, provinces and lower levels of administration had incentives to promote local industry even i f i t was uneconomic and detracted from the larger national effort; the taxes generated by even inefficient enterprises represented additional revenue to the state, the jobs created were attractive items for p o l i t i c a l patronage, and the items produced represented secure local sources of supplies for other industries and consumers rather 18 than less dependably available imports. Thus industries were forced to combat tendencies toward production scattered and duplicated within and among provinces without relation to location to either raw materials or markets. Similar structural inefficiencies, such as overlapping departmental authorities and a lack of centralized planning, also became targets for intra-plant reform during 1978. The employment of professionalism and managerial expertise to increase local productivity was once again hailed as desirable. Campaigns developed to streamline plant bureaucracies, minimize the incessant holding of p o l i t i c a l meetings which cut into productive work time, and reassign "non-productive" administrative labour to more directly productive jobs. By the time of the f i f t h NPC's f i r s t session in March 1978, calls emerged for the abolition of the p o l i t i c a l l y oriented Revolutionary Committees. The Revolu-tionary Committees controlled and managed plants during the Cultural Revolution, and gave workers and party cadres substantial direct roles in factory management. They were to be replaced by professional factory management committees acting under the leadership of the local party committees, with managers taking direct individual responsibility for their factory's performance, and their assistants likewise for specific areas within the factory. Managers' authority to oversee production, enforce discipline, and negotiate external contracts was also increased, 1 9/ and the access of workers to plant management severely reduced., J The calls for managerial efficiency and accountability continued throughout 1978-1979, with the rallying cry of "practice is the sole criterion of truth." By early 1979, broadcasts and articles were not only admitting interest in the experiences of other socialist countries, such as Yugoslavia and Rumania, but were also scrutinizing such managerial techniques as specialized cooperation within and among plants, high wages as incentives to productivity, management training programmes, and quality control - 16 -programmes, imported from such capitalist countries as Japan and 20 the United States. Some areas also began promotion in 1979 of contracts between separate divisions within a given factory. These were intended, much as contracts between enterprises had been, to insure the steady and regulated flow of materials from 21 one department to another. In mid-1978, the Chinese government initiated a step to increase productivity by encouraging local plants to search out qualified personnel with prior, specialized training, and insure that they were working at jobs f u l l y employing their s k i l l s . Many areas were suffering a shortage of properly trained manpower, due to the emphasis upon p o l i t i c a l education during the Cultural Revolution and the reassignment during that period of many trained workers to unskilled or irrelevant jobs; i t was hoped that the reassignment of these "hidden" skilled workers and managers would help address the lack of trained workers, help in the training of new workers, and increase managerial efficiency. However, this directive was also partially ensnared in bureaucratic obstructions, such as current units that did not want to surrender efficient workers, workers not wanting parti-cular assignments, p o l i t i c a l patronage, and competition for choice reassignments. Nearly two years later, implementation was s t i l l proceeding slowly; an early 1980 Guangdong broadcast complains of transfer delays because "their present units w i l l not let them go...units to which they should be transferred - 17 -stress that i t w i l l not be easy to solve the problem of registered, permanent residence, or else are unwilling to accept them on the ground that there i s no housing available. Some (cadres) are unwilling to go because they do not like the new units or their 22 locations." Another step to improve the technical efficiency of plant workers was the 1977 reemphasis upon July 21 schools. These on-site "schools" were similar to p o l i t i c a l schools established during the GPGR, but were to be used for an opposite purpose: the provision of rapid, job-oriented technical training accom-panied by a minimum of p o l i t i c a l study. Labour recruitment procedures were also revised, with the reinstitution in many places of merit examinations to replace p o l i t i c a l favoritism and nepotism as methods to determine promotions and the hiring 23 of new workers. Despite these efforts, there were s t i l l problems of overstaffing and inadequately trained workers. In particular, the shortage of existing trained personnel and the need to train workers rendered overstaffing problems virtually insoluable; managers capable of resolving such manning situations OA were more urgently needed for other tasks. By early 1979, in a further effort to promote increased productivity, experimental plants nationwide were being given greater local autonomy in conducting experiments in organization and worker motivation, planning enterprise acquisitions, and importing foreign equipment. At the same time that the state ' was' attempting to tighten i t s centralized planning and more - 18 -e f f i c i e n t l y c o o r d i n a t e p r o d u c t i o n , e n t e r p r i s e s earned the r i g h t to r e j e c t p l a n n i n g t a r g e t s they thought u n f e a s i b l e . They were gi v e n g r e a t e r freedom to use whatever means they thought necessary to achieve the s t a t e ' s t a r g e t s , and broadcasts were h e a v i l y 25 p u b l i c i z i n g e n t e r p r i s e s ' experiences i n self-management. The l i m i t e d measure of managerial autonomy thus granted l o c a l e n t e r -p r i s e s was mainly c o n f i n e d to the d e t e r m i n a t i o n of ways to meet go a l s p r e v i o u s l y e i t h e r s e t or d e l i m i t e d by s t a t e p l a n n e r s . The g o a l s themselves were l e s s n e g o t i a b l e ; the extent to which they were n e g o t i a b l e d e t r a c t e d from the s t a t e ' s e f f o r t s toward g r e a t e r c e n t r a l i z a t i o n of p l a n n i n g . Beyond o r g a n i z a t i o n a l reforms, the p e r i o d 1977-1979 a l s o saw a n a t i o n a l reemphasis upon m a t e r i a l i n c e n t i v e s as a p o l i c y used i n the hope of s t i m u l a t i n g worker p r o d u c t i v i t y . The f i r s t step i n t h i s d i r e c t i o n was the October 1, 1977 pay i n c r e a s e of about 10%, a f f e c t i n g roughly 64% of a l l n o n - a g r i c u l t u r a l workers; i t was only the second such s u b s t a n t i a l r a i s e i n the 28 y e a r s of the PRC. The r a i s e i n v o l v e d both i n c r e a s e d wages f o r p a r t i c u l a r grades of jobs, and mass promotions to h i g h e r grade job grades; t a r g e t e d b e n e f i -c i a r i e s were s a i d to be those lowest on the pay s c a l e , p l u s s e n i o r 26 and s k i l l e d workers underpaid d u r i n g the C u l t u r a l R e v o l u t i o n . The r a i s e , a c c o r d i n g to the government, was made p o s s i b l e by i n c r e a s e d s t a t e revenues owing to i n c r e a s e d p r o d u c t i o n i n the y e a r s i n c e the d o w n f a l l of the Gang of Pour. The c l e a r i m p l i c a t i o n was t h a t i f p r o d u c t i o n continued to i n c r e a s e , so, too, would wages. A campaign began i n mid-1977 to p o p u l a r i z e the " e q u i t a b l e " ( - 19 -u s a g e o f work p o i n t s y s t e m s i n a l l o c a t i n g w o r k e r i n c o m e s . B r o a d c a s t s u r g e d t h a t t h e a c c u m u l a t i o n o f work p o i n t s , t h r o u g h w h i c h w o r k e r s a l a r i e s were d e t e r m i n e d , be b a s e d more d i r e c t l y upon t h e p r o d u c t i v i t y o f i n d i v i d u a l w o r k e r s . I n A u g u s t 1977, a r e m a r k a b l e d e b a t e , u n t h i n k a b l e a y e a r b e f o r e , was p u b l i s h e d i n t h e Guangming D a i l y . The a r t i c l e e x a m i n e d , w i t h o u t d r a w i n g c o n c l u s i o n s , t h e q u e s t i o n s o f : 1) t h e d i f f e r e n c e between " d i s t r i b u t i o n a c c o r d i n g t o work" and " m a t e r i a l i n c e n t i v e s , " and 2) w h e t h e r t h e i m p l e m e n t a t i o n o f " d i s t r i b u t i o n 27 a c c o r d i n g t o work" w o u l d c r e a t e b o u r g e o i s e l e m e n t s i n s o c i e t y . By t h e end o f t h e y e a r , t h e newspaper had r e s o l v e d t h e q u e s t i o n s . A November a r t i c l e a d v o c a t e d t h e c o n c e p t o f " f r o m e a c h a c c o r d i n g t o h i s a b i l i t y , t o e a c h a c c o r d i n g t o h i s work" a s a M a r x i s t c o n c e p t d i s t i n c t f r o m m a t e r i a l i n c e n t i v e s ; t h e c o n c e p t o f b o n u s e s a s d i s t i n c t f r o m " p u t t i n g b o n u s e s i n command"; and p i e c e wages a s a s i m p l e a n d j u s t i f i a b l e v a r i a n t o f t i m e wages. By t h e s p r i n g o f 1978, upon t h e h e e l s o f t h e N a t i o n a l P e o p l e ' s C o n g r e s s , t h e d r i v e w i t h i n C h i n a t o i m p l e m e n t " t o e a c h a c c o r d i n g t o h i s work" a n d t o r e s t o r e bonus and p i e c e r a t e wages was u n i v e r s a l . T h i s r e s t o r a t i o n was, i n p a r t , i n t e n d e d t o b o l s t e r e f f o r t s t o w a r d g r e a t e r c o o r d i n a t i o n and c e n t r a l i z a t i o n i n p l a n n i n g ; i t was h o ped t h a t by r e w a r d i n g h a r d work w i t h b o n u s e s and a d d i t i o n a l i ncome, e n e r g i e s o t h e r w i s e d e v o t e d t o p r i v a t e , h o u s e h o l d s i d e l i n e o c c u p a t i o n s o r c o r r u p t i o n would i n s t e a d be c h a n n e l e d i n t o t h e c o l l e c t i v e e n t e r p r i s e s . As i n c e n t i v e s were i n t r o d u c e d , s o , t o o , were i n d i v i d u a l - 20 -d i s i n c e n t i v e s . P i e c e work wages a l s o s e r v e d t o p u n i s h t h e non-p r o d u c t i v e . Pay r e d u c t i o n s were a l s o e m p l o y e d a s a d i s c i p l i n a r y measure a g a i n s t low p r o d u c t i o n o r p o o r q u a l i t y c o n t r o l . I n s i t u a t i o n s where t h e payment o f b o n u s e s was w i d e s p r e a d and came t o be e x p e c t e d as p a r t o f t h e b a s i c wage, t h e i r d e n i a l c o u l d a l s o s e r v e a s a t y p e o f d i s i n c e n t i v e . The message a c c o m p a n y i n g t h e " t o e a c h a c c o r d i n g t o h i s work" campaign was c l e a r : t h o s e who met o r o v e r f i l l e d t h e i r p r o d u c t i o n q u o t a s w o u l d , i n a d d i t i o n t o t h e p r i m a r y m o t i v a t i o n o f m o r a l T i g h t n e s s , a l s o r e c e i v e p r o p e r m a t e r i a l r e c o g n i t i o n . T h o s e who d i d n o t p r o d u c e w o u l d be p u n i s h e d a c c o r d i n g l y . Toward t h e end o f 1978, b r o a d c a s t r e m i n d e r s t h a t bonus and wage i n c e n t i v e s y s t e m s were o n l y s e c o n d a r y methods o f w o r k e r m o t i v a t i o n g r a d u a l l y d i s a p p e a r e d . F u r t h e r wage i n c r e a s e s and b onuses were i n s t i t u t e d i n 1979, i n a r e d o u b l e d e f f o r t t o i n c r e a s e p r o d u c t i v i t y . Maximum a l l o w -a b l e b o n u s e s were i n c r e a s e d , and p i e c e work r a t e s were t i e d d i r e c t l y t o r i s e s ( o r f a l l s ) i n o u t p u t , i n o r d e r t o l i n k more d i r e c t l y o v e r a l l income r i s e s t o i n c r e a s e d o u t p u t . B o n u s e s were a l s o o f f e r e d f o r t e c h n i c a l i n n o v a t i o n s by w o r k e r s , and even t o t r a n s l a t o r s o f f o r e i g n t e c h n i c a l b o o k s . P r o m o t i o n s were t o be 29 b a s e d more upon a w o r k e r ' s p r o f i c i e n c y t h a n h i s s e n i o r i t y . The programmes o f i n d i v i d u a l i n c e n t i v e s have a l s o been p a r t i a l l y hampered by b u r e a u c r a c y and t h e norms o f t h e p a s t . M u t u a l c r i t i c i s m s e s s i o n s and work a t t i t u d e s , a s w e l l a s o u t p u t p e r f o r m a n c e , were u s e d a s c r i t e r i a f o r t h e a c c u m u l a t i o n o f i n d i v i d u a l r e w a r d s . T h u s , f a v o u r i t i s m , f o r p o l i t i c a l o r s o c i a l - 21 -r e a s o n s , c o n t i n u e d t o be an i m p o r t a n t d e t e r m i n i n g f a c t o r i n g a i n i n g p r o m o t i o n s . T h i s was compounded by t h e r e c u r r i n g t e n d e n c y among managers t o d i s t r i b u t e b o n u s e s e v e n l y r e g a r d l e s s 30 o f m e r i t , p a r t i c u l a r l y due t o s o c i a l p r e s s u r e s . I n t h e C h i n e s e p r e s s , s u c h " e g a l i t a r i a n i s r a " came u n d e r r e p e a t e d a t t a c k t h r o u g h -o u t t h e p e r i o d , i n d i c a t i n g t h a t i t r e m a i n e d a p r o b l e m . I n l a t e 1979, a p o i n t s y s t e m t o d e t e r m i n e bonus a l l o c a t i o n s was i n s t i -t u t e d by some e n t e r p r i s e s t o combat t h e s e p r o b l e m s . By a w a r d i n g w o r k e r s s e t numbers o f p o i n t s f o r p a r t i c u l a r a c c o m p l i s h m e n t s , and a l l o c a t i n g b o n u s e s on t h e b a s i s o f p o i n t t o t a l s , t h e d i s c r e t i o n o f managers i n a r b i t r a r i l y a w a r d i n g b o n u s e s was 31 r e d u c e d . ^ The i n c e n t i v e s t h e m s e l v e s were t h o u g h t by some t o be i n s u f -f i c i e n t t o s p u r w o r k e r s t o g r e a t e r p r o d u c t i v i t y . W o r k e r s were o f t e n r e p o r t e d ( u s u a l l y by t h e W e s t e r n p r e s s , b u t o c c a s i o n a l l y by t h e C h i n e s e a s w e l l ) a s i m p a t i e n t w i t h t h e s l o w p a c e o f r e f o r m s . The C h i n e s e g o v e r n m e n t seemed t o s h a r e t h i s o p i n i o n , b u t was c o n s t r a i n e d p o l i t i c a l l y f r o m m oving t o o r a p i d l y i n i n d u c i n g l a r g e wage i n e q u i t i e s ; t h e q u e s t i o n was s t i l l a s o u r c e o f d i s a g r e e m e n t and f a c t i o n a l i s m among go v e r n m e n t l e a d e r s . C o l l e c t i v e i n c e n t i v e s were a l s o b e i n g i n s t i t u t e d f o r C h i n e s e f a c t o r i e s . U n i t s s h o w i n g g r e a t e r p r o d u c t i v i t y were t o be r e w a r d e d w i t h g r e a t e r autonomy i n t h e i r own p l a n n i n g and a l l o c a -t i v e d e c i s i o n s . P r i c e r i s e s o f some raw m a t e r i a l s and f i n i s h e d g o o d s , " t o r e f l e c t t h e i r demand and t h e i r i m p o r t a n c e , " were a l s o 32 a l l o w e d . The move was d e s i g n e d t o u t i l i z e i n c r e a s e s i n - 22 -c o l l e c t i v e income as a further spur to production. The July 1978 issuance of the "Thirty-point decision on industry," including the standard of the " f i v e guarantees" as production goals, e f f e c t i v e l y supplanted the long-standing, e g a l i t a r i a n national model of enterprise management, the Anshan Iron and Steel Plant Constitution. The decision c o d i f i e d and formalized production incentives, f o r both c o l l e c t i v e s and i n d i v i d u a l s , as the national i d e a l : "Under t h i s system, the state would designate f i x e d quotas f o r each enterprise with respect to output, personnel and organization, raw materials, c a p i t a l / assets, and the amount of l i q u i d c a p i t a l . In return, the enterprises would submit f i v e guarantees to the state with regard to quality and quantity of product, t o t a l wage b i l l , costs, expected state p r o f i t , and the l i f e span of major equipment. Enterprises o v e r f u l f i l l i n g t h e i r f i v e guarantees would be e n t i t l e d to r e t a i n a 33 portion of the planned p r o f i t as a bonus fund..." The " f i v e guarantees" thus served as a sort of contract between the enterprise and the state, attempting to deal with many of the concerns (e.g., poor quality control, supply of raw materials, etc.) that had previously hampered productivity. Bonuses were also c o d i f i e d , as rewards f o r o v e r f u l f i l l i n g production. Anticipated bonuses were to be calculated as part of the t o t a l budgeted wage b i l l . I t i s l e s s c l e a r whether, as with i n d i v i d u a l incentive programmes, proposed corresponding disincentives f o r poorly performing enterprises were f u l l y implemented. A January 1978 - 23 -R e d F l a g a r t i c l e , w h i l e a d v o c a t i n g t h e " t o e a c h a c c o r d i n g t o h i s work" d o c t r i n e , a l s o u r g e d r e a d e r s t o " u s e p r i c e l a w s t o s e r v e s o c i a l i s m " i n m a k i n g t h e l o g i c a l e x t e n s i o n t h a t , a s p r o d u c t i v e u n i t s a r e r e w a r d e d , n o n p r o d u c t i v e o n e s o u g h t t o be p u n i s h e d . ^ R e f e r e n c e s l a t e r became common t o t h e c o n c e p t o f p h a s i n g o u t h o p e l e s s l y n o n p r o d u c t i v e u n i t s , o r m e r g i n g them w i t h more a c c e p t a b l e o n e s . W h e t h e r s u c h s a n c t i o n s w e r e a c t i v e l y p u r s u e d d u r i n g t h e 1977-1979 p e r i o d i s u n c l e a r ; t h e a c t u a l l o g i s t i c s o f c l o s i n g down an u n e c o n o m i c a l o p e r a t i o n were n e v e r p u b l i c i z e d . The C h i n e s e s y s t e m p l a c e s a h e a v y e m p h a s i s u p o n j o b s e c u r i t y , i n some c a s e s e v e n a l l o w i n g p o s i t i o n s t o be p a s s e d on t o c h i l d r e n . M a n a g e r s h a v e shown e x t r e m e r e l u c t a n c e i n f o l l o w i n g d i r e c t i v e s 35 e v e n t o f i r e u n p r o d u c t i v e i n d i v i d u a l s . The p r o s p e c t o f c l o s i n g down a n e n t i r e e n t e r p r i s e w o u l d mean e i t h e r d o i n g s o a t t h e c o s t o f a s s u m i n g t h e b u r d e n o f r e a s s i g n i n g t h e w o r k e r s t o o t h e r e n t e r -p r i s e s w h i c h may n o t want o r be a b l e t o a c c o m m o d a t e t h e m ; o r a l l o w i n g t h e d i s p o s s e s s e d i n d i v i d u a l s t o f e n d f o r t h e m s e l v e s u p o n a j o b " m a r k e t " made p o s s i b l e by g r a n t i n g l i m i t e d a u t o n o m y i n h i r i n g t o l o c a l e n t e r p r i s e s . Any s o r t o f an o p e n ^ j o b - m a r k e t i n t h e C h i n e s e economy c a r r i e s e n o r m o u s r i s k s . A s i n most u n d e r d e v e l o p e d c o u n t r i e s , K t h e d e s i r e f o r m i g r a t i o n t o u r b a n a r e a s i s g r e a t ; d e s p i t e s e v e r e h o u s i n g s h o r t a g e s a n d u r b a n u n e m p l o y m e n t , i t i s stemmed i n C h i n a o n l y by t h e g o v e r n m e n t ' s e n f o r c e m e n t o f v e r y l i m i t e d j o b m o b i l i t y . The a v e r a g e i n c o m e o f u r b a n w o r k e r s i s t w i c e t h a t o f r u r a l o n e s , 0 - 24 -and those l i v i n g i n the c i t i e s enjoy innumerable c u l t u r a l , e d u c a t i o n a l , and p o l i t i c a l advantages. Moreover, s i n c e the average income i n r u r a l areas i s c l o s e r to the s u b s i s t e n c e l e v e l than t h a t i n urban a r e a s , there are fewer o p p o r t u n i t i e s f o r l a r g e wage d i f f e r e n t i a l s i n r u r a l e n t e r p r i s e s and f o r l a r g e bonuses to hard, p r o d u c t i v e workers. With the p r e v i o u s emphasis upon r u r a l development, and i t s corresponding d u p l i c a -t i o n of i n d u s t r i a l f a c i l i t i e s , a d i s p r o p o r t i o n a t e number of the "non-productive" e n t e r p r i s e s were r u r a l ones. As a r e s u l t , the p u r s u i t of one type of i n c e n t i v e programme (urban f a c t o r y i n c e n t i v e s ) l e d to g r e a t e r dangers and imbalances i n the p u r s u i t of another (the d i s i n c e n t i v e of threatened c l o s u r e of unproductive r u r a l e n t e r p r i s e s ) . While p r o d u c t i o n i n c e n t i v e s were being slowly i n t r o d u c e d , the standards by which p r o d u c t i o n was judged were a l s o e v o l v i n g . As i n other managerial endeavors, the p o l i t i c a l c o r r e c t n e s s of a c o l l e c t i v e ' s a c t i o n s became l e s s r e l e v a n t , superceded not only by the imperative of meeting p h y s i c a l p r o d u c t i o n quotas, but a l s o , i n c r e a s i n g l y , by f i n a n c i a l a c c o u n t a b i l i t y . The deemphasis upon p o l i t i c a l a c t i v i t y i n i n d u s t r i a l p r o d u c t i o n was r a p i d . Soon a f t e r the beginning of 1977 , broad-c a s t s began demanding the implementation of whatever steps were necessary to i n c r e a s e p r o d u c t i o n and meet the demands of r a p i d development and growth. An August 1977 Red F l a g a r t i c l e s t r e s s e d "reasonable p r o f i t s " by e n t e r p r i s e s as d e s i r a b l e , as l o n g as they were "not i n command"' as the major mo t i v a t o r f o r i n c r e a s e d - 25 -production. This signalled the start of a further campaign to urge enterprises to control their financial management more s t r i c t l y and thus remit profits to the state rather than draining i t of subsidies. By the February 1978 National People's Congress, Chairman Hua was able to specify the idealized goals of enterprise management as efficiency and accountability - goals related to the accumulation of socialist profit as well as the fulfillment of 37 physical output quotas. The "Thirty-point decision on industry," issued in July 1978, included eight "economic and technical norms for the evaluation of industry." These were: quantitative output; product mix; quality; raw materials, fuel, and power consumption; labour productivity; "58 costs; profits; and working uti l i z a t i o n capital. The implement-ation of this and the "five fixed quotas" and "five guarantees" systems came as a watershed in income distribution policy. Both quantity of product and the generation of state profit were included as guarantees; overfulfillroent of the guarantees was tied to the reward of a fixed percentage of the profit. Thus both the judgement of an enterprise's performance and the incentive used to encourage high performance were related to the cost efficiency and financial management of the enterprise, rather than s t r i c t l y towards meeting a physical production quota imposed by the state. Of a l l the various targets enterprises were asked to meet, the profit target had become the most important, backed by the most incentives, the most punishment for failure in meeting state targets, and, in much of 1979, the most propaganda - 26 -e f f o r t s i n b r o a d c a s t s d e s i g n e d t o e n c o u r a g e e n t e r p r i s e p e r f o r m a n c e . A t t h e June 1979 NPC, C h a i r m a n Hua's work r e p o r t , i n n o t i n g t h a t n e a r l y o n e - f o u r t h o f s t a t e i n d u s t r i a l e n t e r p r i s e s were s t i l l o p e r a t i n g a t a l o s s , s t a t e d t h a t t h o s e s t i l l i n t h e r e d w o u l d be 39 g i v e n one y e a r t o t u r n a p r o f i t o r c l o s e down. As t h e p e r c e n t -age o f l o c a l l y r u n e n t e r p r i s e s l o s i n g money and r e q u i r i n g s t a t e s u b s i d i e s was e s t i m a t e d t o be f a r h i g h e r , ^ 0 i t was u n c l e a r w h e t h e r s u c h s e v e r e s a n c t i o n s were a l s o t o a p p l y t o n o n - s t a t e - r u n p l a n t s , o r ( a s n o t e d e a r l i e r ) what t h e mechanisms o f c l o s u r e s o f p l a n t s o r d e p a r t m e n t s , o r o f i n d i v i d u a l f i r i n g s , a s p e n a l t i e s f o r n o n p r o d u c t i v i t y m i g h t i n v o l v e . One s o u r c e i n d i c a t e s t h a t i n 1979 2400 f a c t o r i e s w i t h u n s a t i s f a c t o r y r e c o r d s " c h a n g e d t o o t h e r p r o d u c t s , merged w i t h o t h e r f a c t o r i e s , o r c e a s e d p r o d u c t i o n a l t o g e t h e r , " w i t h o u t d i s t i n g u i s h i n g among t h e s e a c t i o n s o r d e t a i l i n g t h e i r c o n s e q u e n c e s . ^ S p e c i f i c c l o s u r e s were n o t p u b l i c i z e d , s u g g e s t i n g t h a t t h e t h r e a t o f s u c h s a n c t i o n s was a l s o i n t e n d e d a s a s p u r t o m o t i v a t e n o n - p r o f i t a b l e u n i t s , r a t h e r t h a n s i m p l y a s a f l a t s t a t e m e n t o f p o l i c y . A s i m u l t a n e o u s move t o " r e d u c e o r e l i m i n a t e t h e i n d u s t r i a l and c o m m e r c i a l t a x e s f o r 42 p o o r e r ( l o c a l ) e n t e r p r i s e s " ^ a l s o s u g g e s t s a r e l u c t a n c e t o e n f o r c e t h e t h r e a t e n e d c l o s u r e s . I n c r e a s e d autonomy and c o n v e r s i o n t o p r o f i t a b i l i t y a s a s t a n d a r d o f p e r f o r m a n c e combined t o c r e a t e a s i t u a t i o n i n w h i c h " p r o f i t a b l e e n t e r p r i s e s m i g h t be p e r m i t t e d t o r e t a i n an i n c r e a s -i n g l y l a r g e s h a r e o f t h e p r o f i t s i f t h e y d e m o n s t r a t e e f f e c t i v e - 27 -4 3 use of these funds.11 ^  This implies a great variety in the amount of autonomy given specific industries. Fixed prices for raw materials, some higher than their actual value (such as agricultural commodities) and some lower, can affect the pr o f i t a b i l i t y of entire industries in ways totally irrelevant to an individual enterprise's productivity. While the govern-ment admitted differences between losses due to "policy" (such as fixed prices, investment in unindustrialized regions, etc.) and losses due to "mismanagement," there is no indication that a distinction was made for the purpose of assessing material rewards. Reforms allowing increased autonomy in local planning, combined with the linking of an enterprise's managerial autonomy to i t s level of p r o f i t a b i l i t y , meant that by 1979 incentive systems were in place at a l l levels of local industrial enter-prises. Superior production and economic efficiency earned enterprises, their individual managers, and their collective work teams, both additional money and a greater hand in deciding i t s use. The expansion in 1979 of the role of light industry, which produces primarily consumer goods, was cast not only in the light of the need to increase exports, but also in general to help f u l f i l l the goal of increasing the l i v i n g standards of the masses. Thus, the individual, as well as collectives, might receive both material reward for high performance and (through the enhanced availability of consumer goods) additional diversity . - 28 -of c h o i c e i n i t s a l l o c a t i o n . The c o n t i n u a l 1977-1979 i n t r o d u c t i o n of wage i n c r e a s e s , bonuses, i n c r e a s e d a v a i l a b i l i t y of consumer goods, and i n c r e a s e s i n s t a t e support p r i c e s f o r commodities i n t r o d u c e d i n f l a t i o n as a new economic danger. Nonexistent through much of the h i s t o r y of the PRC, i n f l a t i o n was o f f i c i a l l y conceded a t n e a r l y 6% i n 1979, w i t h o u t s i d e estimates h i g h e r . By l a t e 1979, " a r b i t r a r y p r i c e r i s e s " were an often-mentioned item of concern i n broad-c a s t s . ^ Both Chinese and Western economists i n 1979 c a l l e d f o r p r i c e reforms and l i b e r a l i z a t i o n , to a l l o w the p r i c e s of raw m a t e r i a l s and i n d u s t r i a l products to r e f l e c t more a c c u r a t e l y t h e i r market v a l u e . However, the Chinese government has been h e s i t a n t and a p p a r e n t l y unable to agree upon ways of t a c k l i n g such a complex and c o n t r o v e r s i a l i s s u e . IV. VARIATIONS ON A THEME Thus f a r , Chinese i n d u s t r i a l reforms have been presented mostly as a matter of n a t i o n a l p o l i c y d e c i s i o n s , c o n t r o l l e d and implemented u n i f o r m l y a c r o s s the country. The conception thus i s of i n d u s t r i a l China as a s i n g l e , m o n o l i t h i c e n t i t y , w i t h c o o r d i n a t e d and c e n t r a l i z e d p l a n n i n g , p r o d u c t i o n , and p o l i c y i n s t i t u t e d u n i v e r s a l l y and without v a r i a t i o n . Yet, i n a country as g e o g r a p h i c a l l y v a s t , economically v a r i e d , and p o l i t i c a l l y t u r b u l e n t as China, some degrees of v a r i a t i o n seem to be unavoidable. - 29 - • E v i d e n c e o f s u c h v a r i a t i o n , however, i s s c a t t e r e d and i n c o m p l e t e . M e d i a a t t h e p r o v i n c i a l and l o c a l l e v e l s ( t h e main s o u r c e a v a i l a b l e f o r a n a l y s i s o f s u b - n a t i o n a l p o l i c y ) a r e s u b j e c t t o n a t i o n a l a s w e l l a s l o c a l c o n t r o l even i n d e g r e e s o f e m p h a s i s p l a c e d upon s u b j e c t m a t e r i a l ( e . g . , t h e same s t a n d a r d s e t s o f a d j e c t i v e s a r e i n v a r i a b l y e m p l o y e d i n l o c a l b r o a d c a s t s d e s c r i b i n g one o r a n o t h e r n a t i o n a l d i r e c t i v e o r t h e o r e t i c a l a r t i c l e ) . P o l i t i c a l l y , o f f i c i a l s a r e a l s o p r e s s u r e d t o f o l l o w n a t i o n a l l e a d s and c a m p a i g n s , a n d t h e r e f o r e p r o v i n c i a l p o l i c i e s may i n s t e a d be s i m i l a r , a n d r e p o r t e d a s s u c h , w i t h o u t any c o o r d i n a t e d p r o p a g a n d a e f f o r t s . F i n a l l y , t h e n a t u r a l g o v e r n m e n t a l a v e r s i o n t o r e p o r t i n g n e g a t i v e news r e n d e r s c o v e r a g e o f any s u b j e c t p o t e n t i a l l y i n c o m p l e t e . ( E . g . , r e c o r d p r o d u c t i o n l e v e l s i n a g i v e n i n d u s t r y a r e a l w a y s h i g h l i g h t e d , b u t p r o d u c t i o n d r o p s a r e n o t m e n t i o n e d - u n l e s s i t s e r v e s a g r e a t e r p o l i t i c a l p u r p o s e , s u c h a s d e n i g r a t i o n o f t h e Gang o f F o u r o r p r o m o t i o n o f a new p o l i c y . ) The t r a n s l a t i o n o f b r o a d c a s t s and a r t i c l e s i n t o t h e E n g l i s h l a n g u a g e f o r m a t o f F B I S , t h e m a j o r s o u r c e f o r t h i s s t u d y , o f f e r s an a d d i t i o n a l h a z a r d ; w i t h m a t e r i a l t i g h t l y c o n t r o l l e d by p r o p a g a n d a d e p a r t m e n t s , t h e n u a n c e s o f s i n g l e words o r p h r a s e s may s i g n a l e i t h e r d i f f e r i n g p o l i t i c a l v i e w s o r p r i o r i t i e s , o r t h e same C h i n e s e p h r a s e i n t e r p r e t e d d i f f e r e n t l y by d i f f e r e n t t r a n s l a t o r s . W i t h t h e s e c a v e a t s and t h e h a n d i c a p o f i n c o m p l e t e e v i d e n c e , an e x a m i n a t i o n o f d a i l y C h i n e s e F B I S c o m p i l a t i o n s o v e r t h e p e r i o d 1977-1979 does r e v e a l some m a j o r v a r i a t i o n s i n t h e t i m i n g and - 30 -p r i o r i t y g i v e n n a t i o n a l r e f o r m s ; t h e n a t u r e and p r i o r i t i e s o f r e f o r m s and e x p e r i m e n t s c a r r i e d o u t u n d e r t h e d i r e c t i o n o f l o c a l o f f i c i a l s ; and t h e manner i n w h i c h new r e f o r m s and p o l i c i e s were p r e s e n t e d t o t h e g e n e r a l p o p u l a t i o n . These d i f f e r e n c e s c a n g e n e r a l l y be c a t e g o r i z e d i n one of t h r e e ways: as due t o 1 ) r e g i o n a l , g e o g r a p h i c , o r d e m o g r a p h i c f a c t o r s ; 2) e c o n o m i c f a c t o r s ( t h e d i f f e r i n g n a t u r e o f l o c a l e c o n o m i e s ) , o r 3) p o l i t i c a l f a c t o r s , i n c l u d i n g t h e use o f l o c a l o r p r o v i n c i a l e x p e r i m e n t s as t e s t s f o r t h e p o s s i b l e f u t u r e i m p l e m e n t a t i o n o f n a t i o n a l m e a s u r e s . The f i r s t o f t h e s e f a c t o r s i s t h e one w h i c h has been most s t a b l e , b o t h b e f o r e and d u r i n g t h e p e r i o d u n d e r e x a m i n a t i o n . C a l l s f o r p r o d u c t i o n o f n o n - e s s e n t i a l i t e m s have c o n s i s t e n t l y demanded t h a t p r i o r i t y be g i v e n t o t h e s u p p l y o f a d d i t i o n a l i n d u s t r i a l and consumer goods t o r u r a l a r e a s , and n o n - s t a p l e f o o d i t e m s t o u r b a n a r e a s , a s an a t t e m p t t o c o u n t e r a c t t h e n a t u r a l b i a s i n t h e i r d i s t r i b u t i o n . The t y p e s o f consumer goods made a v a i l a b l e a l s o v a r y r e g i o n a l l y w i t h d i f f e r e n c e s i n c l i m a t e s and c u l t u r e s . I n p a r t i c u l a r , t h e C h i n e s e government makes a s p e c i a l e f f o r t t o p u b l i c i z e t h e amount and v a r i e t y o f goods made a v a i l a b l e t o m i n o r i t y (non-Han) p e o p l e s . The s p e c i a l a t t e n t i o n g i v e n t o m i n o r i t i e s i s a l s o r e f l e c t e d i n t h e anomalous p o l i c i e s o f t h e autonomous r e g i o n s , where t h e g r e a t e s t c o n c e n t r a t i o n s o f m i n o r i t i e s a r e l o c a t e d . P a r t i c u l a r l y i n N e i Monggol ( I n n e r M o n g o l i a ) and X i z a n g ( T i b e t ) , w h i c h a l o n g w i t h X i n j i a n g have t h e s t r o n g e s t c u l t u r a l t i e s w i t h g r o u p s - 31 -b e y o n d t h e b o u n d a r i e s o f t h e PRC, p r o p a g a n d a e f f o r t s c o n t i n u o u s l y r e t u r n t o t h e theme o f v a s t improvement i n t h e masses* l i v i n g s t a n d a r d s s i n c e l i b e r a t i o n , t h e s p r e a d o f p r o s p e r i t y , and t h e f r e e a v a i l a b i l i t y o f g o o d s . The c a l l f o r i n c r e a s e d consumer goods and a t t e n t i o n t o t h e " l i v e l i h o o d o f t h e masses" - a p r o p a -ganda theme i m m e d i a t e l y p r e c e d i n g t h e r e i n s t i t u t i o n o f m a t e r i a l i n c e n t i v e s e l s e w h e r e i n t h e c o u n t r y - was v o i c e d f i r s t d u r i n g t h e p e r i o d 1977-1979 i n t h e m i n o r i t y a r e a s , p a r t i c u l a r l y N e i M o n g g o l , b u t f o r r e a s o n s p e r h a p s o n l y p e r i p h e r a l t o t h e r e f o r m s u n d e r c o n s i d e r a t i o n e l s e w h e r e . More i m p o r t a n t i n t h e s e a r e a s was t h e o n g o i n g s t r u g g l e t o e n s u r e l o y a l t y t o t h e C h i n e s e mother-l a n d , p a r t i c u l a r l y a l o n g t h e l o n g and a n t a g o n i s t i c S o v i e t and 4-5 M o n g o l i a n b o r d e r s , by b u y i n g o f f t h e r e s i d e n t s . G e o g r a p h i c p r o x i m i t y t o t h e c a p i t a l i s t Hong Kong and Macao c o l o n i e s , and s t r o n g f a m i l y t i e s t o l a r g e numbers o f o v e r s e a s C h i n e s e , were i m p o r t a n t f a c t o r s i n Guangdong P r o v i n c e ' s e a r l y and u n u s u a l l y i n t e n s e e f f o r t s i n i m p l e m e n t i n g m a t e r i a l i n c e n t i v e programmes. L a t e r , t h e 1979 e s t a b l i s h m e n t o f S p e c i a l E c o n o m i c Zones i n Guangdong and E u j i a n was d e s i g n e d t o h e l p l u r e t h e i n v e s t m e n t c a p i t a l a n d t e c h n i c a l e x p e r t i s e o f C h i n e s e e x p a t r i a t e s b a c k t o t h e s e c t i o n s o f t h e i r n a t i v e c o u n t r y where t h e y were most AC. l i k e l y t o have e x i s t i n g f a m i l y and e m o t i o n a l a t t a c h m e n t s . The p h y s i c a l r e m o t e n e s s and u n d e r d e v e l o p m e n t o f C h i n a ' s h i n t e r l a n d s , p a r t i c u l a r l y t h e w e s t e r n autonomous r e g i o n s ( X i z a n g , X i n j i a n g , and Q i n g h a i ) , a l s o a f f e c t e d t h e n a t u r e and p a c e o f r e f o r m s t h e r e . I n s t a n t a n e o u s c o m m u n i c a t i o n s n o t w i t h s t a n d i n g , - 32 -the p o l i t i c a l movements and campaigns of the rest of the country often took months to f i l t e r westward, and raged on while they were superceded by new movements elsewhere. (An excellent example of this was the January 1978 ouster of Saifudin as Party f i r s t secretary in Xinjiang; he was the last of a series of provincial heads removed in late 1976 and 1977 under accusations of direct or unwitting collusion with the Gang of Pour.) More generally, longstanding Chinese efforts to industrialize the most backward of the country's regions had led to a continuance of subsidies for uneconomic enterprises that, under the 1978-1979 drive for financial accountability among enterprises, would not have been tolerated elsewhere. Conversely, the relatively more industrialized coastal areas were often prime sites for new reforms and experiments because of their pre-existing f a c i l i t i e s and advanced development. Differing economies in different provinces and regions also affected the implementation of reforms. Since reforms across different economic sectors were not uniform, provinces and regions whose economies were dependent upon one sector or a small number of industries or crops varied accordingly. Within sectors, varying conditions also led to differences. In agri-culture, for instance, nearly continuous growing seasons, efforts to popularize triple-cropping, and predominance of labour-inten-sive crops such as rice led Guangdong to become a trend-setting in i t s attention to more efficient policies in the u t i l i z a t i o n of manpower; such policy has a relatively high impact there upon the - 33 -g e n e r a l g o a l of i n c r e a s e d l a b o u r p r o d u c t i v i t y . In i n d u s t r y , the s u b s t a n t i a l investment i n p r e v i o u s l y u n i n d u s t r i a l i z e d areas was undertaken w i t h p o l i t i c a l and s o c i a l as w e l l as p r o d u c t i o n b e n e f i t s i n mind. Reforms i n t e n d i n g to emphasize e f f i c i e n t , c o o r d i n a t e d p r o d u c t i o n and management - w i t h punishment f o r noncompliant e n t e r p r i s e s - were more d i f f i c u l t to implement i n areas whose i n e x p e r i e n c e i n i n d u s t r i a l management, s c a l e of o p e r a t i o n compared to the a v a i l a b l e market, and access to raw m a t e r i a l s were a l l r e c o g n i z e d as d e f i c i e n c i e s when the e n t e r p r i s e s began. These e n t e r p r i s e s , presumably, are a l s o i n c l u d e d among i n d u s t r i e s whose l o s s e s are c a t e g o r i z e d as due to p o l i c y r a t h e r than mismanagement; judgement of t h e i r performance s t r i c t l y by standards of p r o f i t a b i l i t y would p l a c e such e n t e r -p r i s e s a t a c o n s i d e r a b l e disadvantage. Conversely, areas h e a v i l y i n v o l v e d i n l i g h t i n d u s t r i a l output, such as^Shanghai and Guangdong, found themselves under g r e a t e r r e l a t i v e p r e s s u r e to i n c r e a s e p r o d u c t i o n (and p r o d u c t i v i t y ) a t ~ a l l c o s t s , i n order to generate a d d i t i o n a l export goods and f o r e i g n income. They, too, were p l a c e d a t a disadvantage by s t a t e p o l i c y , as exports are s o l d a t lower p r i c e s and are l e s s p r o f i t a b l e than items produced f o r domestic use. At the same time t h a t such areas were expected to s e t examples i n t h e i r use of m a t e r i a l i n c e n t i v e s to spur p r o d u c t i o n , they were r e l a t i v e l y disadvantaged i n the measurement of t h e i r output through p r o f i t -a b i l i t y and the c o r r e s p o n d i n g u n a v a i l a b i l i t y of i n c e n t i v e funds. S p e c i f i c i n f o r m a t i o n on the r e l a t i v e nature of p r o v i n c i a l - 34 -47 and l o c a l economies i s d i f f i c u l t to o b t a i n ; t h i s , a long w i t h space l i m i t a t i o n s , a l l o w s only g e n e r a l i z a t i o n s here,. However, the f a c t o r of d i v e r g e n t l o c a l economies i s an important one to c o n s i d e r as a p o t e n t i a l e x p l a n a t i o n f o r d i v e r g e n t or e x p e r i -mental l o c a l reforms, or o t h e r v a r i a t i o n s i n r e p o r t e d or a c t u a l l o c a l i n d u s t r i a l management p o l i c y . The t h i r d type of d e v i a t i o n from n a t i o n a l p o l i c y , roughly c a t e g o r i z e d as being " p o l i t i c a l " i n nature, i s both the most i n t e r e s t i n g and the most d i f f i c u l t to t r a c e . The p e r i o d of 1977-1979 saw a g r e a t e r amount of freedom granted to p r o v i n c e s (and to l o c a l e n t e r p r i s e s ; beyond ones p u b l i c i z e d more wi d e l y , however, i n f o r m a t i o n on these i s beyond the scope of t h i s study) to embark upon experiments of t h e i r own i n b o o s t i n g i n d u s t r i a l p r o d u c t i v i t y . By 1979, p r o v i n c i a l experiments were openly en-couraged by the c e n t r a l government, many of a s i m i l a r nature i n v o l v i n g i n c r e a s e d e n t e r p r i s e self-management. Thus, while the content of these l o c a l experiments might have been spontan-eous, the d e c i s i o n to embark upon experiments was a m a n i f e s t a -t i o n of n a t i o n a l p o l i c y . Reform e f f o r t s a l s o began a t a time when the new l e a d e r s h i p had not y e t f u l l y c o n s o l i d a t e d i t s power. Thus, the d i f f e r i n g natures of experiments and reforms a t a p r o v i n c i a l l e v e l c o u l d a l s o be i n d i c a t i v e of f a c t i o n a l p o l i t i c a l s t r u g g l e s among p r o v i n c i a l (and n a t i o n a l ) l e a d e r s . The l e a d e r s of some p r o v i n c e s (such as Sichuan) were w e l l ahead of n a t i o n a l reform e f f o r t s w i t h t h e i r own measures; i n o t h e r p r o v i n c e s (such as Anhui) new n a t i o n a l p o l i c i e s and emphases were markedly slow - 35 -48 i n f i l t e r i n g down and r e p l a c i n g t h e o l d . The f o c u s i n t h e r e m a i n d e r o f t h i s s e c t i o n w i l l be upon d e v i a t i o n s w h i c h have been a h e a d of (rather t h a n b e h i n d ) t h e n a t i o n a l norm, and have o r m i g h t i n t h e f u t u r e s e r v e as m o d e ls w i t h w h i c h new n a t i o n a l m e a s u r e s m i g h t be j u s t i f i e d . The most s i g n i f i c a n t d e v i a t i o n s i n i n d u s t r i a l management p o l i c y d u r i n g 1977 o c c u r r e d i n S i c h u a n . They were n o t a b l e b o t h f o r t h e p r e c e d e n t s s e t f o r n a t i o n a l p o l i c y , and f o r t h e p a t r o n a g e o f t h e n - p r o v i n c i a l P a r t y f i r s t s e c r e t a r y Zhao Z i y a n g . T h r e e y e a r s l a t e r , Zhao w o u l d r i s e t o r e p l a c e Hua G u o f e n g as C h i n a ' s P r e m i e r - p a r t i a l l y upon t h e s u c c e s s and n o t o r i e t y o f h i s S i c h u a n l e a d e r s h i p , . w h i c h s e r v e d a s a l e g i t i m a t i o n o f D e n g i s t p o l i c i e s and p o l i t i c s . PBIS e n t r i e s f r o m S i c h u a n r e v e a l f r u s t r a t i n g l y l i t t l e a b o u t a c t u a l i n d u s t r i a l management measures employed t h e r e , e s p e c i a l l y i n 1977. However, as e a r l y a s M a r c h 1977, t h e t o p i c s and demands o f p r o v i n c i a l b r o a d c a s t s c o n t a i n some r e m a r k a b l e m a t e r i a l , e x t r a -o r d i n a r y f o r i t s t i m e b u t commonplace t h e f o l l o w i n g y e a r . V a r i o u s e n t r i e s d u r i n g t h e summer o f 1977 i n c l u d e c a l l s f o r : e l i m i n a t i o n o f w a s t e f u l m e e t i n g s and b e t t e r work a s s e s s m e n t , w i t h r e w a r d s f o r h i g h q u a l i t y ; i m p l e m e n t a t i o n o f sound r u l e s and r e g u l a t i o n s " w i t h t h e s y s t e m o f p o s t r e s p o n s i b i l i t y a s t h e main f a c t o r , " t i g h t e n e d l a b o u r d i s c i p l i n e , and s t r e n g t h e n e d e n t e r -p r i s e management; and an a s s e r t i o n t h a t " t h e l e a d e r s h i p . . . m u s t t a k e good c a r e o f t h e masses* l i v e l i h o o d . . . i n s u r i n g t h a t t h e income o f t h e g r e a t m a j o r i t y o f p e a s a n t s i n c r e a s e s on t h e b a s i s - 36 -of g r e a t e r p r o d u c t i o n . " Sichuan was a l s o the f i r s t s i t e i n China to i n t r o d u c e the "to each a c c o r d i n g to h i s work" campaign 49 as a prelude to renewed emphasis upon m a t e r i a l i n c e n t i v e s . W i thin t h i s s e r i e s of broadcasts l i e j u s t i f i c a t i o n s f o r m a t e r i a l i n c e n t i v e s , and f o r the a b o l i t i o n of p l a n t s ' R e v o l u t i o n -ary Committees and three-in-one management teams, to be r e p l a c e d by a system of i n d i v i d u a l managerial r e s p o n s i b i l i t y . These were two of the major n a t i o n a l p o l i c y changes of the f o l l o w i n g y e a r , 1978. The d e t a i l s of whatever e a r l y reforms were a c t u a l l y imple-mented i n Sichuan were not mentioned, but t h e i r r e s u l t s were n o t a b l e . A p r o v i n c e c h a r a c t e r i z e d by the Chinese media as pre-v i o u s l y i n p o l i t i c a l and economic t u r m o i l , Sichuan recorded tremendous a g r i c u l t u r a l and i n d u s t r i a l g ains i n 1977. However, these were o f f i c i a l l y a s c r i b e d to e r a d i c a t i o n of the i n f l u e n c e of the Gang of Pour, w i t h no mention of any s p e c i f i c reforms or t h e i r e f f e c t s . ^ 0 F u r t h e r reforms f o l l o w e d ; i n the f a l l of 1977 Zhao i s s u e d a c i r c u l a r to improve the p r o v i n c e ' s d i s t r i b u t i o n " to i n s u r e peasants' incomes i n c r e a s e . " With regard to i n d u s t r y , Zhao undertook two measures l a t e r employed as n a t i o n a l models. The f i r s t was the expansion i n s e v e r a l experimental e n t e r p r i s e s of managerial autonomy i n determining p r o d u c t i o n and marketing, r e t a i n a g r e a t e r share of t h e i r own p r o f i t , r e t a i n g r e a t e r c o n t r o l over how the p r o f i t r e t a i n e d by the c o l l e c t i v e would be d i s t r i -buted, and n e g o t i a t e purchases d i r e c t l y w i t h f o r e i g n t r a d i n g -companies. While a number of problems were encountered, such as - 37 -b u r e a u c r a t i c q u a r r e l s between e n t e r p r i s e s and s t a t e p l a n n e r s o v e r t h e e x a c t amount o f c o n t r o l t h a t e n t e r p r i s e s w o u l d have o v e r f u n d s and t h e method o f d e t e r m i n i n g t h e p r o f i t i n v o l v e d , p r o d u c -t i o n and p r o f i t a b i l i t y were s i g n i f i c a n t l y h i g h e r i n t h e t r i a l e n t e r p r i s e s t h a n i n t h e p r o v i n c e a t l a r g e . The e x p e r i m e n t was 51 e x p a n d e d t o 100 e n t e r p r i s e s i n t h e f o l l o w i n g y e a r . S i c h u a n a l s o moved t o promote "economic i n t e g r a t i o n , " t h e c o m b i n a t i o n o f a number o f s m a l l e r e n t e r p r i s e s i n t o l a r g e r j o i n t l y managed o n e s . T h i s was done b o t h among i n d u s t r i a l e n t e r p r i s e s and, by m e r g i n g s t a t e f a r m s w i t h i n d u s t r i a l and c o m m e r c i a l u n i t s , i n c o m b i n a t i o n 52 w i t h a g r i c u l t u r e a n d commerce. By l a t e 1979, t h e r e s u l t i n g s u c c e s s had l e d t o t h e p o p u l a r i z a t i o n o f b o t h e x p e r i m e n t s a s n a t i o n a l m o d e l s . S i c h u a n c o n t i n u e d t o f o r g e a h e a d . 1979 PBIS e n t r i e s i n c l u d e d a d i s c u s s i o n o f i n t e g r a t i o n o f p l a n n e d and m a r k e t e c o n o m i e s and f u r t h e r e x p e r i m e n t s i n t h e a r e a o f e n t e r p r i s e autonomy. These e x p e r i m e n t s i n c l u d e d g i v i n g more f r e e d o m t o i n d i v i d u a l e n t e r -p r i s e s t o c o n t r o l t h e i r m a t e r i a l a c q u i s i t i o n s ; l i m i t e d autonomy f o r e n t e r p r i s e s t o p r o d u c e goods i n a d d i t i o n t o t h o s e s p e c i f i e d i n s t a t e p l a n s ; a l l o w i n g t h e s e e n t e r p r i s e s a f i x e d p e r c e n t a g e o f f o r e i g n exchange f r o m m a t e r i a l s s o l d a b r o a d ; and, c o r r e s p o n d -i n g l y , g r e a t e r autonomy i n t h e d i r e c t p u r c h a s e o f f o r e i g n m a t e r i a l s a n d e q u i p m e n t . The e x p e r i m e n t s i n l a r g e r , j o i n t l y managed e n t e r -p r i s e s were a l s o e xpanded. B r o a d c a s t s c a l l e d f o r managed c o m p e t i -t i o n between i n d u s t r i a l and c o m m e r c i a l c o n c e r n s by a l l o w i n g f a c t o r i e s t o m a r k e t t h e i r p r o d u c t s d i r e c t l y , and f o r r e f o r m o f f i x e d p r i c e p o l i c i e s a f f e c t i n g the p r o f i t a b i l i t y o f s p e c i f i c 52 i n d u s t r i e s . O t h e r p r o v i n c e s , w h i l e n o t n e a r l y as n o t a b l e i n t h e i r a c t i o n s a s S i c h u a n , were a l s o n o t i c e a b l e i n 1977 f o r b e i n g s l i g h t l y ahead o f the n a t i o n a l d i r e c t i v e s . G a n s u , Shandong , J i l i n , and Guang-dong were a l l advanced i n some r e f o r m a r e a s , t h o u g h none c o n s i s t -e n t l y s o . A June 1977 Gansu b r o a d c a s t r e f e r r e d t o t he use o f work p o i n t s y s t e m s , p r o d u c t i v i t y m e a s u r e s , and e v a l u a t i o n o f l a b o u r l o n g b e f o r e i t was f a s h i o n a b l e ; Gansu was l a t e r one of the e a r l i e s t p r o v i n c e s t o b e g i n e m p h a s i z i n g e n t e r p r i s e p r o f i t -a b i l i t y . Shandong , a f t e r b e i n g n o t i c e a b l y q u i c k t o abandon " c o r r e c t i d e o l o g y " a s a d e t e r m i n i n g f a c t o r i n m a n a g e r i a l p o l i c y , was by 1978 u s e d as a n a t i o n a l mode l f o r i t s r e o r g a n i z a t i o n o f i t s f a r m mach ine ry i n d u s t r y ; a n a t i o n a l r e o r g a n i z a t i o n o f the f a r m m a c h i n e r y i n d u s t r y , w i t h s i m i l a r o b j e c t i v e s , f o l l o w e d l a t e r 53 i n the y e a r . J i l i n ' s P a r t y f i r s t s e c r e t a r y , Wang Enmao, c a l l e d i n s p r i n g 1977 f o r an i n c r e a s e i n l i g h t i n d u s t r i a l g o o d s , t o meet demands and improve p e o p l e ' s l i v e l i h o o d s , as w e l l a s the l a u n c h i n g o f a mass movement f o r t e c h n i c a l i n n o v a t i o n s i n i n d u s t r y . J i l i n was a l s o among a h a n d f u l o f p r o v i n c e s t h a t emerged l a t e i n 1978 w i t h e a r l y , t hough l e s s p u b l i c i z e d , i m i t a t i o n s o f S i c h u a n ' s e n t e r p r i s e autonomy e x p e r i m e n t s . E x p e r i m e n t a l e x p a n s i o n o f se l f -managemen t r i g h t s i n t h i r t y J i l i n p l a n t s met w i t h some, though no t u n u s u a l , s u c c e s s . A n h u i , Z h e j i a n g , Hunan , and B e i j i n g a l s o l a u n c h e d e a r l y s e l f - m a n a g e m e n t autonomy e x p e r i m e n t s , w i t h more n o t a b l e r e s u l t s . - 39 -Retention of 23% and 17% of enterprise-generated p r o f i t s in Hunan and B e i j i n g respectively led to s i g n i f i c a n t production increases 54 in both cases. J i l i n appeared again in 1979 as the f i r s t province to promote pu b l i c l y the closure of unproductive f a c t o r i e s . Without (as usual) d e t a i l i n g l o g i s t i c s involved, the province issued d i r e c t i v e s to: 1) suspend-production in wasteful or sub-standard enterprises; 2) force enterprises "whose products do not s e l l " to suspend production or switch to alternative products; and 3) close down 55 f a c t o r i e s operating consistently at a l o s s . By late 1977, Guangdong was distinguishing i t s e l f as a con-s i s t e n t second s i t e of important p r o v i n c i a l v a r i a t i o n s . December 1977 broadcasts included a c a l l to produce greater amounts of l i g h t i n d u s t r i a l products f o r export, and encouragement of family si d e l i n e occupations with appropriate f i n a n c i a l support f o r them. Through 1978 and 1979, Guangdong developed into a pacesetter i n the use of material incentives to i n d u s t r i a l workers; the f i r s t h alf of 1978 witnessed a flo o d of reports of assorted virtuous enterprises employing d i f f e r e n t variations of material reward systems to boost production and quality, improve worker safety, decrease absenteeism, and boost the incomes of workers. Measures to counter the excessive r e q u i s i t i o n i n g of manpower from enter-p r i s e s , a carryover from p r o v i n c i a l a g r i c u l t u r a l reforms, appeared f i r s t in Guangdong at th i s time and l a t e r received national prominence. In 1979, the province also i n s t i t u t e d Sichuan-style experimental autonomy f o r designated enterprises, - 40 -56 again with favourable results. The proximity of Guangdong to Hong Kong and Macao, and the Guangdong origins of large numbers of overseas Chinese (being actively courted by the PRC government), undoubtably contributed to Guangdong's early reemphasis of both material incentives and foreign trade policies. The concentration of Guangdong o f f i c i a l s upon the export of goods and import of foreign capital actually held back organizational reform among Chinese enterprises in the province, as the provincial leadership concentrated i t s energies in other areas. Calls to boost light industrial production for export appeared in Guangdong as early as 1977. Starting in 1978 there were reports that direct investment would be allowed from Hong Kong. A February Hong Kong Standard report was the f i r s t suggestion of a national policy of drawing overseas Chinese back to China, with the site and labour provided for investors wishing to manufacture and export 57 goods (thus earning the PRC needed foreign exchange). Guangdong, in turn, was reported to be demanding that "some of i t s foreign currency remittances should be turned over to local authorities C O for the import of sheet steel to speed modernization." A later report estimated that "HK$100 million was expected to be ploughed into factories and boatyards just beyond the (Hong Kong) border" in 59 Guangdong. By March 1979, the courtship of foreign investment resulted in the creation of two Guangdong "Special Economic Zones." One more zone in Guangdong and three in neighbouring Fujian were added later in 1979. 6 0 - 41 -Guangdong, a l o n g w i t h t h e p r o v i n c e s o f F u j i a n and Hunan, a d d e d a n o t h e r t w i s t i n mid-1979 t o t h e i n c r e a s i n g f r e e d o m o f l o c a l a u t h o r i t i e s t o d e a l d i r e c t l y w i t h f o r e i g n b u s i n e s s m e n . Guangdong o f f i c i a l s o f f e r e d t o " p r o v i d e c r u d e o i l , i n m u l t i - m i l l i o n - b a r r e l q u a n t i t i e s , a s a p o s s i b l e means o f payment f o r f u t u r e heavy m a c h i n e r y and e q u i p m e n t i m p o r t s , " c i r c u m v e n t i n g t r a d i t i o n a l f o r e i g n c u r r e n c y s h o r t a g e s . A l l t h r e e p r o v i n c e s had r e p o r t e d l y been g i v a n " a u t h o r i t y t o n e g o t i a t e n o n - f e r r o u s r e s o u r c e t r a n s -61 a c t i o n s d i r e c t l y w i t h f o r e i g n f i r m s . " T h i s , i n t u r n , h e l d i m p l i c a t i o n s f o r p o s s i b l e f u t u r e j o i n t d e v e l o p m e n t o f s u s p e c t e d o f f s h o r e o i l d e p o s i t s , p a r t i c u l a r l y i n Guangdong's P e a r l R i v e r B a s i n . The t h i r d a r e a where, i n 1977-1979, i m p o r t a n t d e v i a t i o n s f r o m n a t i o n a l p o l i c y have r e p e a t e d l y o c c u r r e d , i s C h i n a ' s l a r g e ' C i t i e s - p a r t i c u l a r l y S h a n g h a i and B e i j i n g , b u t a l s o T i a n j i n . S h a n g h a i , a s a c e n t e r o f p r e - l i b e r a t i o n i n d u s t r y i n C h i n a , has c o n s i s t e n t l y had an u n u s u a l l y h i g h l a b o u r p r o d u c t i v i t y and i n d u s t r i a l p e r f o r m a n c e compared t o t h e r e m a i n d e r o f t h e c o u n t r y . T h i s c a n be a t t r i b u t e d i n p a r t t o s m a l l e r t h a n a v e r a g e u n i t s , l e s s v e r t i c a l i n t e g r a t i o n and g r e a t e r c e n t r a l i z a t i o n i n p l a n n i n g , l e s s e x c e s s i v e s t o c k p i l i n g ( p a r t i c u l a r l y w i t h t h e g e o g r a p h i c p r o x i m i t y o f any raw m a t e r i a l s o r m a r k e t s n e e d e d - a f a c t o r t h a t a l s o k e e p s p r o d u c t i o n c o s t s a b n o r m a l l y l o w ) , and a r e l a t i v e a d v a n t a g e i n t e c h n o l o g y . S h a n g h a i a l s o has a much h i g h e r r a t i o o f l i g h t t o heavy i n d u s t r i a l f a c i l i t i e s t h a n t h e n a t i o n a l a v e r a g e , w h i c h i n t u r n l e a d s t o h i g h e r p r o d u c t i v i t y and p r o f i t a b i l i t y - 42 -( h e a v y i n d u s t r y h a v i n g a g r e a t e r i n v e s t m e n t i n c a p i t a l e q u i p m e n t , 62 a n d f e w e r d i r e c t s a l e s ) . The r e f o r m s u n d e r t a k e n w i t h i n much o f C h i n e s e i n d u s t r y d u r i n g 1977-1979, t h e n , were i n t h e n a t u r e o f c h a r a c t e r i s t i c s a l r e a d y e x i s t i n g i n S h a n g h a i ( a n d , t o a l e s s e r e x t e n t , o t h e r c o a s t a l c i t i e s ) . F o r i n s t a n c e , t h e i n i t i a l 1978 o r g a n i z a t i o n a l r e f o r m s o f t h e m a c h i n e - b u i l d i n g i n d u s t r y were s p e c i f i c a l l y t a r g e t e d t o w a r d s o p e r a t i o n s i n S h a n g h a i , B e i j i n g , T i a n j i n , and t h e n o r t h -e a s t e r n i n d u s t r i a l p r o v i n c e o f L i a o n i n g , where many o f t h e l a r g e s t o p e r a t i o n s were l o c a t e d a n d r e o r g a n i z a t i o n was j u d g e d e a s i e s t . B e i j i n g and S h a n g h a i f a c t o r i e s were b o t h s u b j e c t s f o r much e x p e r i m e n t a t i o n i n 1978-1979. A 1978 B e i j i n g R e view a r t i c l e d e t a i l s an e x p e r i m e n t a l bonus s y s t e m i n a B e i j i n g f a c t o r y , and n o t e s t h a t " f o r a y e a r now, a number o f f a c t o r i e s i n B e i j i n g have been t r y i n g ways o f i n t e g r a t i n g m o r a l e n c o u r a g e m e n t w i t h m a t e r i a l r e w a r d . . . " The i n d i c a t i o n t h a t more t h a n one e x p e r i -ment was u n d e r w a y . s i m u l t a n e o u s l y i s a r e m i n d e r t h a t , a t t h e t i m e , e n t e r p r i s e s i n B e i j i n g were b e i n g g i v e n a r e l a t i v e l y h i g h . d e g r e e o f autonomy i n d e t e r m i n i n g p o s s i b l e p l a n s f o r s t i m u l a t i n g and r e w a r d i n g w o r k e r s , a s one o f t h e e a r l i e s t l o c a t i o n s o f f u r t h e r s e l f - m a n a g e m e n t e x p e r i m e n t s p a t t e r n e d a f t e r t h o s e o f S i c h u a n . S m a l l - s c a l e s h o p s i n B e i j i n g were " b r o u g h t u n d e r t h e d i r e c t c o n t r o l o f t h e c i t y ' s i n d u s t r i a l b u r e a u t o f a c i l i t a t e . . . c o o r d i n a t i o n , " i n a n o t h e r e x p e r i m e n t r e m i n i s c e n t o f p r e v i o u s r e f o r m s i n c o o r d i n a t e d i n d u s t r i a l a n d c o m m e r c i a l v e n t u r e s i n S i c h u a n . ^ • - 43 - . R e p o r t s a l s o s u r f a c e d o f t r i a l bonus s y s t e m s s i m i l a r t o t h o s e o f B e i j i n g and S i c h u a n - s t y l e c o mbined, l a r g e r e n t e r p r i s e s among S h a n g h a i f a c t o r i e s , and o f t h e e s t a b l i s h m e n t i n S h a n g h a i o f an 66 i n f o r m a l " s m a l l l o a n programme" t o a s s i s t s m a l l e n t e r p r i s e s . S h a n g h a i , i n p a r t i c u l a r , u r g e d an even more f l e x i b l e and open-m i n d e d a t t i t u d e t o w a r d r e f o r m s t h a n d i d t h e n a t i o n a l g o v e r n m e n t , w i t h r e p e a t e d b r o a d c a s t c a l l s t o " l e t what i s r e a s o n a b l e become 67 l e g a l . " S h a n g h a i was a l s o t h e s i t e o f t h e f i r s t 1979 e x p e r i -ments i n i m p l e m e n t i n g i n t r a - f a c t o r y c o n t r a c t s y s t e m s between d i f f e r e n t d e p a r t m e n t s s u p p l y i n g e a c h o t h e r w i t h raw m a t e r i a l s o r s e m i - f i n i s h e d p r o d u c t s . V. CONCLUSION The new p o l i c i e s a n d r e f o r m s o f t h e C h i n e s e l e a d e r s h i p i n t h e p e r i o d 1977-1979 had p o s i t i v e e f f e c t s , w i t h i n d u s t r i a l p r o d u c t i o n u p s t e a d i l y d u r i n g t h e p e r i o d . N e v e r t h e l e s s , s u b s t a n -t i a l p r o b l e m s and c h a l l e n g e s r e m a i n e d i n f i n d i n g an e f f e c t i v e i n d u s t r i a l d e v e l o p m e n t p o l i c y and i r o n i n g o u t t h e p r o b l e m s i n m a n a g e r i a l r e f o r m s b e i n g c o n s i d e r e d o r a l r e a d y a d o p t e d . A t t h e end o f 1979, weak i n f r a s t r u c t u r a l c a p a c i t y was s t i l l b e i n g i d e n t i f i e d a s a c o n s t r a i n t upon f u r t h e r i n d u s t r i a l g r o w t h ; i n some, i n s t a n c e s , c o n d i t i o n s were worse t h a n t h e y h a d been t h r e e y e a r s b e f o r e . By 1979, many p l a n t s i n Guangdong and F u j i a n were o p e r a t i n g o n l y f o u r d a y s a week due t o power s h o r t a g e s , and some p l a n t s were f o r c e d t o s u s p e n d p r o d u c t i o n e n t i r e l y . 1979 - 44 -FBIS entries were s t i l l repeatedly calling for more steel, more electric power, more fuel, and more raw material production, and characterizing their poor production as weak links in the nation's 68 economy. The rapid retraction of capital construction projects needed to expand infrastruetural capacities after issuance of the 1976-1985 Ten Year Plan suggests that these problems could remain for some time. As well as internal industrial growth, such problems could also affect the government's efforts to attract foreign investment (e.g., complaints about poor transportation and other infrastructural f a c i l i t i e s in Special Economic Zones). Shortages of trained workers and technical operators also needed to be addressed. Much of Chinese industry was (and is) not automated; the incorporation of new technology poses serious manning and training problems in managerial policy. On one side, lack of such a group of skilled workers impairs Chinese abi l i t y to assimilate new technology; on the other, the creation of a new, probably young, advanced group of skilled workers presents managerial problems in handling senior, but less proficient, workers, particularly workers and cadres now disadvantaged by their lack of education during the Cultural Revolution and unable to advance further under the accustomed c r i t e r i a . Another future managerial need at the end of the 1977-1979 period was the stabilization of material incentive policies. Throughout the latter two years, incentives continued to increase, with no signs of leveling off. Government broadcasts repeatedly referred to popular opinions that the incentives, as of late - 45 -1979, were not s u f f i c i e n t to s t i m u l a t e p r o d u c t i v i t y i n the manner hoped f o r , and t h a t there was impatience a t the c a u t i o u s nature of reforms and a t experiments which, though presented as s u c c e s s f u l , s t i l l remained experiments r a t h e r than broadly 69 implemented new d i r e c t i v e s . The reforms and experiments of 1977-1979 d e s c r i b e d here p r o v i d e a base from which f u r t h e r experiments, reforms, and models f o r emulation might proceed. The o r g a n i z a t i o n a l p o l i c i e s adopted were a n t i c i p a t e d to take a l o n g time to implement u n i f o r m l y a c r o s s Chinese i n d u s t r y . R e o r g a n i z a t i o n of the a g r i c u l t u r a l machinery i n d u s t r y , f o r i n s t a n c e , was expected to r e q u i r e two to t h r e e y e a r s f o r f u l l implementation i n the most advanced areas,^° and presumably much l o n g e r i n the l e s s developed p r o v i n c e s . The implementation of m a t e r i a l i n c e n t i v e reforms, too, was f a c e d w i t h v a r i o u s problems and d e l a y s , even as experimental e n t e r p r i s e s p r e s s e d f o r t h with f u r t h e r i n n o v a t i o n s and g r e a t e r i n d i v i d u a l o p p o r t u n i t i e s i n t h e i r i n c e n t i v e p o l i c i e s . However, the experiences gained by these e a r l y reform e f f o r t s might not have been f u l l y a p p l i c a b l e a c r o s s a l l of Chinese i n d u s t r y . The government's r a t i o n a l e f o r a slow, g r a d u a l process of e x p e r i -mentation has been a d e s i r e to a v o i d the debacles of p a s t reform e f f o r t s (such as the Great Leap Forward) by l e a r n i n g the r e p e r -c u s s i o n s of and t u n i n g the mechanisms of reforms before broadly implementing them. F o r i n i t i a l experiments, though, g e n e r a l l y a l r e a d y very advanced e n t e r p r i s e s have been chosen f o r p a r t i c i -p a t i o n . T h i s l e a v e s unanswered not only the q u e s t i o n of the - 46 -appropriateness of a given measure once implemented universally, but also whether the generally favourable results of experiments are due less to the nature of the new policy than to the prosperous t r i a l enterprises selected. The nature of promulgated reforms has been generated by p o l i t i c a l as well as economic r e a l i t i e s . The slow process of policy evolution has continued in response both to experimental results and to the lack of consensus among and changing nature of the leadership i t s e l f . The July 1977 restoration of Deng Xiaoping had a marked effect upon the emphasis upon material incentive policy; Deng's gradual assumption of p o l i t i c a l control through the period at the expense of Hua Guofeng was also reflected in a growing emphasis upon planning policies and bureaucratic reform. Provincial p o l i t i c a l considerations also often played a determining role in the nature of reform policies implemented. Those policies have continued to change in recent years, as have the strengths of the p o l i t i c a l actors promoting them. Deng Xiaoping has further consolidated his p o l i t i c a l power, promoting followers into key positions and adopting measures to combat the endless layers of bureaucracy which plague the industrial planning process (along with the rest of Chinese government) and have impeded the progress of reforms. Premier Zhao's work report to the fourth session of the f i f t h National People's Congress, in December 1981, continued to address industrial management problems of excessive stockpiling and specialization, with cal l s to "continue the all-round consolidation and necessary restructuring - 47 -o f e n t e r p r i s e s by g r o u p s " and e n f o r c e m e n t o f a " s y s t e m o f e c o n o m i c r e s p o n s i b i l i t y " p e n a l i z i n g w a s t e f u l o r u n p r o f i t a b l e p l a n t s . F u r t h e r s t e p s had been t a k e n t o p r o v i d e p l a n n i n g f l e x i b i l i t y f o r l o c a l e n t e r p r i s e s . N o t i c e a b l y a b s e n t were 71 r e f e r e n c e s t o i n c e n t i v e p o l i c i e s . The f a c t t h a t , a f t e r f i v e y e a r s o f t r i a l , many e x p e r i m e n t a l r e f o r m s a r e s t i l l e x p e r i m e n t a l i n n a t u r e , i n d i c a t e s a c o n t i n u i n g i n d e c i s i o n and v a r i a b i l i t y among C h i n e s e l e a d e r s a s t o f u t u r e d e v e l o p m e n t a l s t r a t e g i e s . N o t a b l y , t h e use of a measure o f l o c a l l a t i t u d e i n e x p e r i -m e n t a t i o n i n i t s e l f g a i n e d a c c e p t a n c e i n 1977-1979 a s a method o f g e n e r a t i n g and p o p u l a r i z i n g i n n o v a t i o n s . W h i l e , i n 1977, S i c h u a n and o t h e r p r o v i n c e s whose p o l i c i e s showed d e v i a t i o n s f r o m t h e n a t i o n a l s t a n d a r d s were c a u t i o u s l y vague a b o u t t h e i r d e s c r i p t i o n s , by 1979 p r o v i n c i a l e x p e r i m e n t s were b e i n g much more o p e n l y r e p o r t e d , u s u a l l y a l o n g w i t h c a v e a t s t h a t t h e s e new i n n o v a t i o n s were, a f t e r a l l , o n l y e x p e r i m e n t s , and w o u l d r e m a i n so u n t i l t h e i r i m p e r f e c t i o n s were s o l v e d . The n e x t l o g i c a l s t e p i n t h i s g r a d u a l e x p a n s i o n o f l o c a l autonomy w o u l d be t h e open r e p o r t a g e o f a c t u a l p o l i c y w h i c h d i f f e r e d f r o m t h a t a t t h e c e n t r e ; however, no i n d i c a t i o n s o f t h i s were n o t i c e d t h r o u g h t h e c l o s e o f 1979. C e r t a i n l y , i m p e r f e c t i o n s do, i n d e e d , e x i s t i n t h e r e f o r m s and i n n o v a t i o n s p r o m u l g a t e d t h r o u g h 1979. T h r e e m a j o r c a t e g o r i e s o f them a r e i d e n t i f i a b l e : 1) A t l e a s t two c o n s t i t u e n c i e s e x i s t w h i c h make imp l e m e n t -a t i o n o f e f f i c i e n t , p r o d u c t i o n - o r i e n t e d r e f o r m s p o t e n t i a l l y more - 48 -d i f f i c u l t . The f i r s t o f t h e s e i s t h e l a r g e number o f w o r k e r s and c a d r e s e d u c a t e d and b r o u g h t i n t o t h e l a b o u r s y s t e m u n d e r t h e C u l t u r a l R e v o l u t i o n . These w o r k e r s , h a v i n g been r a i s e d w i t h an i d e o l o g y many o f whose t e n e t s a r e now c o n t r a d i c t e d and s c o r n e d by C h i n e s e l e a d e r s h i p , f i n d t h e m s e l v e s d i s a d v a n t a g e d by t h e new c r i t e r i a f o r p r o m o t i o n , g r o u p l e a d e r s h i p , and e v e n pay s c a l e s , a n d t h r e a t e n e d i n t h e i r a b i l i t y t o k e e p p o s i t i o n s a l r e a d y a t t a i n e d . Communist P a r t y membership more t h a n d o u b l e d d u r i n g t h e t e n y e a r s o f t h e C u l t u r a l R e v o l u t i o n , and i t i s u n l i k e l y t h a t a l l o f t h e s e w o r k e r s have become e n t h u s i a s t i c c o n v e r t s t o t h e p o l i c i e s o f t h e new l e a d e r s h i p . A t t h e l e a s t , t h e y p o s e a p o l i t i c a l l i m i t t o t h e s p e e d w i t h w h i c h r e f o r m s c a n be p u r s u e d . The s e c o n d g r o u p t h a t p o s e s o b s t a c l e s t o r e f o r m i m p l e m e n t -a t i o n i s b u r e a u c r a c y , b o t h t h a t o f t h e s t a t e and t h a t o f i n d i v i -d u a l e n t e r p r i s e s . Any o r g a n i z a t i o n , p a r t i c u l a r l y a v e r y l a r g e one l i k e t h e C h i n e s e g o v e r n m e n t , has a c e r t a i n r e s i s t a n c e t o c h a n g e . T h a t r e s i s t a n c e c a n o n l y be h e i g h t e n e d by t h e n a t u r e o f t h e o r g a n i z a t i o n a l r e f o r m s o f 1977-1979, w h i c h , i n d i s c o u r a g i n g r e l i a n c e upon v e r t i c a l h i e r a r c h i e s a n d u n c l e a r o r o v e r l a p p i n g a d m i n i s t r a t i v e j u r i s d i c t i o n s , e n c o u r a g i n g l o c a l d e c i s i o n - m a k i n g autonomy, a n d e m p h a s i z i n g m a n a g e r i a l e f f i c i e n c y , p o s e a d i r e c t t h r e a t t o t h e power and p o t e n t i a l power o f t h e b u r e a u c r a c y . One o f t h e d i f f i c u l t i e s e x p e r i e n c e d i n t h e S i c h u a n s e l f - m a n a g e m e n t e x p e r i m e n t s was t h e c o n f l i c t between p l a n t managers and s t a t e p l a n n e r s o v e r c o n t r o l o f t h e a l l o c a t i o n o f t h e p l a n t ' s s h a r e o f i t s a c c u m u l a t e d p r o f i t s , a dilemma f o r w h i c h no s o l u t i o n s were - 49 -72 o f f e r e d . O l d p r a c t i c e s o f o v e r l a p p i n g and c o n f u s e d a u t h o r i t y , w h i l e i n e f f i c i e n t f o r m a n a g e r i a l p u r p o s e s , gave " s o m e t h i n g t o e v e r y o n e " i n a way t h a t t h e new s y s t e m does n o t . 2) A n o t h e r f a c e t o f i n t e r e s t i n t h e S i c h u a n e x p e r i m e n t s , r e l e v a n t t o many o f t h e o t h e r m e asures employed d u r i n g t h e p e r i o d a n d y e t t o be s a t i s f a c t o r i l y r e s o l v e d , was t h e s t r u g g l e t o f i n d a c c e p t a b l e ways t o i n t e g r a t e m a r k e t c h a r a c t e r i s t i c s w i t h a c e n t r a l i z e d , p l a n n e d economy. T h i s m a n i f e s t s i t s e l f i n a number o f ways. J o b s e c u r i t y and t h e p r o v i s i o n i n a s o c i a l i s t s o c i e t y o f a p l a c e i n t h e work f o r c e f o r a l l w o r k e r s has y e t t o be r e c o n c i l e d w i t h t h e n o t i o n o f s a n c t i o n s s u c h as i n d i v i d u a l f i r i n g s and p l a n t c l o s u r e s f o r p o o r p r o d u c t i v i t y . I m p l e m e n t a t i o n o f s u c h s a n c t i o n s c o u l d i m p a i r t h e s t a t e ' s a b i l i t y t o c o n t r o l i t s j o b m a r k e t , a n d e x a c e r b a t e p r o b l e m s o f u r b a n unemployment. The e n t i r e i s s u e o f t h e p o l i c y o f f i x e d p r i c e s , and t h e l i n k i n g t o g e t h e r o f p r o f i t a b i l i t y w i t h judgements o f o u t p u t when f i x e d p r i c e s may p r e d e t e r m i n e t h e r e s u l t s r e g a r d l e s s o f e n t e r -p r i s e p r o f i t a b i l i t y , a l s o f a l l s u n d e r t h i s h e a d i n g . The n a t u r e o f r e f o r m s a l r e a d y i m p l e m e n t e d s t r o n g l y s u g g e s t s a r e v i s i o n o f p r i c e l a w s i n o r d e r t o r e f l e c t m a r k e t v a l u e s more c l o s e l y , i f o n l y by more f r e q u e n t and p e r h a p s a u t o m a t i c r e a d j u s t m e n t o f f i x e d p r i c e s . However, t h e s i z e o f t h a t t a s k , and i t s e f f e c t upon t h e s o c i a l i s t g o a l o f s t a t e s u p p o r t f o r a l l c i t i z e n s , may make s u c h r e f o r m s p r o h i b i t i v e . The d e s i r e t o i n c l u d e a g r e a t e r r o l e f o r m a r k e t f o r c e s i n C h i n a ' s p l a n n e d economy h a s a l s o been l a r g e l y r e s p o n s i b l e f o r - 50 -moves to give local enterprises greater f l e x i b i l i t y in their determination of production and marketing policies. This, too, has riot been easily reconciled with the goal of increasing state centralization and efficiency in planning. By 1979, inflation had also become a problem in China, as the government was unable completely to finance i t s massive expenditures in increased wages, bonuses, and commodity prices. Should the problem escalate, i t would negate much of what incentive programmes had hoped to accomplish, in a circular fashion familiar to most capitalist economies. 3) Perhaps the most important characteristic, and potential p i t f a l l for reformists, i s the potential irreversible nature of reforms that a continuation of experiments and reforms undertaken in 1977-1979 would engender. While workers raised under an egali-tarian system might adapt to a system of material incentives, the reverse process would be more d i f f i c u l t to enforce. Broadcasts which stress that the experiments of the period remain tentative, and are flexible enough to evolve should d i f f i c u l t i e s arise, overlook the loss of f l e x i b i l i t y that the process of experiment-ation i t s e l f leads to. This i r r e v e r s i b i l i t y manifests i t s e l f in two separate ways. One is the almost narcotic lure of additional income and additional consumer goods (for individuals) and foreign investment capital (for state planners). A recent report indicates that along with • heightened prosperity and additional freedoms in the Special Economic Zone of Shenzhen have come many of the social i l l s of - 51 -73 Hong Kong,' such as p r o s t i t u t i o n , gambling, and pornography. The experience of a number of underdeveloped c o u n t r i e s has demonstrated the d i f f i c u l t y of c o n t r o l l i n g the terms under which f o r e i g n c o u n t r i e s and c o r p o r a t i o n s i n v e s t i n l o c a l economies. Such investment has o f t e n l e d to widespread poverty and l a r g e income d i s p a r i t i e s among i n d i v i d u a l s , and compromise of the n a t i o n a l economic i n t e g r i t y of host c o u n t r i e s . While China i s u n u s u a l l y w e l l equipped, i n terms of both resources and c e n t r a l i z e d governmental s t r u c t u r e , to impose s t r i c t s t a t e c o n t r o l s upon the development p r o c e s s , the danger of a l o s s of such c o n t r o l i s s t i l l p r e s e n t . Should the Chinese, a t some f u t u r e p o i n t , decide t h a t the i n c r e a s e d p r o d u c t i v i t y brought by a given l e v e l of i n c e n t i v e s i s not worth the s o c i a l c o s t s , or i s not d e s i r a b l e i n terms of the f o r e i g n commitments necessary, they may f i n d the i n c e n t i v e "experiment" to have taken on a l i f e of i t s own. S i m i l a r l y , i t i s d i f f i c u l t to imagine a r e t u r n to the near-autarky of p r e v i o u s Chinese modernization p o l i c i e s once a c e r t a i n l e v e l of f o r e i g n commitments have been entered upon. The balance between autarky and complete interdependence w i t h f o r e i g n economies must s t i l l be found. Secondly, the process of experimentation and l o c a l autonomy i t s e l f may be i r r e v e r s i b l e . The conscious e f f o r t by the new Chinese l e a d e r s h i p to d e p o l i t i c i z e managerial p o l i c y i m p l i e s t h a t , r e g a r d l e s s of whether a development course along c u r r e n t l i n e s or an e n t i r e l y d i f f e r e n t model i s e v e n t u a l l y adopted, i t - 52 -i s most l i k e l y to be judged on the b a s i s of e f f i c i e n c y r a t h e r than s t r i c t l y i d e o l o g y . While the s t a t e s t r i v e s to i n c r e a s e the c e n t r a l i z a t i o n and c o o r d i n a t i o n of p l a n n i n g , the decrease i n d i r e c t s t a t e c o n t r o l of l o c a l p o l i c y (through g r e a t e r l o c a l autonomy and c o n t r o l of percentages of s t a t e a l l o c a t i o n s ) , i f c a r r i e d through on a widespread b a s i s , would a l s o be d i f f i c u l t t o r e g a i n . Moreover, the s t a t e ' s very d e p o l i t i c i z a t i o n would make the type of i d e o l o g i c a l campaigns used to r a l l y support to n a t i o n a l causes i n the past l e s s p r a c t i c a b l e . In t r i g g e r i n g the s e r i e s of reforms and experiments d e s c r i b e d i n t h i s paper, the new Chinese l e a d e r s h i p has moved c a u t i o u s l y and was c a r e f u l to keep as many a l t e r n a t i v e p o l i c y d e c i s i o n s as p o s s i b l e open. However, without having f i x e d upon a s i n g l e g u i d i n g s t r a t e g y , by simply i n v i g o r a t i n g the process of reform, China may have c l o s e d o f f more o p t i o n s than i t would l i k e . « - 53 -FOOTNOTES 1 This was a specific directive promulgated by Chairman Hua Guofeng at the December 1976 national Learning from Dazhai conference, and in January 1977 was being busily propagated throughout the lower levels by provincial and local o f f i c i a l s . 2 ^Foreign Broadcast Information Service, People's Republic of China, Daily Report (hereafter referred to as FBIS), Feb. 1, 1977, p. E10; FBIS, April 20, 1977, pp. E1-5. 3 Cheng, "The Modernization of Chinese Industry," pp. 26-28; Smil, "China's Energy Technology," pp. 209-212. 4 Cheng, op. c i t . , p. 22. 5 FBIS, Mar. 2 7 , 1979, pp. L8-14; FBIS, June 1, 1979, pp. L5-14; FBIS, June 22, 1979, p. L7. 6 While the movement was s t i l l o f f i c i a l l y in place, Daqing meetings and conferences were quietly discouraged in 1979. FBIS, Feb. 2, 1979, p. E30; FBIS, June 1, 1979, p. 02. 7 China Trade Report, Vol. XV (Nov. 1977), p. 6 reports of one factory in Xian which had reduced compulsory p o l i t i c a l study to 1-^  hours per week, focusing only upon current major p o l i -t i c a l directives. See also FBIS, Feb. 2 7 , 1979, p. L1. One letter to the People's Daily newspaper from a basic-level secretary complained of spending 99 of the f i r s t 130 days of 1977 in meetings. FBIS, May 26, 1977, p. E20-21. 8 Fingar, "Recent Policy Trends in Industrial Science and Technology," p. 73. 9 FBIS, Jan. 9, 1978, pp. E1-10. See also FBIS, Jan. 25, 1978, p. E12-13. A January 1978 Red Flag a r t i c l e , in addition to touting the "principle of specialized cooperation," also issued a c a l l to "use price laws to serve socialism" (by letting market demands help determine supply prices) - another anomalous suggestion for reform that didn't receive f u l l attention for another two years. (A c a l l in the same article to punish nonprofitable enterprises was also notable.) Red  Flag No. 1, Jan. 1978; FBIS, Jan. 20, 1978, pp. E11-14. 10 FBIS, Jan. 31, 1978, pp. E15-23 contains the f u l l l i s t of proposed measures. 11 FBIS, Aug. 28, 1978, p. E9 - 54-12 Cheng, op. c i t . , pp. 29-32. 13 Andors, "The P o l i t i c a l and Organizational Implications of China's New Economic Policies," p. 48. 14 FBIS, Oct. 11, 1978, pp. E1-22 provides a good example; see also FBIS, Jan. 24, 1979, p. E13-14; FBIS, June 2, 1977, pp. E13-16. 15 Fingar, op. c i t . , p. 73-74; FBIS, May 24, 1978, p. E1-2. 16 Andors, op. c i t . , p. 51; FBIS, Oct. 11, 1978, p. E13-14. 17 EBIS, Aug. 4, 1978, pp. E13-15. 18 Rawski, "Strengths, Weaknesses, and Challenges for Policy in China!s Industry Today," p. 59-60. 19 Prybyla, "Changes in the Chinese Economy," p. 424-425; Cheng, op. cit.,.p. 35; Andors, op. c i t . , p. 52; Fletcher, "Industrial Relations in China," p. 85. 20 FBIS, Feb. 23, 1979, pp. E5-8; FBIS, Mar. 11, 1979, p. E10-11. 21 Dong, "Instituting an Intrafactory Economic Contract System is a Good Device to Strengthen Business Management," contains a good description of this. •22 FBIS, Apr. 22, 1980, p. P 3 ; bureaucratic resistance i s also discussed in Suttmeier, "Po l i t i c s , Modernization, and Science in China," pp. 26-28. 23 Shirk, "Recent Chinese Labour Policies," p. 576-577. 24 Rawski, op. c i t . , p. 38. 25 c f . FBIS, Nov. 13, 1979, p. 02; FBIS, Dec. 12, 1979, p.,Q1-2; FBIS, Feb. 26, 1979, p. L14; also Fingar, op. c i t . , p. 75. 26 FBIS, Sept. 21, 1977, p. E7; FBIS, Oct. 14, 1977, p. E9-10; f i r s t direct mention by the Chinese government appears in FBIS, Nov. 10, 1977, p. E5-6. See also Cheng, op. c i t . , p. 32; Prybyla, op. c i t . , p. 426. 27 Guangming Daily, Aug. 15, 1977, in FBIS, Aug. 26, 1977, p. E4-5; Guangming Daily, Nov. 21, 1977, in FBIS, Dec. 2, 1977, pp. E13-18. 28 Guangming Daily, Nov. 21, 1977, in FBIS, Dec. 2, 1977, pp. E13-18. - 55 -29 FBIS, May 21, 1979, p. L7-9; Fingar, op. c i t . , p. 78; Schultz, "The Four Modernizations Reconsidered," p. 277; Shirk, op. c i t . , pp. 576-582, describes problems in implementing this line, similar to the problems incurred in determining the recipients of bonuses. 30 FBIS, Nov. 22, 1978, p. E27-28; Prybyla, "Key Issues in the Chinese Economy," p. 936; also Cheng, op. c i t . , p. 39; also Shirk, op. c i t . , pp. 585-587. 31 Shirk, op. c i t . , p. 586. 32 FBIS, May 8, 1978, p. L4; also FBIS, Oct. 11, 1978, pp. E1-22; also FBIS, July 26, 1978, p. E10-11. 33 Cheng, op. c i t . , p. 35-36. 54 Red Flag no. 1, Jan. 1978; FBIS, Jan. 20, 1978, pp. E11-14. 35 Shirk, op. c i t . , pp. 576-577, 592-593. 36 Christian Science Monitor, Jan. 27, 1982, p. 8, contains a good report on these pressures. Prybyla, "Key Issues...," op. c i t . , p. 936, and quotes (p. 941) a Hua-issued figure of 7.4% urban unemployment in 1979, mostly among educated?:youth. Also see Whyte, "Inequality and Stratification in China," p. 686-687; also Nolan & White, "Distribution and Development in China," p. 4-5. 37 Red Flag, no. 8, Aug. 1977, in FBIS, Aug. 31, 1977, pp. E1-3; Cheng, op. c i t . , p. 35. A February 1978 Qinghai rally dated the beginning of the campaign as in July 1977. FBIS, Mar. 8, 1978, p. M2-3. 38 A l i s t of the c r i t e r i a , with explanations, appears in FBIS, Aug. 8, 1978, p. E4-5. 39 China Trade Report, Vol. XVII, Aug. (1979), p. 5; Sept. 1979, p. 10. 40 Cheng, op. c i t . , p. 37. 41 Dong, "Some Problems Concerning the Chinese Economy," p. 730. 42 ibid, p. 729. 43 Fingar, op. c i t . , p. 87-88. 44 e.g., FBIS, Dec. 21, 1979, p. P2-3. See also Prybyla, "Key Issues...," op. c i t . , p. 940. - 56 -45 An excellent example appear in FBIS, Jan. 28, 1977, pp. K2-16, in which the work report of an Inner Mongolian Dazhai conference, in addition to citing gains made since liberation in l i v i n g standards, emphasizes rural commune and sideline enterprises as ways to further improve the masses' livelihoods. The mass relocation of ethnic Hans to the border areas, especially in Nei Monggol, Xizang, and Xinjiang, was also used to "Sinify" them. 46 For additional information on the Special Economic Zones, see U.S. Dept. of Commerce, Doing Business With China, p. 19; China Trade Report, Vol. XVII (Dec. 1979), pp. 7-10. 47 Field, et a l , Provincial Industrial Output in the People's  Republic of China 1949-1975, provides a useful source of provincial industrial information through 1975. While FBIS reports provincial outputs, i t does so in a very unsystematic (and doubtless incomplete)'way. The Chinese government's stated policy after mid-1979 of making economic stati s t i c s more readily available than before w i l l hopefully help alleviate this problem in the future. 48 e.g., FBIS, May 12, 1977, p. G1. The Anhui provincial Party f i r s t secretary was replaced and denounced as a follower of the Gang of Four the following July. FBIS, Mar. 22, 1977, p. J1, in a piece on rural enterprises, Sichuan Daily calls for, among other things, fighting the idea that "agriculture is a losing business," and to "decide in a rational way on items for and speed of development, make a success of manage-ment, insure smooth flow between production and consumption." 49 FBIS, Mar. 22, 1977, p. J1; FBIS, May 4, 1977, pp. J1-4; FBIS, June. 30, 1977, p. J3-4; FBIS, Aug. 12, 1977, p. J1-2; FBIS, Sept. 16, 1977, p. J1. 50 FBIS, Jan. 3, 1978, p. J5-6. 51 "A Portrait of Chao Tzu-Yang," Issues and Studies, Oct. 1980, p. 2; also Rawski, op. c i t . , pp. 160-164; FBIS, July 31, 1979, pp. Q2-4. 52 "A Portrait...," op. c i t . , p. 2; Also FBIS, Mar. 12, 1979, p. J2-3; FBIS, Mar. 13, 1979, p. J2. 53 FBIS, June 22, 1977, p. M3-4; FBIS, Sept. 8, 1977, pp. M1-4; FBIS, Feb. 4, 1977, pp. G7-22; FBIS, Jan. 9, 1978, pp. E1-10; FBIS, Jan. 25, 1978, p. E12-13. 54 Lin Z i l i , " I n i t i a l Reforms in China's Economic Structure: The Experiments in Giving Autonomy to Enterprises in Sichuan, Anhui, and Zhejiang Provinces," in Social Sciences in China, vol. 1, no. 3, (Sept. 1980) pp. 172--194, contains a good o f f i c i a l description - 57 -of the reforms. See also Rawski, op. c i t . , p. 159-160; .FBIS, Mar. 31, 1977, pp. L8-H; FBIS, Apr. 4, 1977, pp. L4-9; FBIS, Apr. 15, 1977, pp. L7-9; and FBIS, July 12, 1977, pp. L3-16. 55 FBIS, Mar. 19, 1979, p. 83. 56 As a start, FBIS, Dec. 2, 1977, pp. H5-8; FBIS, Dec. 28, 1977, pp. H1-12; FBIS, Feb. 15, 1978, p. H5-6; FBIS, Mar. 6, 1978, p. H1-2; FBIS, Mar. 15, 1978, p. H8-9; FBIS, Mar. 21, 1978, p. H4-5; FBIS, Mar. 22, 1978, p. H4-5; FBIS, Feb. 7, 1978, p. E16; FBIS, Dec. 21, 1979, p. P2-3. 57 FBIS, Feb. 7, 1978, p. E16. 58 China Trade Report, vol. XVI (May 1978), p. 5. Unusual activity in the.border town of Shenzhen was also noted, yielding rumours that the semi-annual Canton export trade f a i r would move there. 59 China Trade Report, vol. XVII (May 1979), p. 12. 60 Later, in May 1979, the Chinese government announced laws to allow foreign investment in joint ventures throughout China. See also U.S. Dept. of Commerce, Doing Business With China, P. 19. 61 China Trade Report, vol. XVII (Dec. 1979), pp. 7-10. 62 Rawski, op. c i t . , pp. 235-243. 63 FBIS, Sept. 22, 1978, pp. E3-5. 64 Beijing Review, No. 34 (Aug. 25, 1978), p. 23. 65 Falkenheim, "Administrative Reform and Modernization in Post-Mao China," p. 15-16. 66 Rawski, op. c i t . , p. 240. 67 c f . FBIS, Nov. 13,1978, p. 08-9. 68 Cheng, op. c i t . , p. 39-40; see also FBIS, May 21, 1979, p. L6; FBIS, June 1, 1979, p. L10-11. 69 China Trade Report, vol. XVII (Dec. 1979), pp. 7-10; also Cheng, op. c i t . , p. 39; also Christian Science Monitor, Nov. 25, 1981, p. 2. 70 FBIS, Sept. 22, 1978, pp. E3-5. 71 Beijing Review, no. 51 (Dec. 21, 1981), pp. 6-36. - 58 -72 Rawski, op. c i t . , pp. 160-164; FBIS, Mar. 12, 1979, p. J2-3. 73 Vancouver Sun, Apr. 22, 1982, p. B10. - 59 -BIBLIOGRAPHY Adams, Jean W., "The Utilization of 'Surplus 1 Labor in the People's Republic of China,". Bulletin of Concerned Asian Scholars, Vol. 11, No. 4 (Oct.-Dec. 1977), pp. 51-63. Andors, Stephen, "The P o l i t i c a l and Organizational Implications of China's New Economic Policies, 1976-1979," Bulletin of Concerned  Asian Scholars, Vol. 12, No. 2 (Apr.-June 1980), pp. 44-57. Andors, Stephen, China's Industrial Revolution: P o l i t i c s , Planning  and Management, 1949 to the Present; New York: Pantheon Books, T97T. : Ch'en Po-Wen, "Rising Prices and Wages in Mainland China: An Analysis," Issues and Studies, Vol. XVI #2 (Feb. 1980), pp. 30-45. Ch'en Ting-Chung, "Possible Changes in the People's Commune System," Issues and Studies, Vol. XVI #1 (Jan. 1980), pp. 4-7. Cheng Chu-yuan, "The Modernization of Chinese Industry," in Baum, Richard, China's Four Modernizations: The New Technological  Revolution; Boulder: Westview Press, 1980, pp. 21-48. China Trade Report, monthly issues, Jan. 1977-June 1980 (Vol. Dong Fureng, "Some Problems Concerning the Chinese Economy," China  Quarterly, #84 (Dec. 1980), pp. 727-736. Dong Yusheng, "Instituting an Intrafactory Economic Contract System is a Good Device to Strengthen Business Management," Chinese  Economic Studies, Vol. XV, No. 1 (Fall 1981), pp. 38-?6*T Falkenheim, Victor C , "Administrative Reform and Modernization in Post-Mao China," Pacific Affairs, Vol. 53, No. 1 (Spring 1980), pp. 5-28. Far Eastern Economic Review, weekly issues, Jan. 1977-Dec. 1979. Field, Robert M.; Landy, Nicholas R.; and Emerson, John P., Provincial Industrial Output in the People's Republic of China  1949-1975; Washington: U.S. Dept. of Commerce, 1976. Fingar, Thomas, "Recent Policy Trends in Industrial Science and Technology," in Baum, op. c i t . , pp. 61-101. Fletcher, M.D., "Industrial Relations in China: The New Line," Pacific Affairs, Vol. 52, No. 2 (Summer 1979), pp. 78-94. Foreign Broadcast Information Service: People's Republic of China (Daily Report), daily issues except weekends and American holidays, Jan. 1977-June 1980. - 60 -G e l b e r , H a r r y G., " E c o n o m i c s and T e c h n o l o g y i n C h i n a a f t e r Mao," A s i a n S u r v e y , V o l . X V I I I , No. 9 ( S e p t . 1978), pp. 967-979. H e r s c h e d e , E r e d , " H i g h e r E d u c a t i o n and t h e E x p a n s i o n o f T e c h n i c a l l y Q u a l i f i e d I n d u s t r i a l W o r k e r s D u r i n g C h i n a ' s M o d e r n i z a t i o n , 1976-1985," B u l l e t i n o f C o n c e r n e d A s i a n S c h o l a r s , V o l . 11, No. 3 ( J u l y -S e p t . 1979), pp. 64-71. : Hsu, R o b e r t C., " A g r i c u l t u r a l M e c h a n i z a t i o n i n C h i n a : P o l i c i e s , P r o b l e m s , a n d P r o s p e c t s , " A s i a n S u r v e y , V o l . X IX, No. 5 (May 1979), pp. 436-449. Hung Y u - C h i ' a o , " E c o n o m i c P l a n n i n g and E c o n o m i c P r o b l e m s o f Communist C h i n a , " I s s u e s and S t u d i e s . V o l . X I V #5 (May 1978), pp. 25-44. Hung Y u - C h i ' a o , "The E c o n o m i c S i t u a t i o n i n M a i n l a n d C h i n a : An A n a l y s i s , " I s s u e s and S t u d i e s , V o l . X I I I #12 ( D e c . 1977), pp. 28-40. I s s u e s a n d S t u d i e s , "A P r o f i l e o f Chao T z u - Y a n g , " V o l . X V I , #10 ( O c t . ~ 1980), pp. 2-5. J i C h i n g w e i & Wang Z h e n z h i , "On t h e Q u e s t i o n o f I n c r e a s i n g E n t e r p r i s e E a r n i n g s and A c c e l e r a t i n g C a p i t a l A c c u m u l a t i o n , " C h i n e s e E c o n o m i c  S t u d i e s , V o l . X I I , No. 4 (Summer 1979), pp. 69-94. J i Z h e n g z h i , " P r o b l e m R e g a r d i n g t h e F o r m a t i o n o f S o c i a l i s t P l a n n e d P r i c e , " C h i n e s e E c o n o m i c S t u d i e s , V o l . X I I I , No. 3 ( S p r i n g 1980), pp. 96-rtY. L i u Guoguang & Zhao R e n w e i , "On t h e R e l a t i o n s Between P l a n n i n g and t h e M a r k e t i i n t h e S o c i a l i s t Economy," C h i n e s e E c o n o m i c S t u d i e s , V o l . X I I I , No. 4 (Summer 1980), pp. 3-TT, Mack, Andrew; P l a n t , D a v i d ; & D o y l e , U r s u l a ; I m p e r i a l i s m , I n t e r -v e n t i o n , and D e v e l o p m e n t , pp. 345-393; Croom Helm, L o n d o n , 1979. M a i e r , J o h n H., " I n f o r m a t i o n T e c h n o l o g y i n C h i n a , " A s i a n S u r v e y , V o l . 20, No. 8 (Aug. 1980), pp. 860-875. Ng Gek-boo, "The Commune S y s t e m a n d Income I n e q u a l i t y i n R u r a l C h i n a , " B u l l e t i n o f C o n c e r n e d A s i a n S c h o l a r s , V o l . 11, No. 3 ( J u l y - S e p t . 1979), pp. 51-63. N o l a n , P e t e r . A . , & W h i t e , G o r d o n , " D i s t r i b u t i o n and D e v e l o p m e n t i n C h i n a , " B u l l e t i n o f C o n c e r n e d . A s i a n S c h o l a r s , V o l . 13, No. 3 ( J u l y - S e p t . 1981), pp. 2-18. P e k i n g R e v i e w , w e e k l y i s s u e s J a n . 1977-Dec. 1978. P r y b y l a , J a n S., "Changes i n t h e C h i n e s e Economy: An I n t e r p r e t a t i o n , " A s i a n S u r v e y , V o l . XIX, No. 5 (May 1979), pp. 409-435. i - 61 -Prybyla, Jan S., "Key Issues in the Chinese Economy," Asian Survey, Vol. XXI, No. 9-(Sept. 1981), pp. 925-946. Prybyla, Jan S., "Some Economic Strengths and Weaknesses of the People's Republic of China," Asian Survey, Vol. XVII, No. 12 (Dec. 1977), pp. 1119-1142.. Pye, Lucian W., The Spirit of Chinese P o l i t i c s ; A Psychocultural Study of the Authority Crisis in P o l i t i c a l Development; Cambridge: M.I.T. Press, 1968. '. Rawski, Thomas G., Strengths, Weaknesses, and Challenges for Policy in China's Industry Today; unpublished consultant's report, Aug. Schultz, Jeffrey, "Conclusion: The Four Modernizations Reconsidered," in Baum, op. c i t . , pp. 267-287. Schurmann, Franz, Ideology and Oreganization in Communist China (2nd ed.); Berkeley: Univ. of California Press, 1968. Shirk, Susan L., "Recent Chinese Labor Policies and the Transforma-tion of Industrial Organization in China," China Quarterly, #88 Dec. 1981, pp. 575-593. Smil, Victor, "China's Energy Technology," in Baum, op. c i t . , pp. 207-233. Suttmeier, Richard P., "Pol i t i c s , Modernization, and Science in China," Problems of Communism, Vol. 30, Jan.-Feb. (1981), pp. 22-36. Townsend, James R., Pol i t i c s in China; Boston: L i t t l e , Brown, 1979. U.S. Congress Joint Economic Committee, China: A Reassessment of  the Economy; Washington: U.S. Government Press, July 1975. U.S. Dept. of Commerce, International Trade Administration, Doing  Business with China; Washington: U.S. Government Press, Nov. 1980. U.S. National Foreign Assessment Center, China: The Continuing  Search for a Modernization Strategy, Washington: U.S. Government Press, 1980. Vo l t i , Rudy, "The Absorption and Assimilation of Acquired Techno-logy," in Baum, op. c i t . , pp. 179-201. Walder, Andrew G., "Industrial Organization and Socialist Develop-ment in China," Modern China, Vol. 5, No. 2 (April 1979), pp. 233-272. . Wan Jing, "Exploit the Potential of Enterprises and Speed Up the Circulation of Material," Chinese Economic Studies, Vol. XV, No. 1 (Fall 1981), pp. 20-30. - 62 -Wang, James C. F., Contemporary Chinese P o l i t i c s : An Introduction; Prentice-Hall, Inc., Englewood C l i f f s : 1980. ! Whyte, Martin King, "Inequality and Stratification in China," China  Quarterly, #64 (Dec. 1975), pp. 684-711. World Bank, China: Socialist Economic Development; Washington: World Bank press, June 1981. Wortzel, Larry M., "Incentive Mechanisms and Remuneration in China: Policies of the Eleventh Central Committee," Asian Survey, Vol. XXI, No. 9 (Sept. 1981), pp. 961-976. 

Cite

Citation Scheme:

        

Citations by CSL (citeproc-js)

Usage Statistics

Share

Embed

Customize your widget with the following options, then copy and paste the code below into the HTML of your page to embed this item in your website.
                        
                            <div id="ubcOpenCollectionsWidgetDisplay">
                            <script id="ubcOpenCollectionsWidget"
                            src="{[{embed.src}]}"
                            data-item="{[{embed.item}]}"
                            data-collection="{[{embed.collection}]}"
                            data-metadata="{[{embed.showMetadata}]}"
                            data-width="{[{embed.width}]}"
                            async >
                            </script>
                            </div>
                        
                    
IIIF logo Our image viewer uses the IIIF 2.0 standard. To load this item in other compatible viewers, use this url:
http://iiif.library.ubc.ca/presentation/dsp.831.1-0095257/manifest

Comment

Related Items