1 Ta-t'ung, Kuan, “Our Country's Socialist, Unified Domestic Market,” Red Flag, No. 6, 1963, p. 34.Google Scholar

2 Quoted in an article entitled: “Since You Calculate the Big Account, You Also Have to Calculate the Small Account,” Workers' Daily, 04 13, 1963.Google Scholar

3 Crankshaw, Edward, “The Changing Mask of Marxism,” San Francisco Chronicle, 08 11, 1963.Google Scholar

4 Note the statement in a recent issue of Red Flag: Everybody knows that our country's socialist capital accumulation, just as Stalin has said, cannot be carried out through methods imperialism uses in robbing colonies, cannot be carried out through methods capitalism uses to carry out foreign aggression and extort reparations, nor can it be realised by methods of relying on enslaving foreign loans. Imperialism will not make us any loans. The running dogs of imperialism and foreign reactionaries will also not make us any loans. We also have no intention of accepting any kind of unequal conditions to obtain loans from imperialists, foreign reactionaries, or anyone else! Red Flag, No. 13–14, 1963, p. 11.

5 See, for example, Workers' Daily, 07 18, 1963.Google Scholar

6 Red Flag, No. 13–14, 1963, p. 11.Google Scholar

7 Chukyo no zaisei (Chinese Communist Finances), published by the China section of the Asian Bureau of the Japanese Foreign Office (Tokyo: 1961), p. 44.Google Scholar

8 Fei-ch'ing Yüeh-pao (Taipei), 05 20, 1962, p. 4.Google Scholar To my knowledge there are no statistical breakdowns for budgetary receipts from different branches of the state-owned industrial sector. Such a breakdown would indicate the extent to which light and regional industry have contributed to the national investment programme.

9 Liu, Ta-chung and Yeh, Kung-chia, The Economy of the Chinese Mainland: National Income and Economic Development, 1933–1959 (Santa Monica: Rand Corporation, 1963), Volume I, pp. 160–227; see also Robert F. Dernberger, “Communist China's Foreign Trade, Sources of Investment Funds and Rate of Growth” (unpublished paper), p. 21.Google Scholar

10 Rostow, W. W., The Stages of Economic Growth (Cambridge University Press, 1962), pp. 22–24.Google Scholar

11 Erlich, Alexander, The Soviet Industrialisation Debate, 1924–1928 (Cambridge: Harvard University Press, 1960), pp. 8–23.Google Scholar

12 In presenting the views current in their economic debate, the Chinese usually do it by listing pairs of juxtaposed opinions. Thus the more conservative position argues that low peasant purchasing power must be accepted as a necessary fact, with the state rectifying inequity through financial credit and price policies. What might be called the Bukharinite position argues that industrial support of agriculture must take the form of commodity exchange, which means that the size of peasant purchasing power is the main factor determining the saleability of industrial goods in the rural market. “Summary of the Main Problems Discussed by Shanghai Economists During the Year 1962,” Ching-chi Yen-chiu (Economic Research), No. 4, 1963, p. 64Google Scholar. Another significant similarity between arguments advanced now by the Chinese and earlier by Soviet N.E.P. economists is the acceptance of a priority sequence of agriculture-light industry-heavy industry. Ibid., p. 63; Ehrlich, op. cit., pp. 25–26.

13 Yeh-fang, Sun, “Speaking of ‘Gross Output Value’,” T'ung-chi Kung-tso (Statistical Work), No. 13, 1957, p. 11;Google ScholarYü I-ch'ien, “Can One Substitute ‘Profit’ for ‘Output Value’,” Statistical Work, No. 5, 1957, p. 16.Google Scholar

14 This can be seen in the following table:Percentage increases of profits and output over preceding year

Based on T. C. Liu and K. C. Yeh, op. cit., pp. 160–227. During the years 1953–54, the leadership laid great stress on combating waste and keeping costs down, and so the figures for 1954 and 1955 show a higher savings than output rate. This is even more the case if we compare figures for state enterprise profits as a whole and figures for consumer goods output, in view of the fact that light industry provided a disproportionately high share of national savings. In 1955 the leadership launched its great production drive, and so the figures for 1956 show a reverse picture: output, even for consumer goods, climbs at a faster rate than profits.

15 On tendencies to beat the output plan without regard to costs in capital-favoured modern industries, see Sun Yeh-fang, op. cit., pp. 8–9. Sun admits quite openly that “light industry must bear the burden of accumulation whereas heavy industry does not” (p. 12).

16 See People's Handbook 1958, pp. 461–462;Google Scholar see also Shigeru, Ishikawa, The Structure of Capital Accumulation in China (Tokyo: 1960), pp. 72–73.Google Scholar

17 On July 19, 1962, the People's Daily published a theoretical article by two economists who are generally identified with the less liberal wing of the economic debate in which the following statement occurs:

We feel that cost targets and profit targets are the main indicators for evaluating the economic effectiveness of an enterprise.

However, it is hardly necessary to cite a theoretical article to show that the leadership has come around to accepting cost and profit targets as the main success indicators of enterprises. The press has been full of articles urging an all-out effort on the part of factory employees to meet cost and profit targets, with only secondary mention of output targets.

18 Tsai-hsing, Liu, “On Problems in Establishing Complete Industrial Systems in Economic Co-operation Zones,” Hsin Chien-she (New Construction), No. 10, 1958, pp. 45–57;Google ScholarShou-li, Wang, “Consideration of the Principles in Outlining Economic Zones Within Provinces,” Economic Research, No. 1, 1958, pp. 18–21.Google Scholar

19 People's Daily, 04 2, 1963.Google Scholar

20 Li, Chin, “Discussions in the Very Recent Period by Our Country's Economists on Problems of Socialist Economic Accounting,” Ching-chi Yen-chiu (Economic Research), No. 11, 1962, pp. 66–67.Google Scholar

21 See Kang's, Kao speech to the first congress of the CCP Manchurian region, People's Daily, 06 5, 1950.Google Scholar

22 This is, of course, a very delicate area inasmuch as all prices are supposedly subject to one or another form of state control. The following story, however, seems to indicate that factory managers, upon pressure from their customers, were able to lower their ex-factory prices:

… last year, the Tientsin Machine Casting Plant cast some sewing machine frames for the North China Sewing Machine Plant. Because casting costs were high the latter lost money on its sewing machines. Subsequently, the workers of the Tientsin Plant tried hard to raise quality and productivity, and cut down on the wastage rate. Three months later, costs for casting sewing machine frames were greatly cut, and they were able on their own to reduce the unit price. This way the North China Plant was able to save about 20,000 yuan each month, and solve the problem of losing money on its sewing machines.

People's Daily, 04 2, 1963.Google Scholar One can only conjecture at what lies behind this story, but it is reasonable to reconstruct it as follows. The North China Sewing Machine Company refused to renew its contract with the Tientsin plant unless they could reduce their unit price. Since the authorities could not be persuaded to make the North China “take” the goods nor presumably lower their financial targets, the only way out was to cut costs. That this is the procedure is indicated by a remark in the same article that a Kweichow factory sent its representatives to Tientsin, found the price right, and concluded an ordering agreement. See also Fang-hsun, Yang, “Consider Price on the Basis of Quality—the Better the Quality the Better the Price,” Ta Kung Pao, 07 16, 1962.Google Scholar

23 It is hard to find any hard and fast statements on what types of goods are still subject to strict state allocational controls, and what types can be freely exchanged. Writers stress that the state maintains unified allocational controls over all “major” and “important” agricultural and industrial goods, but allows “a certain number of secondary goods to be freely produced and freely sold.” Current policy on commodity exchange is described as a combination of “planned allocation” and “selective buying.” See Kuan Ta-t'ung, “Our Country's Socialist Unified Domestic Market,” Red Flag, No. 6, 1963, pp. 33, 35. However, already in 1957, Hsueh Mu-ch'iao admitted that of the thousands and tens of thousands of goods on the market only a few hundred were “plan (controlled) commodities”; “Some Preliminary Opinions on Carrying Out the System of Plan Administration,” Economic Research, No. 9, 1957, p. 23.Google Scholar

24 Sheng-yü, T'ao, Ya-sheng, Tan, “Revised Opinions on the Enterprise Profit Sharing System,” Ts'ai-chang (Finance), No. 15, 1959, pp. 13–14.Google Scholar

25 One of the earliest references to this quotation from Lenin that I have come across is in an article entitled “All Enterprises Must Strengthen Economic Accounting.” People's Daily, 12 24, 1961.Google Scholar It is significant that it was just around that time that the economic debates started. It would appear, therefore, that it was around the end of 1961 that the Chinese began to see themselves as in a new N.E.P. period. The passage is from a short memorandum, dated February 1, 1922, which Lenin sent to the Commisariat of Finance urging severe judicial action against enterprises that constantly incur losses. Lenin adds: “if we can't assure our own interests in full in a business-like, merchant-like manner, then we are complete fools!”; Lenin, Sochineniia, XXXV (Moscow: 1951), p. 468.Google Scholar

26 Li, Choh-ming, Economic Development of Communist China (Berkeley: University of California Press, 1959), pp. 19–24.Google Scholar

27 Mu-ch'iao, Hsueh, “The Law of Value and Our Price Policy,” Red Flag, No. 7–8, 1963, pp. 1–9.Google Scholar

28 Fang-hsün, Yang, “Consider Price on the Basis of Quality—the Better the Quality the Better the Price,” Ta Kung Pao, 07 16, 1962.Google Scholar

29 Mao-i, Ch'en, “Let Us Talk About the Worsening of Economic Conditions in Yugoslavia,” Red Flag, No. 17, 1962, pp. 24–31.Google Scholar

30 The conception of what an intellectual is appears to be much the same in both the Soviet Union and Communist China. In the Soviet Union, too, ordinary white collar employees, the so-called sluzhashchie, are not considered intellectuals. See Inkeles, Alex and Bauer, Raymond, The Soviet Citizen (Cambridge: Harvard University Press, 1959), pp. 72–73.CrossRefGoogle Scholar

31 Pai, K'o, “Preliminary Discussion of the Salary System of Leadership Personnel, Engineers and Technicians, and Functionaries in Industrial Enterprises,” Chung-kuo Kung-yeh (China's Industry), No. 2, 1956, pp. 6–7.Google Scholar

32 See Levenson, Joseph R., Confucian China and Its Modern Fate (Berkeley: University of California Press, 1958), pp. 15–43.Google Scholar

33 See, for example, K'o-chien, Shih, “Sufficiently Develop the Capacities of Technical Personnel,” Red Flag, No. 8–8, 1962, pp. 42–45.Google Scholar There is also now renewed emphasis on the need for Party cadres to have administrative and technical competence; see Han, Chao, “Some Questions Concerning Party Cadre Policy,” Red Flag, No. 12, 1962, pp. 1–13.Google Scholar

34 “The State Council Publishes Tentative Regulations on the Authority of Accounting Personnel,” People's Daily, 12 14, 1962.Google Scholar

35 The situation in China appears to be the opposite of that in the USSR, where since the death of Stalin, there has been a consistent effort to make the Party into an active organisational instrument and give it greater power for making economic decisions at all levels of the system.

36 So far four articles have appeared summarising the issues in what might be called the nation-wide debate (there have been several articles summarising the regional debates). All are signed by a man writing under the nom de plume of Chin Li. Of these, the third of those listed recapitulates more or less the same issues discussed in the first, indicating some significant changes in views. It would be extremely desirable that a careful analysis of these debates be undertaken, somewhat like Alexander Erlich has done for the Soviet debates in the 1920s.

(1) “Short Presentation of Dissimilar Viewpoints in the Discussion of Problems of Economic Accounting Under a Socialist System,” Ching-chi Yen-chiu, No. 3, 1962, pp. 61–67.Google Scholar

(2) “Dissimilar Viewpoints in the Discussion of Price Problems Under a Socialist System by Our Country's Economists,” Ching-chi Yen-chiu, No. 6, 1962, pp. 63–69.Google Scholar

(3) “Discussions in the Very Recent Period by Our Country's Economists on Problems of Socialist Economic Accounting,” Ching-chi Yen-chiu, No. 11, 1962, pp. 66–67.Google Scholar

(4) “Discussion in Recent Years of Problems of Socialist Economic Effectiveness by Our Country's Economists,” Ching-chi Yen-chiu, No. 1, 1963, pp. 60–65.Google Scholar

37 Cünow, Heinrich, Die Marxsche Geschichs-, Gesellschafts-, und Staatstheorie (Berlin: 1923), pp. 252–255, 310–314.Google Scholar