ABSTRACT
This chapter focuses on the history of capital accumulation for socialist construction. It reviews that growing demands on the state budget have created strains on the existing sources of funds for accumulation, and the search for new sources has been a factor underlying economic policy shifts. The chapter explains the method by which the government siphons off funds by the sale of agricultural producer goods, since this is the most important problem in China today. To the extent that economic reforms can increase efficiency, population control may even contribute to reducing the levels of accumulation required. The objective of the reforms is to make economic activity efficient and thereby reduce the capital requirements, to deal with the accumulation problem by reducing the scale of accumulation required to attain China's economic growth and modernization targets. The political power of the military increased dramatically from Cultural Revolution when the Party and government were paralyzed, and national unity was maintained through military intervention.
