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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.

The article presents the author's comments on technological innovations in less developed countries. According to the author, process innovations in the less developed countries mean a change in technology with a corresponding change in factor productivity. The author states that several different factor combinations might simultaneously be actively in use in producing a given commodity

The factor proportions problems of growth in underdeveloped areas can be discussed on both theoretical and empirical levels. First of all, the technological changes either occurring or in prospect for underdeveloped arms are pervasive and profound departures from the previously used techniques which have often become imbued with cultural traditions. By comparison, the technological innovations which occur in advanced countries axe marginal changes, which do not represent such abrupt transitions with such far-reaching consequences for culture as well as economy. Second, technological change in underdeveloped areas is nearly always imported from advanced countries whose factor endowments are usually quite different. Thus, while some of the technological imports may economize on all factors, others, adopted willy-nilly, will economize on the wrong factors. Finally, technological choice in underdeveloped areas is a more obvious problem just because it is done more consciously, more publicly, and is often undertaken directly by government or under the control of its policy.

This article presents a discussion of the research paper "Agricultural Surpluses and Foreign Aid," in the U.S., by John H. Davis, a professor at the Harvard University, published in the May 1959 issue of the journal "American Economic Review." Davis' views on the constructive international purposes to be served by selling U.S. agricultural surpluses for foreign currencies under Title I of Public Law 480 must nevertheless be subjected to the critical process of weighing conflicting evidence, distinguishing valid generalizations from official or unofficial rationalizations, and disclosing unobtrusive side effects. Under present practices, continuing shipments of expendable U.S. commodities are being converted into substantial long-term claims against foreign economic resources. Both the U.S. and the importing country are more eager to move the goods under sales agreements than to negotiate subsequent loan agreements. But pools of local currencies, rising at compound rates in keeping with annual export shipments and prospective loan repayment schedules, are likely to become increasingly embarrassing to both parties.