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China Economy 1996
Beginning in late 1978 the Chinese leadership has been trying to move the
economy from the sluggish Soviet-style centrally planned economy to a more
productive and flexible economy with market elements, but still within the
framework of monolithic Communist control. To this end the authorities
switched to a system of household responsibility in agriculture in place of
the old collectivization, increased the authority of local officials and
plant managers in industry, permitted a wide variety of small-scale
enterprise in services and light manufacturing, and opened the economy to
increased foreign trade and investment. The result has been a strong surge
in production, particularly in agriculture in the early 1980s. Industry also
has posted major gains, especially in coastal areas near Hong Kong and
opposite Taiwan, where foreign investment and modern production methods have
helped spur production of both domestic and export goods. Aggregate output
has more than doubled since 1978. On the darker side, the leadership has
often experienced in its hybrid system the worst results of socialism
(bureaucracy, lassitude, corruption) and of capitalism (windfall gains and
stepped-up inflation). Beijing thus has periodically backtracked,
retightening central controls at intervals. In 1992-94 annual growth of GDP
accelerated, particularly in the coastal areas - to more than 10% annually
according to official claims. In late 1993 China's leadership approved
additional long-term reforms aimed at giving more play to market-oriented
institutions and at strengthening the center's control over the financial
system. In 1994 strong growth continued in the widening market-oriented
areas of the economy. At the same time, the government struggled to (a)
collect revenues due from provinces, businesses, and individuals; (b) keep
inflation within bounds; (c) reduce extortion and other economic crimes; and
(d) keep afloat the large state-owned enterprises, most of which had not
participated in the vigorous expansion of the economy. From 60 to 100
million surplus rural workers are adrift between the villages and the
cities, many barely subsisting through part-time low-pay jobs. Popular
resistance, changes in central policy, and loss of authority by rural cadres
have weakened China's population control program, which is essential to the
nation's long-term economic viability. One of the most dangerous long-term
threats to continued rapid economic growth is the deterioration in the
environment, notably air pollution, soil erosion, and the steady fall of the
water table especially in the north.
GDP - purchasing power parity - $2.9788 trillion (1994 estimate as
extrapolated from World Bank estimate for 1992 by use of official Chinese
growth statistics for 1993-94; because of the difficulties with official
statistics in this time of rapid change, the result may overstate China's
GDP by as much as 25%)
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National product real growth rate:
-
National product per capita:
-
Inflation rate (consumer prices):
25.5% (December 1994 over December 1993)
2.7% in urban areas (1994); substantial underemployment
deficit $13.7 billion (1994)
$121 billion (f.o.b., 1994)
textiles, garments, footwear, toys, machinery and equipment, weapon systems
Hong Kong, Japan, US, Germany, South Korea, Russia (1993)
$115.7 billion (c.i.f., 1994)
rolled steel, motor vehicles, textile machinery, oil products, aircraft
Japan, Taiwan, US, Hong Kong, Germany, South Korea (1993)
growth rate 17.5% (1994 est.)
iron and steel, coal, machine building, armaments, textiles and apparel,
petroleum, cement, chemical fertilizers, consumer durables, food processing,
autos, consumer electronics, telecommunications
accounts for almost 30% of GDP; among the world's largest producers of rice,
potatoes, sorghum, peanuts, tea, millet, barley, and pork; commercial crops
include cotton, other fibers, and oilseeds; produces variety of livestock
products; basically self-sufficient in food; fish catch of 13.35 million
metric tons (including fresh water and pond raised) (1991)
illicit producer of opium; bulk of production is in Yunnan Province (which
produced 25 metric tons in 1994); transshipment point for heroin produced in
the Golden Triangle
to less developed countries (1970-89) $7 billion
US commitments, including Ex-Im (FY70-87), $220.7 million; Western (non-US)
countries, ODA and OOF bilateral commitments (1970-87), $13.5 billion
yuan (Y) per US$1 - 8.4413 (January 1995), 8.6187 (1994), 5.7620 (1993),
5.5146 (1992), 5.3234 (1991), 4.7832 (1990)
beginning 1 January 1994, the People's Bank of China quotes the midpoint
rate against the US dollar based on the previous day's prevailing rate in
the interbank foreign exchange market
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