industrial output have been released for the years since the collapse of the Leap Forward, it was possible to use a least squares technique to approximate the unpublished time-series from statements about increases over 1949, 1965, or the previous year. This technique is fully described in Appendix A of Field, Lardy, and Emerson, 1976.

The regional GVIO data presented in Table C-2 were derived from the provincial output data in Table C-1 by the method described in CIA, "The Gross Value of Industrial Output in the People's Republic of China: 1965-1977," June 1978. The method differs from that used in Field, Lardy, and Emerson, 1976, in two respects. First, the provincial GVIO data are weight so that years for which the data are more complete weigh more heavily in the calculations than those for which data are sparce. And second, the value for any given year can be forced to equal a reported figure or a figure derived from reported data. Because the method only approximates the underlying data, the regional GVIO series were forced to equal the estimated national total.

A SURVEY OF CHINA'S MACHINE-BUILDING INDUSTRY

BY JACK CRAIG, JIM LEWEK, AND GORDON COLE

E. Construction, mining, and materials handling machinery..

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Chinese leaders have frequently claimed that the machine-building industry is the key to technological transformation of the national economy. Indeed, the industry forms the foundation of China's military and industrial development-encompassing a broad spectrum of manufacturing trades, ranging from production of ball bearings to ships, locomotives, power-generation equipment, and the like. As outlined in Chairman Hua's report to the Fifth National People's Congress of early 1978 China is launching an ambitious program to revitalize the economy through modernization of agriculture, industry, national defense, and science and technology. The stated goal is to create a modern industrial economy by the year 2000. Much of the burden of achieving this goal will fall on the machinebuilding industry.

This paper provides an overview of the machine-building industry in the People's Republic, its development since 1949, organization, production, technological capabilities and limitations, planned reforms, and pitfalls likely to be encountered. The paper also provides brief descriptions of the main subsectors of the industry, giving their strengths and weaknesses and probable future development.

What conclusions can be drawn from the paper? Briefly, the technical capability of the Chinese machine-building industry, although impressively advanced since 1949, is still far below levels typical of the industrial West. Moreover, the quality of output and the inherent technology of the equipment vary widely from sector to sector.

How is the machine building industry organized and controlled? Most production falls under the jurisdiction of the First Ministry of Machine Building. The industry itself is made up of three types. of enterprises: (a) those controlled solely by the central government; (b) those receiving dual supervision from central and local authorities; (c) and those solely under the control of local authorities but acting in accordance with general guidelines laid down by the central government. Administrative control over machine building plants involves a complex sharing of responsibilities among ministries, central and local planning bodies, bureaus and departments, and industrial enterprises.

How productive has China's machine-building industry been? Estimates are subject to a wide margin of error. The gross-value