Social Scientist. v 11, no. 121 (June 1983) p. 68.

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XUE MUQIAO's book China's Socialist Economy has to be viewed in the cc^text of an ongoing struggle since the founding of the People's Republic over strategies of economic development. These strategies are related to three main aspect^ in the conscious transformation of a socialist economy. They are: the mechanisms evolved for the transfer bf economic surplus for investment, the priority to be given to the capital goods sector and the choice of techniques in industry. The adoption of a particular strategy in a socialist economy is, of course, conditioned by its ideological position on the course of the revolution and the existing concrete historical circumstances.

In China, there have been two distinct trends in the policies pursued for the socialist transformation of the economy. These could Broadly b^ represented as the Mao Zedong and Liu Shab-qi lines on economic development. The Liu line was for stress on heavy industry, through the utilisation of modern techniques of production and a planning mechanism relying on the "market" and material incentives. Th^ period of the First Plan (1962-1966) and again the period of "readjustment" (1962-1966) were heavily weighed by the Liu line, though in the first period there was a lesser stress on the "market" as a planning mechanism aftd the latter had a .greater emphasis on agriculture.

The Maoist strategy, which was adopted during the Great Leap Forward (1958-1961) and again resurrected during the Cultural Revolution (1966-1976), was for the simultaneous development of industry and agriculture. As this strategy obviously implied excessive strains on a limited economic surplus for investment, it was sought to be overcome through a mass mobilisation of human labour to replace capital investment and a simultaneous use of modern and traditional techniques of production, with a planning mechanism relying on moral incentives rather than on "market" and material incentives.

China's Socialist Economy emerges as a systematic critique of Maoist policies (referred to as those of the "Gang of Four" in this book) and an argument for the post-Cultural Revolution era. Xue forcefully argues for a political economy approach to socialism which analyses the dynamics of these economies in terms of the contradictions between the relations of production and the forces of production. Consequently, New China's economic performance on various fronts is explained as a result of the changes in the relations of production over time. More specifically, the failures of the Chinese economy are explained as the consequence of an extreme "political economy" approach to socialism by the "Gang of Four", who argued during the Cultural Revolution, that at no stage could the productive forces grow without a phange in the relations of production

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