China's economic system before the late 1990's, with state ownership of certain industries and central control over planning and the financial system, has enabled the government to mobilize whatever surplus was available and greatly increase the proportion of the national economic output devoted to investment. Analysts estimated that investment accounted for about 25 percent of GNP in 1979, a rate surpassed by few other countries. Because of the ...
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China's economic system before the late 1990's, with state ownership of certain industries and central control over planning and the financial system, has enabled the government to mobilize whatever surplus was available and greatly increase the proportion of the national economic output devoted to investment. Analysts estimated that investment accounted for about 25 percent of GNP in 1979, a rate surpassed by few other countries. Because of the comparatively low level of GNP, however, even this high rate of investment secured only a small amount of resources relative to the size of the country and the population. In 1978, for instance, only 16 percent of the GNP of the United States went into gross investment, but this amounted to US$345.6 billion, whereas the approximately 25 percent of China's GNP that was invested came to about the equivalent of US$111 billion and had to serve a population 4.5 times the size of that in the United States. The limited resources available for...
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