The Speed of Industrial Development and the Reform of the Economic System

Zhou Shulian

Chinese Economy, 1989, vol. 23, issue 2, 55-70

Abstract: Since late last year, we have seen extremely rapid growth in industrial production in our country. There are different views within academic circles as to the connection between this rapid development and economic structural reform. Some comrades believe that the high speed of industrial development is primarily an effect of the new economic system. They say, "The economic reform since 1978 has brought about a transformation in the national economic structure. The role of the market structure has expanded continuously, causing a continual rationalization of the combination and structure of the factors of the forces of production." "The structural environment that produced the motive for one-sided pursuit of higher output value has gradually disappeared in the course of reform, [and] the rapid economic growth in our country in 1984 was not a product of such a one-sided pursuit of output value." They therefore see the current rapid growth as a characteristic of the new economic structure, and believe that "we should have no fear, but only welcome the advent of rapid economic growth." Some comrades also believe that only by maintaining the current high speed of industrial growth can we advance the economic structural reform; otherwise the reform enterprise will encounter difficulties. I believe that these opinions are open to question. Naturally, the gradual acceleration in the rate of growth in industrial development over the last few years in our country is inseparable from economic structural reform. Owing to the implementation of the reforms, the autonomy of enterprises has expanded, their vitality has increased, their enthusiasm has been strengthened, management has been improved, and technological transformation has been accelerated. All these are indeed major reasons for the rapid industrial development. Improvement of the external conditions of industrial production, such as the development of agriculture, energy resources, transportation, and foreign trade are also inseparable from the reform. The rapid development of collective industry is, even more so, the result of reform. Therefore, it would be absolutely wrong to negate or underestimate the impact of economic structural reform on the high speed of industrial growth. Nonetheless, can we simply say that the current rapid growth in industry is the result of the new economic structure? Can we say that the traditional economic structure that led to the one-sided pursuit of higher output value by enterprises is "no longer of any real significance?" I feel that we cannot say this, because, to begin with, this argument does not conform to the real situation.

Date: 1989
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