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China SUPPLIES OF INDUSTRIAL RESOURCES
Capital
Since 1949 China has devoted a large percentage of investment
to industry. By 1983 investment in industry was approximately 57
percent of investment in fixed assets. In 1984 about -Y44 billion
(for value of
yuan---Y--see Glossary),
or roughly 30 percent of
total state expenditures, was slated for capital construction. In
1981 the leadership attempted to limit uncontrolled, excessive
investment in capital construction. The results were not especially
positive--partly because of reinvestment by enterprises allowed to
retain profits, and partly because of foreign investment.
To supplement domestic sources of capital, China's leadership
began allowing virtually all forms of foreign loans and credit by
the end of 1979. By early 1980, the country had access to the
equivalent of almost US$30 billion in foreign loans and credits
termed through 1985. The Chinese also sought foreign capital by
encouraging joint-venture projects between Chinese and foreign
enterprises
(see Foreign Trade
, ch. 8). But, in early 1986, foreign
companies viewed China as a high-cost and high-risk investment
area. In 1985 US$8.5 billion worth of foreign capital had been
committed, compared to only $US500 million in the first quarter of
1986.
Data as of July 1987
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