# **_4_** _How_ **_Fan Has ChMe Indrj&y ro*wi?_**

and 1986/87 and surpassing 15 percent<sup>in 1984/85 even without the inclusion of village-level</sup> industries.

Data showing the level and growth of industrial<sup>output at both current and constant prices</sup> can also provide information about changes<sup>in the pdice level for industrial goods. This is</sup> particularly important because Chinese<sup>sources give no systematic information on price trends</sup> fer industrial goods until 1984/85; branch<sup>indexes for prices of industrial goods exist only ftwm</sup> 1985/86 [Chirna Price 2 (1989): 59]. Implicit<sup>price indexets fer industrial output appear in Panel</sup> A of Table 1. These data reflect the gradual<sup>emergence of inflationary pressures beginning in</sup> the mid 1980s following yeaws of<sup>near-stability in industrial prices. Whether these data</sup> acciiat'ly reflect trends in prices paid<sup>for industrial goods and/or received by industrial</sup> produce." will be discussed below.

Table 2 indicates the brealkdown of output into several ownership ca.egories:<sup>state-owned,</sup> collective, private, and other. These<sup>figures show that output from the c )llective sector,</sup> particularly its sub-categories of township<sup>and vilage enterprises (jointly described by the tem</sup> xiangzhen Qa , has grown much faster<sup>than producton in state firms, leading to a rapid decline</sup> in the formerly dominant share of state firms in total<sup>output value.</sup> The output totals in Table 2 are divided into<sup>two major sub-categories, state and coUective.</sup> Additional detail is given for two segments<sup>of collective industry, firms managw at the</sup> township (xi) and viLage _(M)_ levels within the coUective<sup>sector. Since coUectiv</sup><sup>**e**nterprises</sup> also operate in urban areas, these segments<sup>do not exhaus</sup><sup>**t**he entire output of China's collective</sup> industries.

Table 2 also displays output data for<sup>a separate category, xian3gzbhCnqy,</sup> which is often translIzted as *township and village enterprises'<sup>(abbreviated lVE), even though the term's</sup> literal meaning is 'township and market-town<sup>enterprises.' These data are of interest for two</sup> reasons: first, reported output has grown with<sup>extreme rapidity in recent years, so that the total</sup> amounts in 1987 to nearly one-third of national<sup>gross output. Furthermore, the scope of the</sup> TVE data remairs uncertain for the period<sup>beginning in 1984. Prior to 1984, the TVE output</sup> data are almost precisely equal to the sum<sup>of output value at fixed prices for township and</sup> village enterprises. Beginning in .984.<sup>however, we find a large and growing gap between</sup> output of township and village enterprises and<sup>the much higher TVE total. In addition, the price</sup> basis of the TVE data reproduced in Table<sup>2 is not specified. We know that the data for</sup> 1978-83 represent the sum of output from<sup>township and village enterprise at constant prices.</sup> The enormnous growth of the TVE category starting in 1983/84<sup>suggests that the. figures shown</sup> in Column E of Table 2 may represent outpu.<sup>valued at current rather than constant prices.</sup> Table 3 presents information on the branch<sup>structure of gross industrial output value at 1980</sup> prices. These data, which exclude the minor<sup>category of non-independent</sup> accounting units and also exclude village enterprise, indicate<sup>very little change in the importance of major branches</sup> of Chinese industry during the past decade.<sup>This is confirmed by the rank correlation coefficient</sup> linking the size structure of industrial branches<sup>for combined state and collective industry (Panel</sup>