The new welfare challenge
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The new welfare challenge book
China was in a deep crisis at the end of the Great Proletarian Cultural Revolution. Production in both industry and agriculture was at a virtual standstill. The per capita grain output in 1977 was roughly the same as in 1957 (Xue 1981). In the urban industrial sector, over one-third of all stateowned enterprises were running at a loss in 1976 (Perry and Wong 1985:4) and the unemployed stood at 5.3 per cent in 1978 (Zhongguo Tongji Zeyao 1996:51), a record high for a socialist country. For both urban and rural residents, the Chinese economy was an economy of shortage marked by scarcity of goods and services and almost every necessity of life. Admittedly China had made advances in health, nutrition and education. Neverthless Maoist policies had left the nation backward and impoverished. In 1978, rural per capita income was only 134 yuan per annum; for urbanites, 316 yuan (ibid.). Such meagre standards after three decades of building socialism was deeply frustrating. Politically, the machinery of governance was in ruins. Ideologically too, people’s faith in the party was shaken by constant reversals, power struggles and over-mobilization (Hannan 1985). The death of Mao and the arrest of the Gang of Four, a radical clique led by Mao’s wife Jiang Qing, thus saw the country pregnant with strong desires for change.