gish Soviet-style centrally
planned economy to a more productive and flexible economy with market
elements, but still within the framework of monolithic Communist
control. To this end the authorities switched to a system of household
responsibility in agriculture in place of the old collectivization,
increased the authority of local officials and plant managers in
industry, permitted a wide variety of small-scale enterprise in
services and light manufacturing, and opened the economy to increased
foreign trade and investment. The result has been a strong surge in
production, particularly in agriculture in the early 1980s. Industry
also has posted major gains, especially in coastal areas near Hong
Kong and opposite Taiwan, where foreign investment and modern
production methods have helped spur production of both domestic and
export goods. Aggregate output has more than doubled since 1978. On
the darker side, the leadership has often experienced in its hybrid
system the worst results of socialism (bureaucracy, lassitude,
corruption) and of capitalism (windfall gains and stepped-up
inflation). Beijing thus has periodically backtracked, retightening
central controls at intervals. In 1992-94 annual growth of GDP
accelerated, particularly in the coastal areas - to more than 10%
annually according to official claims. In late 1993 China's leadership
approved additional long-term reforms aimed at giving more play to
market-oriented institutions and at strengthening the center's control
over the financial system. In 1994 strong growth continued in the
widening market-oriented areas of the economy. At the same time, the
government struggled to (a) collect revenues due from provinces,
businesses, and individuals; (b) keep inflation within bounds; (c)
reduce extortion and other economic crimes; and (d) keep afloat the
large state-owned enterprises, most of which had not participated in
the vigorous expansion of the economy. From 60 to 100 million surplus
rural workers are adrift between the villages and the cities, many
barely subsisting through part-time low-pay jobs. Popular resistance,
changes in central policy, and loss of authority by rural cadres have
weakened China's population control program, which is essential to the
nation's long-term economic viability. One of the most dangerous
long-term threats to continued rapid economic growth is the
deterioration in the environment, notably air poll