4 SOCIAL SCIENTIST
of working age, and in this sense has been much more successful than most of the underdeveloped countries. A third criterion is the impact the growth of GNP has had in terms of the real living standards of the population. Consumption has almost certainly grown at a less rapid rate than production but despite this, there seems to have been a significant advance in per capita consumption levels since the early 1950s, especially if one includes collective goods such as schooling and medical care. As regards distribution, China seems to have achieved more than virtually any other developing country in ensuring a reasonable sharing around of the fruits of development. Finally, in the most important senses of the word, China's economic growth has been unusually independent5, since it has had minimal access to foreign loans, and has permitted no foreign investment within its borders.
To what may we ascribe China's success in these areas? May other underdeveloped countries learn any lessons from the Chinese experience? The basic premise is that China's success has been primarily due to the operation of a planned economy. A market economy in an underdeveloped country may produce comparable growth, but it is more than likely to produce ^dependent' growth, and growth in which only a part of the population shares, in regard to employment and real income or both.
In China, most industrial enterprises of any size are owned and run by the state, either at the central, provincial or local level. Most agricultural resources are collectively owned, and indirectly controlled by the state through incorporation into the state plan, and through the exercise of important economic choices in accordance with the broad directives of the state. The state has an almost complete monopoly over the marketing sphere in both agricultural and industrial products, and most commodity prices are fixed by the state at one level or another. Much planning is carried on at levels below the centre, but even here it is the local branches of the state apparatus under varying degrees of central control that determine the direction of. economic activity.
Planning has permitted China to channel a relatively large proportion of national income into savings and investment. It has been possible to do this, first, because of the direct control over the wage bill and the utilization of profits of industrial and trading enterprises. Secondly, it has been facilitated by indirect control over the rate of growth of agricultural incomes, exercised via the agricultural tax levy, control of the urban-rural terms of trade, and strong propaganda pressure on agricultural collectives to channel as much as possible of their gross incomes into saving and investment at a significantly higher rate than would probably have occurred under a private enterprise economy. Without the physical availability of investment goods, no investment is possible-