70 SOCIAL SCIENTIST accumulation substantially, with such accumulation having averaged 28.2 per cent over these years and having touched the 40 per cent mark in the 1959-60 period. In this effort China sought to control the direction of its investment, resulting in a relatively higher rate of growth of the capital and intermediate goods sectors. Simultaneously, the system ensured full employment of its population and assured them of the 'iron rice bowl', a guaranteed minimum level of living throughout life. However, this experience of growth, through a highly regulated and centrally guided system, has not been without its problems. The most obvious have been the slow rate of growth of agriculture and the system's inability to sustain adequate increases in productivity per worker in the agricultural sector. In fact, 'the guarantee of full employment and the tendency of all large enterprises to internalize as many linkages as possible have led to "extensive" rather than "intensive" growth and often led not only to temporary waste but to a system of wasteful utilization of capital goods, raw materials and labour.' In addition, given the excessive preference for heavy industry, a distorted production structure was created. Problems of this kind have, in Bagchi's view, been the motive force behind the current efforts at restructuring production in the People's Republic of China. Two elements have no doubt been important components of this reform. First, a degree of decentralization. And second, use of market signals as part of this process of decentralisation. But these, according to Bagchi, are by no means the backbone of the reform. Rather, the effort is concentrated on evolving specific contracts between government and the enterprise, between workers/peasants and teams/brigades or collectives/State enterprises. These examples of the new 'responsibility system' are really adjuncts to or even substitutes to the market mechanism. In addition, though there have been instances of decentralization of decision making, 'more centralized control over certain decisions have been considered necessary in order to achieve the desired ratio of accumulation to consumption, and the desired degree of flexibility in the economy.' There are no doubt constraints to the realization of reform programmes, which Bagchi has delineated in great detail. First, the fact that economic decentralization has been accompanied by an 'unplanned* increase in capital construction, blocked earlier for lack of centrally allocated funds, resulting in a slowing down in the process of restructuring production away from heavy industry. Second, the inflationary potential associated with reform of the price system, aimed at permitting a modicum of enterprise level flexibility in price setting and of raising the prices of certain products (agricultural, for example) to redress distributional imbalances. Third, the danger of open employment, particularly in the urban areas, which may not be fully mitigated by the surge in farm output in the wake of the reform and the new opportunities for self-employment in the agricultural and service -sectors. Fourth, increases in wage and income differentials,