ABSTRACT
This chapter explains the reasons behind the phenomenal rise of the Zhejiang economy to the forefront of provincial units during the reform period. It examines the role of leadership, provincial developmental strategies and policy priorities in the fields of resource allocation (in particular fiscal and investment policy) as factors in this growth, and comes to the rather paradoxical conclusion that these variables seem to have had little direct relationship with the economic outcomes. The paper argues rather that the extraordinarily dynamic growth of the provincial economy since the late 1970s can be attributed more to the change in direction embarked upon in Beijing, and that the role of the provincial leadership seems to have largely been confined to cautious and sometimes divided responses to these initiatives. On the other hand, there seems to have been a semi-spontaneous, creative response to central initiatives on the part of the people of Zhejiang who, with the active assistance or passive acquiescence of grassroots leaders more in tune with local realities, have been quick to take advantage of the opportunities which the new dispensation has thrown up.
