However, in 1978, China differed from the Soviet Union in its resource endowment and economic structure. China was poor, and agriculture remained the dominant economic activity. Peasants suffered from high rates of under-employment and vulnerability to income shocks. In contrast to the Soviet Union’s large, vertically- integrated state enterprises, Chinese industrial output was produced in relatively smaller state firms as well as in small collectives. Infrastructure was weak, and there was little capacity to move commodities between provinces. Decentralization of the planning system in China was linked to financial decentralization as well. Sub-national.
