INTRODUCTION Seen through the eyes of a Chinese fanner or factory worker, let alone those of a surplus agricultural labourer, a migrant, a chronically impoverished fann household or one of the increasing number of urban unemployed,l the state of the Chinese economy is self-evidently a matter of direct and pressing concern. Less pressing, but nonetheless important, are the aspirations for

further quantitative and qualitative improvements in living standards for those who have benefited most from post-1978 economic reforms. Meanwhile, in the face of demands for improved living standards by both groups - the advantaged and the disadvantaged - the economic imperative is a critical touchstone for the central authorities in Beijing, the maintenance of economic growth with stabilitr having become a yardstick of the Chinese Communist Party's ability to retain its authority and legitimacy. In short, economic and welfare preoccupations leave no room for doubt that, from an internal perspective, the performance of China's economy matters greatly.