The Chinese economy was on a roller coaster ride for much of 1985. A dizzying surge of industrial growth that began at the end of 1984 accelerated through the first half of 1985, and attracted worldwide attention. Spectacular growth seemed to signal a new phase of China's economic development: During the first half of the year industrial output was 24% above the same period in 1984, and industry expanded by 18% in all of 1985. 1 Yet, by midyear, it became obvious that this growth spurt had created serious tensions in the economy, and urgent measures to reduce the growth rate of industrial production and investment were adopted. Moreover, hit by bad weather and a shift in acreage away from grain production, China's total grain output plunged from the record harvest of 1984. By the end of the year, planners had brought growth rates down to a sustainable level, and ample grain stocks ruled out any danger of shortages of food grain. Nevertheless, a mood of uncertainty lingered, as planners contemplated their next moves. In particular, after a year in which economic reform measures had dominated policymaking, the need to restore macroeconomic balance seemed to rule out further progress in reform, at least in the immediate future.