1. It is important to note that our use of these terms to represent discrete periods of economic institutions and policies is a matter of convenience and is not meant to imply that the institutions or policies were the products of these individuals. As the paramount political leader(s) of the PRC at the time, they were obviously involved in the discussions and decisions that lead to the adoption of these institutions and policies, but the extent and nature of that involvement is not the focus of this article.

2. These forced savings were achieved by means of assigning the peasant output quotas and setting the prices of that output relatively low. The prices of inputs for industrial enterprises were also set relatively low. The output of consumer goods was priced relatively high and the restricted supply of essentials distributed by rationing. The profits of the state enterprises, i.e. their revenue from sales minus their costs, were rather large (the rate of profit often being greater than 50% sometimes even over 100%) and went to the state as revenue in its budget. These were just disguised indirect taxes on the population, which were put into the hands of the planners to finance their investment programme.

3. For the sake of brevity I have tried to limit my reliance on factual statements to those that can be found in the more readily available and popular sources on developments in the Chinese economy. These include: State Statistical Bureau (PRC) and the Institute of Economic Research, Hitotsubashi University (Japan), The Historical National Accounts of the People's Republic of China, 1952–1995, printed and distributed by the Institute of Economic Research, Hitotsubashi University, 1997Google Scholar; State Statistical Bureau, Statistical Yearbook of ChinaGoogle Scholar, the published hard-cover copies of 1991, 1992, 1993, 1994, 1995 and 1996 and the CD ROM version of the 1997 and 1998 volumes; Chinese Economic Trends, published quarterly by the Development Research Centre of the State Council, People's Republic of China.

4. Calculated by means of three-year moving averages with a one-year lag between investment and output.

5. To give credit where credit is due, during the Mao era, the Chinese did provide for widespread educational opportunities, better access to medical and dental care, more opportunities for women, a significant social welfare package for the urban worker – those favourable accomplishments associated with most Soviet-type economies. In addition, they achieved the significant industrialization of the Chinese economy with a remarkable degree of self-sufficiency.

6. Although it is common to refer to these sales as sales of stock on China's new stock markets, these are really sales of debt obligations with unspecified property rights to the enterprise's assets and assign no direct management control over those assets.

7. The growth rate of GDP was 14.2% in 1992, 13.5% in 1993, 12.6% in 1994, 10.5% in 1995, 9.6% in 1996 and 8.8% in 1997.

8. Jean Oi's article in this volume evaluates the current leadership's efforts to resolve the problem of the Chinese farmers' property rights in land as a means for restoring incentives in this sector. However, as serious as this problem may be, the current leadership should appreciate that no modern economy in the world has been able to rely on household farming in a market economy without price supports or an income policy. There is no indication that either is a part of Jiang and Zhu's policy.

9. These losses were putting the state at risk by becoming a “dead-weight” loss in the budget. In 1976, while the profits of the SOEs had declined to the point where they were no longer reported in the budget, the revenue from their income tax exceeded the expenditures on subsidies to the loss-making SOEs by 17.43 billion RMB. In 1997, however, the net flow in the budget due to these two items was a negative 2.49 billion. For the explanation of how these losses were putting the banking system at risk, see the explanation in the text below.

10. This resolve of the Jiang and Zhu leadership to “bite the bullet” and truly reform the SOEs is discussed more fully in Dorothy Solinger's article in this volume.

11. Elisabeth J. Croll discusses the problem of growing unemployment of the urban labour force in her article in this volume.

12. This transition from supporting the SOEs with forced savings to supporting them with the voluntary savings of the people is one of the more remarkable aspects of the success of Deng's policies.