DISCUSSION.

This section presents commentaries on articles about Chinese planning and economy published in the May 1973 issue of the American Economic Review. It is enlightening to learn from Dwight H. Perkins' paper about the problems which the People's Republic of China has had in formulating and implementing consistent plans for development. Perkins also raised but does not resolve some of the central issues of planning and plan implementation in China. Imports can be an efficient source of goods which can relieve unforeseen bottlenecks and exports can permit the utilization of capacity which might otherwise remain idle. Perkins' argument may be interpreted as meaning that the signals of resource misallocation or plan disruption are somehow clearer and stronger when foreign trade is not available as an offset. With regards to the paper by Ta-Chung Liu and Kung-Chia Yeh, it is clear that they have employed considerable ingenuity in assessing the overall economic performance of China. However, the source of the differences in the incremental fixed capital-output ratios may not be in the differences in the mix of industries and projects in China as compared to other countries, but in the relative inefficiency with which investment projects are carried out.