Examines the question of why China's coastal and inland areas have had equal aggregate output growth despite heavier investment in the interior. In 1952, seven comparatively advanced coastal provinces, with 40 percent of total population and 11 percent of total area, had 33 percent of the farmland and 68 percent of national output. Communist planners have been seeking to develop the interior in order to reduce vulnerability to enemy attack, cut transportation costs by putting production facilities near raw materials, and develop local self-sufficiency. This paper traces the history of changes in implementation in response to current conditions, since greater production at lower cost could be achieved quickly by smaller investment in the developed areas. The disruptions of the Cultural Revolution, the failure of the Great Leap Forward, and the removal of Soviet technicians affected the underdeveloped interior more severely and required greater coastal production to meet immediate needs. If China had not favored the inland areas, she would almost certainly have a dual economy now. 29 pp. Ref. (Prepared for the Joint Economic Committee of Congress.)
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