In the area of economics, Jean OI's focus on loval self government links the political dilemmas of the previous section with the concrete economic problems of the locality in contemporary China. WIth her customary insight and skilful use of field reserach, Oi paints a complex picture of local development.

" Reprint from Information Infrastructure and Policy (Vol. 4 1995).

Reprint from Ralph Landau, Timothy Taylor, and Gavin Wright, eds., The Mosaic of Economic Growth (Stanford University Press 1996).

Reprint from The National Interest (Fall 1996).

Reprint from Asia-Pacific Economic Review (Vol. 1, No. 3, 1995).

There are huge discrepancies between the official Chinese and U.S. estimates of the bilateral trade balance. The discrepancies are caused by different treatments accorded to re-exports through Hong Kong, re-export markups, and trade in services. Deficit-shifting between China, on the one hand, and Hong Kong and Taiwan, on the other, due to direct investment in China from Taiwan and Hong Kong, is partly responsible for the growth in the China–United States bilateral trade deficit. The 1995 China–United States bilateral balance of trade in goods and services, adjusted by both re-exports and re-export markups, may be estimated as US$23.3 billion, a large deficit but considerably smaller than the often-cited official U.S. figure of US$33.8 billion.

One of the most persistent and important questions in international comparisons of health systems pertains to the wide divergence in costs between countries. Japan has significantly lower per capita health care costs than does the United States, despite having a fee-for-service reimbursement system and universal coverage, and aggressively purchasing and utilizing equipment-embodied medical technologies. 1 One important factor in the increase in American health care costs over time has been the substitution of surgical intervention for medical treatment. 2 This leads us to consider differential rates of surgery as a potential explanation for divergent cost performances. Indeed, although Japan has one-half the inpatient admission rate of the United States, it has only one-quarter the surgery rate per capita