Intro

Econ

(Dutt, 1961)

After the establishment of the communes, the percentage of the income

allotted to savings and investment increased, while that distributed among

the commune members was reduced, the proportion between the two

categories being generally 70 : 3 0.15

The development of industry in the commune, including &dquo; small scale

heavy industry,&dquo; was considerably stressed and was proclaimed as one of

the unique advantages of the commune system and as China’s road to

industrialization. A sizable section of rural labour was particularly diverted

towards industrial activity ; the manufacture of crude steel in the

communes became a political movement all over the countryside

Sigurdson (1975)

in rural areas in China is today an essential

element of regional development programmes

which focus on agricultural development and

diversification, local raw material utilization,

resource mobilization and long-term employment

impact.

capital-output ratios, but, in the over-all

savings in resources they make possible.7

The diseconomies of small-scale production

are such for certain process industries that local

enterprises can only operate under very

favourable conditions, or for limited periods

until economic development removes constraints

such as transportation bottlenecks,

foreign exchange limitations, etc.

Rural industry is also part of a communication

network where an important task is to

spread innovations as quickly as possible within

a local technology system. New things and ideas

often look complicated to an outsider and

therefore people have to be able to ask

questions, test things and try ideas, and to get a

feeling for them in order fully to understand

and accept them. A tightly meshed network is

then a consequence of the fact that the links of

personal communications are heavily restricted

by distance for most individuals. And it is a fact

that personal communication between pairs of

individuals and direct...