**_How FA_** _M Chha_ **_induy Orow?_** _5_

C of Table 2) in 1978 and 1987.2 The stabi!tv of br-rch stricture<sup>in both the state and</sup> collective segments of industry is a significant factor in analyzing<sup>trends in reported energy</sup> productivity. A stable branch structure eliminates the ossibility<sup>of raising energy productivity</sup> by raising the share of industil output produced in branches with 'ow energy-intensity.

The figures in Tables 1-3 arc based on the 'gross value of<sup>industrial output," which</sup> represents the combined total of enterprise output val6s inclusive of<sup>materal costs. Table 4</sup> contains information on the growth of net industrial output, which is<sup>calcu1bted by subtracting</sup> the vaiue of material inpuu (minerals, semi-fabricates. energy etc.) from gross output. The net value figures are usually rendered only in current prices; when<sup>nret output is presented in</sup> constant price terms, the figures are apparently obtained by multiplying<sup>net output in current</sup> prices by the ratio of gross output totals Li constant and current<sup>prices, which is equivalen</sup><sup>**t**o</sup> "single deflation rather than tU conceptually preferable "double<sup>deflation" used id</sup> contemporary industrial econormies, in which separate price indexes are<sup>used to remove the</sup> impact of price change from gross output and from the intermediate<sup>goods purchased hy</sup> industrial enterprises.

The general picture emerging from shese data<sup>-</sup> rapid growth, acceleration<sup>after 1983, with</sup> differentially rapid cxpansion of the collective sector<sup>-</sup> parallels<sup>the results reported in Tble 1.</sup> The ratio of net to gross output is nearly identical in the state and collective<sup>sectors. Following</sup> decades of near-constancv in this ratio rsee Industry 1949-84, p. 41J, we now see a gradual<sup>but</sup> steady decline in the net output ratio for both state and collective industry.<sup>There are several</sup> possible reasons for this change:

- changing product mix within individual brmnches of industry (note<sup>that stability of branch</sup> structure precludes change in this area as a source of decline in net<sup>outpmt ratios).</sup>

- changing technology and efficiency in some branches relative<sup>to others.</sup>

- differential inflation of raw matcrials prices relative to prices of<sup>finished products.</sup>

- changes in the rate of double counting arising fr..a response to<sup>new marketing opportunities,</sup> enlarged ialization and inter-enterprise division of labor, expansion<sup>of subcontracting,</sup> and growth of joint production and transprovincial cooperation

Of particular relevance here is the possibility that reform-induced<sup>increases in</sup> inter-enterprise specialization may have raised the, owth rate of gross output<sup>value above the</sup> growth rate of real industrial product. This outcome is not certain: we lack<sup>systematic data on</sup> the ratio of interentcrprise purchases to total out(ut (both<sup>level and time-path of this ratio) for</sup>

> 2. **Braches** 13 **nd** 14, **nd also branch 11 ad** 12 **au combined** for **te** oalwlaton **becaus they amw not** diMpiobshd **_in_ th 1978 fiSue;** with 13 **bmancr, he rmak ording** of 7 **(including**<sup>**the six**</sup><sup>**_lu_**</sup> brarchu) **.identia in** 1978 **and 1957. The am** of **squa.** of **differen0e, nak orde nga**<sup>**hrd th tmainhng**6</sup><sup>**branchs**136.</sup>