STATE INTERVENTION AND INDUSTRIAL CHANGE 71 inevitable in an environment where economic incentives are stressed and greater flexibility in determining payments and rewards is provided to lower level decision making units. Finally, the possibility of widening trade deficits in a situation where the goal of raising the rate of growth of light industry is being pursued with the help of large-scale imports of equipment and technology. CAUSE FOR OPTIMISM While there are signs that each of these factors has come into play since the beginning of the reform, Bagchi's empirical assessment, not all of which is provided given the limitation to the extent of detail that can be incorporated in a monograph, appears to provide cause for optimism. This optimism is also strengthened by his analysis of Chinese policies towards the import of capital and technology, which emphasize the adaptation and internal transfer of imported technologies. Thus the monograph treads the 'middle path* in the assessment of Chinese economic reform. It disputes the claim of a fundamental discontinuity in Chinese economic policy after 1978 and holds that the Chinese policy makers have not swung in favour of 'market socialism', but rather 'opted for retaining the basic structure of central control and for encouraging enterprises to adopt a system of interlocking contracts'. And while accepting the difficulties associated with implementing the reform, it suggests that awareness at the level of the policy maker has helped moderate and stave off the adverse effects that the transition to a more rational economic structure could result in. The perception underlying this assessment is that attempts at capturing the essence of the reform in China in terms of the State vs. market dichotomy misread the problem confronting the policy maker and the complex nature of the solutions being proposed. The futility of pursuing an analysis based on this dichotomy set up by mainstream economics and the need for innovative appraisals of the role of the State, is in fact, the unifying principle that permits an understanding of the role and character of State intervention in the three socially and economically diverse cases that Bagchi has chosen for study. That principle not merely constitutes the most illuminating insight of this little book with an extremely large canvas, but also paves the way for a new synthesis when locating the role of the State as an agent of Aange in the developing world. C.P. CHANDRASEKHAR Centre for Economic Studies and Planning Jawaharlal Nehru University, New Delhi