Energy and transport have long been considered the two main obstacles to Chinese economic development. The author explores to what extent economic stagnation has been caused by shortfalls in energy supplies and what can be done to alleviate the situation in the future. (DÜI-Sen)

According to the author, in the late 1970s, Chinese industry was on the verge of collapse. Its high but erratic level of growth since 1949 had been achieved by using ever-increasing amounts of labour and capital. By 1978, the Chinese Communist Party leadership understood the economic problems...