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The Challenge of Modernizing Industrial China
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11292 |
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CURRENT ISSUES
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| Issue
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5 / 1986 |
7,162 Words |
| Author
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Denis Fred Simon
Denis Fred Simon is Ford International Assistant professor of
Management at the Sloan School of Management, Massachusetts
Institute of Technology, Cambridge, Massachusetts. |
Beginning with the announcement of its Sixth Five Year Plan (FYP) (1981-85), China has sought to quadruple the gross value of its industrial and agricultural output by the year 2000. To achieve this goal, Chinese economists have indicated that the economy must register a 7.2 percent yearly increase in value. In many respects, this is not an overly ambitious goal, particularly in view of the numerous opportunities for increasing overall output in certain sectors with only modest improvements in inputs and organization. Yet, while quantitative increases in growth can be attained, a more important measure of China's potential is the composition of growth. As both foreign and Chinese observers indicate, the problem of China's economic development is as much qualitative as quantitative. Without significant improvements in the technological and managerial base of the economy, China's ability to follow a path of sustained economic growth on a long-term basis will be severely constrained.
In recognition of this fact, Chinese leaders have paid increasing attention to the role of technology development in their modernization program. The upgrading of domestic technology capabilities has continued to be one of the regime's highest priorities, even though the leadership of the People's Republic of China (PRC) for the most part has moved away from its over exaggerated expectations for modern technology. Chinese leaders have realized that their modernization problems stem not merely from China's own technological backwardness--which is a serious bottleneck in itself--but also from a combination of factors that are more frequently associated with the so-called software aspects of production. These factors include factory management and industrial organization, the nature of the links between research and production, the age and mix of equipment in Chinese enterprises, attitudes toward and the treatment of scientific and technical personnel, and the overall structure of incentives within the economic system.
In an effort to rectify the present situation and improve overall productivity in the industrial sector, Chinese leaders in Beijing have placed special emphasis on the technical renovation and upgrading of plant and facilities. In fact, one of the most salient aspects of the entire modernization program is the attention and resources that are being devoted to the "technical transformation of enterprises (jixu gaizao)." While many of the renovation efforts underway in China's provinces and municipalities do not seem to stand out in size or scope, there remains little doubt that collectively they constitute one of the most important features of the modernization
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