3. THE CULTURAL REVOLUTION YEARS

Considerable dislocation in the machine-building industry occurred during the political turbulence of the Cultural Revolution (1966-69). Imports of equipment from the non-Communist world declined and technical exchanges were terminated. Although some components of the military machine-building industry were prohibited by official decree from engaging in factional disputes, production programs in other areas of machine building suffered enormously. The emphasis on factory level research allowed individual plants to improve their basic product design but prevented the industry from progressing smoothly toward the next generation of machinery products.

In spite of the disruptions of the Cultural Revolution, China achieved substantial increases in machine-building capacity during the late 1960's. Under the general slogan of "war preparation" the PRC engaged in a wide-ranging campaign to construct hundredsand possibly thousands of small-, medium-, and large-scale industrial projects throughout its remote interior regions. For example, construction of a major truck manufacturing complex began in the mid1960's in a remote mountainous region northwest of Wuhan in Hupeh Province. This facility is reported to be the largest truck plant in China.

4. THE EARLY 1970's

The scope of the overall construction program was enormous and continued into the early 1970's, after the Cultural Revolution had wound down. As part of the total construction effort, some existing industrial facilities were moved from border and coastal areas and new industrial complexes were started in places less vulnerable to foreign attack. Additional production capacity was achieved by completing construction of many industrial projects originally started under Soviet sponsorship. Major expansion of numerous key industrial facilities added significantly to the country's total machine-building capacity.

Reestablishing orderly economic planning, together with the additions to production capacity during the 1960's led to substantial increases in output during 1969-71. Production of military-related equipment reached peak levels, and electronics emerged as a favored sector among military-industrial planners. The small plant program, which had gained new respectability during the Cultural Revolution, reached boom proportions, while the construction of modern plants gained increased momentum. Self-reliance had become the watchword in the machine-building industry, and new products of indigenous design began to emerge at a growing rate.

Evidence of a major debate between military and civilian planners over machine-building priorities surfaced in mid-1971. The "electronics versus steel" controversy, which signaled the debate, was quickly followed by the Lin Piao affair. Following the death of Lin, production of military armaments plummeted sharply from the peak levels of 1970-71. The marching orders for the industry during the fourth 5-year plan (1971-75) included increased support to agriculture and the basic industries such as mining, petroleum, chemicals, and electric power. Increased emphasis also was given to purchasing large quantities of Western equipment and manufacturing technology.

B. Organization of the Industry

The first ministry of machine building has jurisdiction over most of the production facilities producing machinery and equipment for the civilian sector (see fig. 1). The broad responsibilities of this ministry include the research, design, and manufacturing of heavy machinery, machine tools, instruments and meters, agricultural machinery, construction machinery and mining equipment, motor vehicles and bearings, power generation machinery, and other electrical equipment.

The second through seventh ministries of machine building are tasked respectively to develop and produce nuclear weapons, aircraft, electronics equipment, conventional armaments, ships, missiles and aerospace systems. The third (aircraft), fourth (electronics), and six (shipbuilding) ministries of machine building have the dual function of producing equipment and hardware for both civilian and military application.

The machine-building industry in China is made up of three types of enterprises. One group is controlled by the central government; a second group receives dual supervision from central and local authorities. China's large-scale, modern machine-building enterprises generally fall into the first category. These facilities represent the mainstay of the industry and encompass a substantial number of Soviet-sponsored projects. The second category of enterprises consists of a few large but mostly medium- and small-size facilities that are supervised jointly by central and local (provincial, prefectural, and county) authorities.

A third group of machine-building plants are under direct control of local authorities but act in accordance with broad outlines laid down by higher authorities. These collectively run enterprises are essentially small plants which are operated primarily for the benefit of the communes. Most of these facilities produce simple farm tools and basic farm machinery.

C. Production Claims and Estimates

The fragmentary data on output from the machine-building industry makes production estimates subject to a large margin of error. Published gross-value claims probably include military hardware as well as producer and consumer durables. The Chinese claimed in 1972 that the total output value of the machine-building industry in 1971 was 13 times that of 1957. Also in 1972, the Chinese stated "in the past two decades and more since liberation, the output of the machine-building industry has increased more than 20 percent every year on the average." Another semiofficial statement in mid-1977 noted "in the 27 years since the founding of the country, our machinery production had an average annual rate of growth of more than 20 percent."

Apart from the dearth of official production data, there is some question concerning the validity of the little information which is released. Statistical reporting by individual provinces and other administrative echelons came under strong attack by the post-Mao leadership during 1977. Charges of fabrication of provincial production data were levied against a number of key ranking officials who were later purged from office.1

Physical output statistics are available on only a few sectors of China's machine-building industry (see table 1). Of those commodities for which output estimates are available, the highest rate of growth during the last decade was shown by electric power generating equipment and agricultural tractors, industries basic to the development of

According to the PRC press, officials in Anhwei, Hopeh, Kansu, and Liaoning had been charged with, or had admitted to making, false industrial and agricultural claims. Based on the emphasis Peking has recently given to improving statistical work, the phenomenon is probably more widespread than the four Provinces would suggest.

China's entire economy (see table 2). From 1965 to 1976, their output increased at an average rate of about 20 percent per year. This is in marked contrast to the machine tool industry, where production grew at an estimated rate of only about 6 percent annually. The relatively slow growth in the machine tool industry can be partly explained by the changing mix of production. The Chinese have been attempting to upgrade the technological character of their machines from simple tools to advanced multipurpose machines. For example, China has begun limited production of numerically controlled machine tools; multiaxis tools, including numerically controlled twoand three-axis machines; and multispindle and multicutter machine tools, including two- and four-head models. The net effect of these changes represent an increase in capability without a commensurate increase in output.

TABLE 1.-ESTIMATED PRODUCTION OF SELECTED MACHINERY AND EQUIPMENT, 1949-76