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China ECONOMY
Salient Features:Economic system in transition,
cautiously moving away from Soviet-style central planning and
gradually adopting market economy mechanisms and reduced government
role. Industry, largely based on state and collective ownership,
marked by increasing technological advancements and productivity.
China's
people's communes (see Glossary)
eliminated by 1984--after
more than twenty-five years--and
responsibility system (see Glossary)
of production introduced in agricultural sector. Private
ownership of production assets legal, although major
nonagricultural and industrial facilities still state owned and
centrally planned. Restraints on foreign trade relaxed and joint
ventures encouraged.
Industry: In 1985 employed about 17 percent of labor
force but produced more than 46 percent of gross national product
(GNP). Fastest growing sector; average annual growth of 11 percent
from 1952 to 1985. Wide range of technological levels; many small
handicraft units; many enterprises using machinery installed or
designed in 1950s and 1960s; significant number of big, up-to-date
plants, including textile mills, steel mills, chemical fertilizer
plants, and petrochemical facilities but also burgeoning light
industries producing consumer goods. Produced most kinds of
products made by industrialized nations but limited quantities of
high-technology items. Technology transfer by importing whole
plants, equipment, and designs an important means of progress.
Major industrial centers in Liaoning Province, Beijing-Tianjin-
Tangshan area, Shanghai, and Wuhan. Mineral resources included huge
reserves of iron ore; adequate to abundant supplies of nearly all
other industrial minerals. Outdated mining and ore processing
technologies gradually being replaced with modern techniques.
Agriculture: In 1985 employed about 63 percent of labor
force; proportion of GNP about 33 percent. Low worker productivity
because of scanty supplies of agricultural machinery and other
modern inputs. Most agricultural processes still performed by hand.
Very small arable land area (just above 10 percent of total area,
as compared with 22 percent in United States) in relation to size
of country and population. Intensive use of land; all fields
produce at least one crop a year; wherever conditions permit, two
or even three crops grown annually, especially in south. Grain most
important product, including rice, wheat, corn, sorghum, barley,
and millet. Other important crops include cotton, jute, oilseeds,
sugarcane, and sugar beets. Eggs a major product. Pork production
has increased steadily; poultry and pigs raised on family plots.
Other livestock relatively limited in numbers, except for sheep and
goats, grazed in large herds on grasslands of Nei Monggol
Autonomous Region (Inner Mongolia) and northwest. Substantial
marine and freshwater fishery. Timber resources mainly located in
northeast and southwest; much of country deforested centuries ago.
Wide variety of fruits and vegetables grown.
Energy Sources:Self-sufficient in all energy forms; coal
and petroleum exported since early 1970s. Coal reserves among
world's largest; mining technology inadequately developed but
improving in late 1980s. Petroleum reserves very large but of
varying quality and in disparate locations. Suspected oil deposits
in northwest and offshore tracts believed to be among world's
largest; exploration and extraction limited by scarcity of
equipment and trained personnel; twenty-seven contracts for joint
offshore exploration and production by Japanese and Western oil
companies signed by 1982, but by late 1980s only handful of wells
producing. Substantial natural gas reserves in north, northwest,
and offshore. Hydroelectric potential greatest in world, sixth
largest in capacity; very large hydroelectric projects under
construction, others in planning stage. Thermal power, mostly coal
fired, produced approximately 68 percent of generating capacity in
1985; expected to increase to 72 percent by 1990. Emphasis on
thermal power in late 1980s seen by policy makers as quick, shortterm solution to energy needs; hydroelectric power seen as longterm solution. Petroleum production growth to continue in order to
meet needs of nationwide mechanization and provide important
foreign exchange but domestic use to be restricted as much as
possible.
Foreign Trade: Small by international standards but
growing rapidly in size and importance, represented 20 percent of
GNP in 1985. Trade controlled by Ministry of Foreign Economic
Relations and Trade and subordinate units and by Bank of China,
foreign exchange arm of central bank. Substantial decentralization
and increased flexibility in foreign trade operations since late
1970s. Textiles leading export category. Other important exports
included petroleum and foodstuffs. Leading imports included
machinery, transport equipment, manufactured goods, and chemicals.
Japan dominant trading partner, accounting for 28.9 percent of
imports and 15.2 percent of exports in 1986. Hong Kong leading
market for exports (31.6 percent) but source of only 13 percent of
imports. In 1979 United States became China's second largest source
of imports and in 1986 was third largest overall trade partner.
Western Europe, particularly Federal Republic of Germany, also
major trading partner. Tourism encouraged and growing.
Data as of July 1987
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