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research, he cited metallurgy, holding up the needs of the steel industry, in particular the beneficiation of hematite, as an item of top priority; Fang went on to bring up a number of nonferrous metals industries where research is needed to solve a number of technical problems. His discussion of research on computers simply noted the large number of areas where computers are valuable tools and declared Peking's intentions to build a "fair-sized" computer industry by 1985.

The new leadership is keenly aware of the importance of scientifictechnical work to China's modernization and views most post-CulturalRevolution reforms in education and research as impediments to progress. More traditional institutions, they believe, will better serve China's current needs. Despite added spending on science and technology, shortages of research personnel and educators will persist for some time. The recognition that this is so is reflected in the careful attention to the needs of agriculture, industry, and national defense over the next 8 years and the concentration of scientific resources on a limited number of projects with a reasonable possibility of quick payoffs.

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E. Investment

The state plans to build or complete 120 large-scale projects, including 10 iron and steel complexes, 9 nonferrous metal complexes, 3 coal mines, 10 oil and gas fields, 30 power stations, 6 new trunk railways, and 5 key harbors. The completion of these projects added to the existing industrial foundation will provide China with 14 fairly strong and fairly rationally located industrial bases.71

In his February 1978, report to the National People's Congress, Hua Kuo-feng described the massive investment program that will be required to fulfill the new 10-year economic plan. He said that as much will have to be budgeted for capital construction during 1978-85 as was spent during the previous 28 years.72

Little more is known of Peking's industrial investment plans; yet priorities clearly are being centered on attaining a better balance and a substantially higher level of modernization in the industrial sector. To assist in achieving these goals, China's leaders now envisage a substantial role for imported industrial equipment and technology. The important contribution expected of foreign trade can be seen in statements by top Chinese leaders, in articles in the official press, and in the recent Sino-Japanese long-term trade agreement.

APPENDIX A. PROVINCIAL POLITICAL STABILITY METHODOLOGY

The methodology described in this appendix was used to compile the provincial political stability index that is presented in Section III, above. Although only 19 provinces were analyzed in Section III, all 29 of China's provinces are ranked here. The rank was based on four political criteria.

First, the provincial CCP leadership (all Party secretaries from first through deputy and all standing committee members) of each provincial CCP committee was rated using as measures of political stability such criteria as length of time in office; occurrence of purges, demotions, and transfers; and reports of official and unofficial criticism.

Second, each ranking Party secretary was assigned to one of six categories based on his disposition following the purge of the "gang of four." The categories (listed in ascending order of probable negative impact on provincial stability) are: (1) retention in place, (2) promotion in place; (3) transfer but no demotion; (4) transfer and promotion; (5) transfer and demotion; and (6) purge. After each ranking secretary was categorized, political reports and the provincial media were

71 Hua Kuo-feng, "Report on the Work of the Government," Peking Review, No. 10, 1978, pp. 22-23. 72 Ibid., p. 19:

perused for statements that charged the ranking secretary reuospectively with fomenting political factionalism and disorder during the mid-1970's. If the charges were consistent with our analysis of political developments in the province concerned, then the province was given a negative score.

Third, each province that had been the subject of a Central Directive-which is an authoritative, internal communication of the Party Central Committee that details Peking's concern with a particular problem or event-was given a negative score if the Central Directive dealt with a problem that affected the political stability of the province or a major portion of the province.

Fourth, each province was scored according to the relative degree of political stability at its local levels. The analysis of the localities is crucial for any index of provincial political stability during the mid-1970s not only because the local levels were the sites of unrest among factory and railroad workers but also because they were the areas where political factionalism was most likely to have had a serious impact on the industrial production. The scores were based on an analysis of the Chinese national, provincial, and local media; of the relevant sections of the forthcoming Provincial Handbook of China,73 and of reporting on Chinese internal politics released by such sources as the Hong Kong press, Agence France Presse and Reuters.

After each province's scores in the four categories were tallied, the 29 provinces were then ranked in descending order of political stability. Although the ranking of the provinces reflects subjective judgments, the fact that each province has been scored systematically in four areas prevents the methodology from being arbitrary. To facilitate comparison of our ranking with the rankings for two earlier periods prepared by Frederick C. Teiwes," we have also classified the 29 provinces according to his four "stability categories." The categories are: I (highly stable), II (basically stable), III (variable), and IV (unstable). Our rankings are presented in Table A-1 and compared with those of Teiwes.

TABLE A-1.-RANKING OF CHINA'S PROVINCES BY POLITICAL STABILITY

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1 Frederick C. Teiwes, "Provincial Politics in China: Themes and Variations," in John M. H. Lindbeck, ed., China: Management of a Revolutionary Society, Seattle, 1977, p. 152.

2 Frederick C. Teiwes, Provincial Leadership in China: The Cultural Revolution and Its Aftermath, Ithaca, N.Y. 1974, p. 131.

* These provinces were not analyzed in sec. III because GVIO data were not available for each of the years 1974-77

73 Edwin A. Winckler, ed., Provincial Handbook of China, Standford, forthcoming. This paper has greatly benefitted from many lengthy and rewarding discussions with the editor and many of the chapter writers. 74 "Provincial Politics in China: Themes and Variations," in John M. H. Lindbeck, ed., China: Management of a Revolutionary Society, Seattle, 1971, pp. 150-153; Provincial Leadership in China: The Cultural Revolution and its Aftermath,Ithaca, N.Y., 1974, pp. 130-136.

Teiwes' rankings are for personnel stability within provincial CCP secretariats in contrast to our ranking of overall political stability. Teiwes examined data covering (a) the secretaries' length of time in office; (b) the occurrences of purges, demotions and turnovers of secretaries; and (c) the sizes of "core groups" of secretaries who served together for long periods of time. Teiwes' rankings provided him with a systematic means of making qualitative judgments about provincial politics in general and quantitative judgments about the strength of the relationships between personnel stability and other political, social or economic variables.

Teiwes attributed the difference between his two rankings to changes in the Chinese political system caused by the turbulence of the Cultural Revolution. He argued that the Cultural Revolution changed the situation that had existed in the 1950s and early 1960s, in which the richer more developed provinces tended to be more stable than the poorer provinces. He concluded that "Mao had created an environment in which skill in adjusting to contradictory political signals and shifting power alignments became critical for survival." 75

The differences between Teiwes' rankings and ours are due not only to further changes in the Chinese political system brought on by the struggle for succession in the mid-1970s but also to our more comprehensive system of rating.

APPENDIX B. MONTHLY INDUSTRIAL OUTPUT FOR SELECTED
PROVINCES IN RECENT YEARS

The data on monthly industrial output presented in Tables B-1 through B-22 were derived from the large number of statements on industrial performance that were broadcast or published during 1977 and early 1978. Typical of these statements are the following two, which were used in calculating monthly industrial output in Sinkiang:

From January to August this year, the total industrial output value of our region surpassed the previous corresponding period. It was equivalent to 68.3 percent of the target figure set for this year and showed a 17.17 percent rise over last year's corresponding period.76

The total value of industrial production in 1977 overfulfilled the plan by 7.27 percent, an increase of 11.72 percent over 1976.77

In the first statement we are told that 68.3 percent of the annual plan was fulfilled during the first eight months of the year, or a monthly average of 8.5 percent of the plan. In the second statement we are told that the plan was overfulfilled by 7.27 percent. From these two percents we can calculate that 39.0 percent (that is, 107.3-68.3) of the output originally planned for the year was produced during the last four months, or a monthly average of 9.8 percent of the plan.

Similarly, output in 1976 can be related to the output planned for 1977. In the first eight months of 1976, output was 58.3 percent (that is, 68.3÷1.1717) of that planned for 1977, or a monthly average of 7.3 percent of the 1977 plan. During the entire year 1976, output was 96.0 percent (that is, 107.3 1.1172) of that planned for 1977. Finally, output in the last four months of 1976 was 37.7 percent (that is, 96.0-58.3) of that planned for 1977, or a monthly average of 9.4 percent.

75 Ibid., p. 135.

76 FBIS, Oct. 14, 1977, M9:

"FBIS, Feb. 7, 1978, M4

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January-March 1976: Derived from cumulative output through March 1977 and the statement that output in the 1st quarter of 1977 was 3.3 percent less than in the corresponding period of 1976. See BBC, FE/W965/A/3, Feb. 1, 1978. July-December 1976: Derived from output in the 2d half of 1977 and the statement that output in the 2d half of 1977 increased 9.8 percent over the corresponding period of 1976. See FBIS, Jan. 24, 1978, G5.

January-June 1977: Derived from output in the 2d half of 1977 and the statement that output in the 2d half of 1977 increased 13.3 percent over the 1st half (see FBIS, Jan. 24, 1978, G5). The individual months were derived from the following increases over the preceding months:

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January-February 1978: Derived from the statement that output in the 1st 2 mo of 1978 increased 31.2 percent over the corresponding period of 1977. See Hopei Provincial Service, Mar. 29, 1978.

TABLE B-2.-MONTHLY INDUSTRIAL OUTPUT IN CHEKIANG, SELECTED MONTHS, 1973 AND 1976-77

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January-June 1973: Derived from cumulative output through June 1977 and the statement that output in the 1st half of 1977 increased 17 percent over the corresponding period of 1973, the previous peak. See JMJP, July 22, 1977. July-November 1973: Derived from cumulative output through November 1977 and the statement that output in the 1st 11 mo of 1977 increased 7.1 percent over the corresponding period of the previous peak, here assumed to be 1973. See TKP (HK), Dec. 29, 1977.

January-August 1976: Derived from cumulative output through August 1977 and the statement that output in the 1st 8 mo increased 25.9 percent over the corresponding period of 1976. See FBIS, Sept. 20, 1977, G1. September-November 1976: Derived from cumulative output through November 1977 and the statement that output increased 35.8 percent over the corresponding period of 1976. See TKP (HK), Dec. 29, 1977.

January-June 1977: Derived from the statement that 50.3 percent of the plan was fulfilled by the end of June (see JMJP, July 22, 1977). The individual months were derived from the following increases over the preceding month:

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July-August 1977: Derived from the statement that 70.5 percent of the plan was fulfilled by the end of August. See FBIS, Sept. 20, 1977, GI.

September-October 1977: Derived from the statement that 92 percent of the plan wasf filled by the end of October. See FBIS, Nov. 28, 1977, G5.

November 1977: Derived from the statement that 105.7 percent of the plan was fulfilled by the end of November. See TKP (HK), Dec. 29, 1977.

January-March 1978: Derived from the statement that output in the 1st 3 mo of 1978 increased 70.1 percent over the corresponding period of 1977. See FBIS, Apr. 19, 1978, G5.

TABLE B-3.-MONTHLY INDUSTRIAL OUTPUT IN FUKIEN, SELECTED MONTHS, 1976-78

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January-September 1976: Derived from cumulative output through September 1977 and the statement that output in the 1st 9 mo increased 17.5 percent over the corresponding period of 1976. See FBIS, Nov. 9, 1977, G3. October-December 1976: Cumulative output through Dec. 5 was derived from cumulative output through Dec. 5, 1977, and the statement that output increased 20.4 percent over the corresponding period of 1976 (see FBIS, Jan. 5, 1978, G11). Output in the months of October, November, and December was estimated from total output in the period October-Dec. 5 and from the monthly increases in November and December of 15.5 percent and 28 percent (see FBIS, Feb. 18, 1977, G7) on the assumption that average daily output was constant in December. The equations for calculating the estimates are:

5

Oct.+Nov. +31 Dec. 16.6

Nov. 1.155 Oct.
Dec. 1.28 Nov.

January 1977: Derived from output in the month of January 1978 and the statement that output in January 1978 increased 29.1 percent over that of January 1977. See Foochow Provincial Service, Feb. 9, 1978.

February-September 1977: Derived from the statement that 78.1 percent of the plan was fulfilled by the end of September. See FBIS, Nov. 9, 1977, G3.

October-November 1977: Derived from the statement that the plan was fulfilled on Dec. 5, 1977, on the assumption that average daily output was constant in December. See FBIS, Jan. 5, 1978, G11.

December 1977: Derived from cumulative output through December 1976 and the statement that output increased 18.62 percent over that of 1976. See FBIS, Jan. 6, 1978, G3.

January 1978: Derived from the statement that output in January 1978 increased 5.3 percent over the average monthly output in the 4th quarter of 1977. See Foochow Provincial Service, Feb. 9, 1978.

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