ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 29 DB Rec# - 622 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.00 Title :CHAPTER 4.00 - EDUCATION AND CULTURE Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : SINCE THE REPUDIATION of the Cultural Revolution (1966-76), the development of the education system in China has been geared particularly to the advancement of economic modernization. Among the notable official efforts to improve the system were a 1984 decision to formulate major laws on education in the next several years and a 1985 plan to reform the education system. In unveiling the education reform plan in May 1985, the authorities called for nine years of compulsory education and the establishment of the State Education Commission (created the following month). Official commitment to improved education was nowhere more evident than in the substantial increase in funds for education in the Seventh Five-Year Plan (1986-90), which amounted to 72 percent more than funds allotted to education in the previous plan period (1981-85). In 1986 some 16.8 percent of the state budget was earmarked for education, compared with 10.4 percent in 1984. Since 1949, education has been a focus of controversy in China. As a result of continual intraparty realignments, official policy alternated between ideological imperatives and practical efforts to further national development. But ideology and pragmatism often have been incompatible. The Great Leap Forward (1958-60) and the Socialist Education Movement (1962-65) sought to end deeply rooted academic elitism, to narrow social and cultural gaps between workers and peasants and between urban and rural populations, and to "rectify" the tendency of scholars and intellectuals disdain manual labor. During the Cultural Revolution, universal education in the interest of fostering social equality was an overriding priority. The post-Mao Zedong Chinese Communist Party leadership viewed education as the foundation of the Four Modernizations. In the early 1980s, science and technology education became an important focus of education policy. By 1986 training skilled personnel and expanding scientific and technical knowledge had been assigned the highest priority. Although the humanities were considered important, vocational and technical skills were considered paramount for meeting China's modernization goals. The reorientation of educational priorities paralleled Deng Xiaoping's strategy for economic development. Emphasis also was placed on the further training of the already-educated elite, who would carry on the modernization program in the coming decades. Renewed emphasis on modern science and technology, coupled with the recognition of the relative scientific superiority of the West, led to the adoption, beginning in 1976, of an outward-looking policy that encouraged learning and borrowing from abroad for advanced training in a wide range of scientific fields. Beginning at the Third Plenum of the Eleventh National Party Congress Central Committee in December 1978, intellectuals were encouraged to pursue research in support of the Four Modernizations and, as long as they complied with the party's "four cardinal principles"--upholding socialism, the dictatorship of the proletariat, the leadership of the party, and Marxism-Leninism-Mao Zedong Thought--they were given relatively free rein. But when the party and the government determined that the strictures of the four cardinal principles had been stretched beyond tolerable limits, they did not hesitate to restrict intellectual expression. Literature and the arts also experienced a great revival in the late 1970s and 1980s. Traditional forms flourished once again, and many new kinds of literature and cultural expression were introduced from abroad. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90028 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 30 DB Rec# - 623 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.01 Title :CHAPTER 4.01: EDUCATION POLICY Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : EDUCATION POLICY During the Cultural Revolution, higher education in particular suffered tremendous losses; the system was shut down, and a rising generation of college and graduate students, academicians and technicians, professionals and teachers, was lost. The result was a lack of trained talent to meet the needs of society, an irrationally structured higher education system unequal to the needs of the economic and technological boom, and an uneven development in secondary technical and vocational education. In the post-Mao period, China's education policy continued to evolve. The pragmatist leadership, under Deng Xiaoping, recognized that to meet the goals of modernization it was necessary to develop science, technology, and intellectual resources and to raise the population's education level. Demands on education--for new technology, information science, and advanced management expertise--were levied as a result of the reform of the economic structure and the emergence of new economic forms. In particular, China needed an educated labor force to feed and provision its 1-billion-plus population. By 1980 achievement was once again accepted as the basis for admission and promotion in education. This fundamental change reflected the critical role of scientific and technical knowledge and professional skills in the Four Modernizations. Also, political activism was no longer regarded as an important measure of individual performance, and even the development of commonly approved political attitudes and political background was secondary to achievement. Education policy promoted expanded enrollments, with the long-term objective of achieving universal primary and secondary education. This policy contrasted with the previous one, which touted increased enrollments for egalitarian reasons. In 1985 the commitment to modernization was reinforced by plans for nine-year compulsory education and for providing good quality higher education. Deng Xiaoping's far-ranging educational reform policy, which involved all levels of the education system, aimed to narrow the gap between China and other developing countries. Modernizing China was tied to modernizing education. Devolution of educational management from the central to the local level was the means chosen to improve the education system. Centralized authority was not abandoned, however, as evidenced by the creation of the State Education Commission. Academically, the goals of reform were to enhance and universalize elementary and junior middle school education; to increase the number of schools and qualified teachers; and to develop vocational and technical education. A uniform standard for curricula, textbooks, examinations, and teacher qualifications (especially at the middle-school level) was established, and considerable autonomy and variations in and among the autonomous regions, provinces, and special municipalities were allowed. Further, the system of enrollment and job assignment in higher education was changed, and excessive government control over colleges and universities was reduced. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90029 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 31 DB Rec# - 624 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.02 Title :CHAPTER 4.02: THE EDUCATION SYSTEM Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : THE EDUCATION SYSTEM To provide for its population, China has a vast and varied school system. There are preschools, kindergartens, schools for the deaf and blind, key schools (similar to college preparatory schools), primary schools, secondary schools (comprising junior and senior middle schools, secondary agricultural and vocational schools, regular secondary schools, secondary teachers' schools, secondary technical schools, and secondary professional schools), and various institutions of higher learning (consisting of regular colleges and universities, professional colleges, and short-term vocational universities). In terms of access to education, China's system represented a pyramid; because of the scarcity of resources allotted to higher education, student numbers decreased sharply at the higher levels. Although there were dramatic advances in primary education after 1949, achievements in secondary and higher education were not as great. Although the government has authority over the education system, the Chinese Communist Party has played a role in managing education since 1949. The party established broad education policies and under Deng Xiaoping, tied improvements in the quality of education to its modernization plan. The party also monitored the government's implementation of its policies at the local level and within educational institutions through its party committees. Party members within educational institutions, who often have a leading management role, are responsible for steering their schools in the direction mandated by party policy. New Directions The May 1985 National Conference on Education recognized five fundamental areas for reform to be discussed in connection with implementing the party Central Committee's "Draft Decision on Reforming the Education System." The reforms were intended to produce "more able people"; to make the localities responsible for developing "basic education" and systematically implement a nine-year compulsory education program; to improve secondary education develop vocational and technical education; to reform and the graduate-assignment system of institutions of higher education and to expand their management and decision-making powers; and to give administrators the necessary encouragement and authority to ensure smooth progress in educational reform. The National Conference on Education paved the way for the abolition of the Ministry of Education and the establishment of the State Education Commission, both of which occurred in June 1985. Created to coordinate education policy, the commission assumed roles previously played by the State Planning Commission and the Ministry of Education. As a State Council commission, the new State Education Commission had greater status than the old Ministry of Education had had and was in charge of all education organizations except military ones (see The State Council, ch. 10). Although the State Education Commission assumed a central role in the administration of education, the reform decentralized much of the power previously wielded by the Ministry of Education and its constituent offices and bureaus, which had established curriculum and admissions policies in response to the State Planning Commission's requirements. The State Education Commission, with its expanded administrative scope and power, was responsible for formulating guiding principles for education, establishing regulations, planning the progress of educational projects, coordinating the educational programs of different departments, and standardization educational reforms. Simplification of administration and delegation of authority were made the bases for improving the education system. This devolution of management to the autonomous regions, provinces, and special municipalities meant local governments had more decision-making power and were able to develop basic education. State-owned enterprises, mass organizations, and individuals were encouraged to pool funds to accomplish education reform. Local authorities used state appropriations and a percentage of local reserve financial resources (basically township financial revenues) to finance educational projects. Compulsory Education Law The Law on Nine-Year Compulsory Education, which took effect July 1, 1986, established requirements and deadlines for attaining universal education tailored to local conditions and guaranteed school-age children the right to receive education. People's congresses at various local levels were, within certain guidelines and according to local conditions, to decide the steps, methods, and deadlines for implementing nine-year compulsory education in accordance with the guidelines formulated by the central authorities. The program sought to bring rural areas, which had four to six years of compulsory schooling, into line with their urban counterparts. Education departments were exhorted to train millions of skilled workers for all trades and professions and to offer guidelines, curricula, and methods to comply with the reform program and modernization needs. Provincial-level authorities were to develop plans, enact decrees and rules, distribute funds to counties, and administer directly a few key secondary schools. County authorities were to distribute funds to each township government, which were to make up any deficiencies. County authorities were to supervise education and teaching and to manage their own senior middle schools, teachers' schools, teachers' in-service training schools, agricultural vocational schools, and exemplary primary and junior middle schools. The remaining schools were to be managed separately by the county and township authorities. The compulsory education law divided China into three categories: cities and economically developed areas in coastal provinces and a small number of developed areas in the hinterland; towns and villages with medium development; and economically backward areas. By November 1985 the first category--the larger cities and approximately 20 percent of the counties (mainly in the more developed coastal and southeastern areas of China) had achieved universal 9-year education. By 1990 cities, economically developed areas in coastal provincial-level units, and a small number of developed interior areas (approximately 25 percent of China's population) and areas where junior middle schools were already popularized were targeted to have universal junior-middle-school education. Education planners envisioned that by the mid-1990s all workers and staff in coastal areas, inland cities, and moderately developed areas (with a combined population of 300 million to 400 million people) would have either compulsory 9-year or vocational education and that 5 percent of the people in these areas would have a college education--building a solid intellectual foundation for China. Further, the planners expected that secondary education and university entrants would also increase by the year 2000. The second category targeted under the 9-year compulsory education law consisted of towns and villages with medium-level development (around 50 percent of China's population), where universal education was expected to reach the junior-middle-school level by 1995. Technical and higher education was projected to develop at the same rate. The third category, economically backward (rural) areas (around 25 percent of China's population) were to popularize basic education without a timetable and at various levels according to local economic development, though the state would "do its best" to support educational development. The state also would assist education in minority nationality areas (see Minority Nationalities, ch. 2). In the past, rural areas, which lacked a standardized and universal primary education system, had produced generations of illiterates; only 60 percent of their primary school graduates had met established standards. As a further example of the government's commitment to nine-year compulsory education, in January 1986 the State Council drafted a bill passed at the Fourteenth Session of the Standing Committee of the Sixth National People's Congress that made it illegal for any organization or individual to employ youths before they had completed their nine years of schooling. The bill also authorized free education and subsidies for students whose families had financial difficulties. Key Schools "Key schools," shut down during the Cultural Revolution, reappeared in the late 1970s and, in the early 1980s, became an integral part of the effort to revive the lapsed education system. Because educational resources were scarce, selected ("key") institutions--usually those with records of past educational accomplishment--were given priority in the assignment of teachers, equipment, and funds. They also were allowed to recruit the best students for special training to compete for admission to top schools at the next level. Key schools constituted only a small percentage of all regular senior middle schools and funneled the best students into the best secondary schools, largely on the basis of entrance scores. In 1980 the greatest resources were allocated to the key schools that would produce the greatest number of college entrants. In early 1987 efforts had begun to develop the key school from a preparatory school into a vehicle for diffusing improved curricula, materials, and teaching practices to local schools. Moreover, the appropriateness of a key school's role in the nine-year basic education plan was questioned by some officials because key schools favored urban areas and the children of more affluent and better educated parents. In 1985 entrance examinations and the key-school system had already been abolished in Changchun, Shenyang, Shenzhen, Xiamen, and other cities, and education departments in Shanghai and Tianjin were moving to establish a student recommendation system and eliminate key schools. In 1986 the Shanghai Educational Bureau abolished the key junior-middle-school system to ensure "an overall level of education." -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90030 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 32 DB Rec# - 625 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.03 Title :CHAPTER 4.03: PRIMARY EDUCATION Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : PRIMARY EDUCATION Primary Schools The development of primary education in so vast a country as China was a formidable accomplishment. In contrast to the 20-percent enrollment rate before 1949, in 1985 about 96 percent of primary-school-age children were enrolled in approximately 832,300 primary schools (see table 10, Appendix A). This enrollment figure compared favorably with the record figures of the late 1960s and early 1970s, when enrollment standards were more egalitarian. In 1985 the World Bank estimated that enrollments in primary schools would decrease from 136 million in 1983 to 95 million in the late 1990s and that the decreased enrollment would reduce the number of teachers needed. Qualified teachers, however, would continue to be in demand. Under the Law on Nine-Year Compulsory Education, primary schools were to be tuition-free and reasonably located for the convenience of children attending them; students would attend primary schools in their neighborhoods or villages. Parents paid a small fee per term for books and other expenses such as transportation, food, and heating. Previously, fees were not considered a deterrent to attendance, although some parents felt even these minor costs were more than they could afford. Under the education reform, students from poor families received stipends, and state enterprises, institutions, and other sectors of society were encouraged to establish their own schools. A major concern was that scarce resources be conserved without causing enrollment to fall and without weakening of the better schools. In particular, local governments were warned not to pursue middle-school education blindly while primary school education was still developing, or to wrest money, teaching staff, and materials from primary schools. Children usually entered primary school at seven years of age for six days a week. The two-semester school year consisted of 9.5 months, with a long vacation in July and August. Urban primary schools typically divided the school week into twenty-four to twenty-seven classes of forty-five minutes each, but in the rural areas the norm was half-day schooling, more flexible schedules, and itinerant teachers. Most primary schools had a five-year course, except in such cities as Beijing and Shanghai, which had reintroduced six-year primary schools and accepted children at six and one-half years rather than seven. The primary-school curriculum consisted of Chinese, mathematics, physical education, music, drawing, and elementary instruction in nature, history, and geography, combined with practical work experiences around the school compound. A general knowledge of politics and moral training, which stressed love of the motherland, love of the party, and love of the people (and previously love of Chairman Mao), was another part of the curriculum. A foreign language, often English, was introduced in about the third grade. Chinese and mathematics accounted for about 60 percent of the scheduled class time; natural science and social science accounted for about 8 percent. Putonghua (common spoken language, see Glossary) was taught in regular schools and pinyin romanization in lower grades and kindergarten. The State Education Commission required that all primary schools offer courses on communist ideology and morality. Beginning in the fourth grade, students usually had to perform productive labor two weeks per semester to relate classwork with production experience in workshops or on farms and subordinate it to academic study. Most schools had after-hour activities at least one day per week--often organized by the Young Pioneers--to involve students in recreation and community service. By 1980 the percentage of students enrolled in primary schools was high, but the schools reported high dropout rates and regional enrollment gaps (most enrollees were concentrated in the cities). Only one in four counties had universal primary education. On the average, 10-percent of the students dropped out between each grade. During the 1979-83 period, the government acknowledged the "9-6-3" rule, that is, that nine of ten children began primary school, six completed it, and three graduated with good performance. This meant that only about 60 percent of primary students actually completed their five year program of study and graduated, and only about 30 percent were regarded as having primary-level competence. Statistics in the mid-1980s showed that more rural girls than boys dropped out of school. Within the framework of the Law on Nine-Year Compulsory Education and the general trend toward vocational and technical skills, attempts were made to accommodate and correct the gap between urban and rural education. Urban and key schools almost invariably operated on a six day full-time schedule to prepare students for further education and high-level jobs. Rural schools generally operated on a flexible schedule geared to the needs of the agricultural seasons and sought to prepare students for adult life and manual labor in lower-skilled jobs. They also offered a more limited curriculum, often only Chinese, mathematics, and morals. To promote attendance and allow the class schedule and academic year to be completed, agricultural seasons were taken into account. School holidays were moved, school days shortened, and full-time, half-time, and spare-time classes offered in the slack agricultural seasons. Sometimes itinerant teachers were hired for mountain villages and served one village in the morning, another village in the afternoon. Rural parents were generally well aware that their children had limited opportunities to further their education. Some parents saw little use in having their children attend even primary school, especially after the establishment of the agricultural responsibility system (see Glossary). Under that system, parents preferred that their children work to increase family income--and withdrew them from school--for both long and short periods of time (see Agricultural Policies, ch. 6). Preschool Education Preschool education, which began at age three and one-half, was another target of education reform in 1985. Preschool facilities were to be established in buildings made available by public enterprises, production teams, municipal authorities, local groups, and families. The government announced that it depended on individual organizations to sponsor their own preschool education and that preschool education was to become a part of the welfare services of various government organizations, institutes, and state-and collectively operated enterprises. Costs for preschool education varied according to services rendered. Officials also called for more preschool teachers with more appropriate training. Special Education The 1985 National Conference on Education also recognized the importance of special education, in the form of programs for gifted children and for slow learners. Gifted children were allowed to skip grades. Slow learners were encouraged to reach minimum standards, although those who did not maintain the pace seldom reached the next stage. For the most part, children with severe learning problems and those with handicaps and psychological needs were the responsibilities of their families. Extra provisions were made for blind and severely hearing-impaired children, although in 1984 special schools enrolled fewer than 2 percent of all eligible children in those categories. The China Welfare Fund, established in 1984, received state funding and had the right to solicit donations within China and from abroad, but special education remained a low government priority. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90031 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 33 DB Rec# - 626 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.04 Title :CHAPTER 4.04: SECONDARY EDUCATION Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : SECONDARY EDUCATION Middle Schools Secondary education in China has a complicated history. In the early 1960s, education planners followed a policy called "walking on two legs," which established both regular academic schools and separate technical schools for vocational training. The rapid expansion of secondary education during the Cultural Revolution created serious problems; because resources were spread too thinly, educational quality declined. Further, this expansion was limited to regular secondary schools; technical schools were closed during the Cultural Revolution because they were viewed as an attempt to provide inferior education to children of worker and peasant families. In the late 1970s, government and party representatives criticized what they termed the "unitary" approach of the 1960s, arguing that it ignored the need for two kinds of graduates: those with an academic education (college preparatory) and those with specialized technical education (vocational). Beginning in 1976 with the renewed emphasis on technical training, technical schools reopened, and their enrollments increased (as did those of key schools, also criticized during the Cultural Revolution). In the drive to spread vocational and technical education, regular secondary-school enrollments fell. By 1986 universal secondary education was part of the nine year compulsory education law that made primary education (six years) and junior-middle-school education (three years) mandatory. The desire to consolidate existing schools and to improve the quality of key middle schools was, however, under the education reform, more important than expanding enrollment. Chinese secondary schools are called middle schools and are divided into junior and senior levels. In 1985 more than 104,000 middle schools (both regular and vocational) enrolled about 51 million students. Junior, or lower, middle schools offered a three year course of study, which students began at twelve years of age. Senior, or upper, middle schools offered a two or three year course, which students began at age fifteen. The regular secondary-school year usually had two semesters, totaling nine months. In some rural areas, schools operated on a shift schedule to accommodate agricultural cycles. The academic curriculum consisted of Chinese, mathematics, physics, chemistry, geology, foreign language, history, geography, politics, physiology, music, fine arts, and physical education. Some middle schools also offered vocational subjects. There were thirty or thirty-one periods a week in addition to self-study and extracurricular activity. Thirty-eight percent of the curriculum at a junior middle school was in Chinese and mathematics, 16 percent in a foreign language. Fifty percent of the teaching at a senior middle school was in natural sciences and mathematics, 30 percent in Chinese and a foreign language. Rural secondary education has undergone several transformations since 1980, when county-level administrative units closed some schools and took over certain schools run by the people's communes (see Glossary). In 1982 the communes were eliminated. In 1985 educational reform legislation officially placed rural secondary schools under local administration. There was a high dropout rate among rural students in general and among secondary students in particular, largely because of parental attitudes. All students, however, especially males, were encouraged to attend secondary school if it would lead to entrance to a college or university (still regarded as prestigious) and escape from village life. In China a senior-middle-school graduate is considered an educated person, although middle schools are viewed as a training ground for colleges and universities. And, while middle-school students are offered the prospect of higher education, they are also confronted with the fact that university admission is limited. Middle schools are evaluated in terms of their success in sending graduates on for higher education, although efforts persist to educate young people to take a place in society as valued and skilled members of the work force. Vocational and Technical Schools Both regular and vocational secondary schools sought to serve modernization needs. A number of technical and "skilled-worker" training schools reopened after the Cultural Revolution, and an effort was made to provide exposure to vocational subjects in general secondary schools (by offering courses in industry, services, business, and agriculture). By 1985 there were almost 3 million vocational and technical students. Under the educational reform tenets, polytechnic colleges were to give priority to admitting secondary vocational and technical school graduates and providing on-the-job training for qualified workers. Education reformers continued to press for the conversion of about 50 percent of upper secondary education into vocational education, which traditionally had been weak in the rural areas. Regular senior middle schools were to be converted into vocational middle schools, and vocational training classes were to be established in some senior middle schools. Diversion of students from academic to technical education was intended to alleviate skill shortages and to reduce the competition for university enrollment. Although enrollment in technical schools of various kinds had not yet increased enough to compensate for decreasing enrollments in regular senior middle schools, the proportion of vocational and technical students to total senior-middle-school students increased from about 5 percent in 1978 to almost 36 percent in 1985, although development was uneven. Further, to encourage greater numbers of junior-middle-school graduates to enter technical schools, vocational and technical school graduates were given priority in job assignments, while other job seekers had to take technical tests. In 1987 there were four kinds of secondary vocational and technical schools: technical schools that offered a four year, post-junior middle course and two- to three-year post-senior middle training in such fields as commerce, legal work, fine arts, and forestry; workers' training schools that accepted students whose senior-middle-school education consisted of two years of training in such trades as carpentry and welding; vocational technical schools that accepted either junior-or senior-middle-school students for one- to three-year courses in cooking, tailoring, photography, and other services; and agricultural middle schools that offered basic subjects and agricultural science. These technical schools had several hundred different programs. Their narrow specializations had advantages in that they offered in-depth training , reducing the need for on-the-job training and thereby lowering learning time and costs. Moreover, students were more motivated to study if there were links between training and future jobs. Much of the training could be done at existing enterprises, where staff and equipment was available at little additional cost. There were some disadvantages to this system, however. Under the Four Modernizations, technically trained generalists were needed more than highly specialized technicians. Also, highly specialized equipment and staff were underused, and there was an overall shortage of specialized facilities to conduct training. In addition, large expenses were incurred in providing the necessary facilities and staff, and the trend in some government technical agencies was toward more general technical and vocational education. Further, the dropout rate continued to have a negative effect on the labor pool as upper-secondary-school technical students dropped out and as the percentage of lower-secondary-school graduates entering the labor market without job training increased. Occupational rigidity and the geographic immobility of the population, particularly in rural areas, further limited educational choices. Although there were 668,000 new polytechnic school enrollments in 1985, the Seventh Five-Year Plan called for annual increases of 2 million mid-level skilled workers and 400,000 senior technicians, indicating that enrollment levels were still far from sufficient. To improve the situation, in July 1986 officials from the State Education Commission, State Planning Commission, and Ministry of Labor and Personnel convened a national conference on developing China's technical and vocational education. It was decided that technical and vocational education in rural areas should accommodate local conditions and be conducted on a short-term basis. Where conditions permitted, emphasis would be placed on organizing technical schools and short-term training classes. To alleviate the shortage of teachers, vocational and technical teachers' colleges were to be reformed and other colleges and universities were to be mobilized for assistance. The State Council decision to improve training for workers who had passed technical examinations (as opposed to unskilled workers) was intended to reinforce the development of vocational and technical schools. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90032 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 34 DB Rec# - 627 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.05 Title :CHAPTER 4.05: HIGHER EDUCATION Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : HIGHER EDUCATION Background Higher education reflects the changes in political policies that have occurred in contemporary China. Since 1949 emphasis has continually been placed on political re-education, and in periods of political upheaval, such as the Great Leap Forward and the Cultural Revolution, ideology has been stressed over professional or technical competence. During the early stages of the Cultural Revolution, tens of thousands of college students joined Red Guard (see Glossary) organizations, effectively closing down the higher education system (see The Cultural Revolution Decade, ch. 1). In general, when universities reopened in the early 1970s, enrollments were reduced from pre-Cultural Revolution levels, and admission was restricted to individuals who had been recommended by their work unit (danwei--see Glossary) possessed good political credentials, and had distinguished themselves in manual labor. In the absence of stringent and reasonably objective entrance examinations, political connections became increasingly important in securing the recommendations and political dossiers necessary to qualify for university admission. As a result, the decline in educational quality was profound. Deng Xiaoping reportedly wrote Mao Zedong in 1975 that university graduates were "not even capable of reading a book" in their own fields when they left the university. University faculty and administrators, moreover, were demoralized by what they faced. Efforts made in 1975 to improve educational quality were unsuccessful. By 1980 it appeared doubtful that the politically oriented admission criteria had accomplished even the purpose of increasing enrollment of worker and peasant children. Successful candidates for university entrance were usually children of cadres and officials who used personal connections that allowed them to "enter through the back door." Students from officials' families would accept the requisite minimum two year work assignment in the countryside, often in a suburban location that allowed them to remain close to their families. Village cadres, anxious to please the parent-official, gladly recommended these youths for university placement after the labor requirement had been met. The child of an official family was then on his or her way to a university without having academic ability, a record of political activism, or a distinguished work record. After 1976 steps were taken to improve educational quality by establishing order and stability, and calling for an end to political contention on university campuses, and expanding university enrollments. This pressure to maintain quality and minimize expenditures led to efforts both to run existing institutions more efficiently and to develop other college and university programs. As a result, labor colleges for training agro-technicians and factory-run colleges for providing technical education for workers were established. In addition, eighty-eight institutions and key universities were provided with special funding, top students and faculty members, and other support, and they recruited the most academically qualified students without regard to family background or political activism. Modernization Goals in the 1980s The commitment to the Four Modernizations required great advances in science and technology. Under the modernization program, higher education was to be the cornerstone for training and research. Because modernization depended on a vastly increased and improved capability to train scientists and engineers for needed breakthroughs, the renewed concern for higher education and academic quality--and the central role that the sciences were expected to play in the Four Modernizations--highlighted the need for scientific research and training. This concern can be traced to the critical personnel shortages and qualitative deficiencies in the sciences resulting from the unproductive years of the Cultural Revolution, when higher education was shut down. In response to the need for scientific training, the Sixth Plenum of the Twelfth National Party Congress Central Committee, held in September 1986, adopted a resolution on the guiding principles for building a socialist society that strongly emphasized the importance of education and science. Reformers realized, however, that the higher education system was far from meeting modernization goals and that additional changes were needed. The Provisional Regulations Concerning the Management of Institutions of Higher Learning, promulgated by the State Council in 1986, initiated vast changes in administration and adjusted educational opportunity, direction, and content. With the increased independence accorded under the education reform, universities and colleges were able to choose their own teaching plans and curricula; to accept projects from or cooperate with other socialist establishments for scientific research and technical development in setting up "combines" involving teaching, scientific research, and production; to suggest appointments and removals of vice presidents and other staff members; to take charge of the distribution of capital construction investment and funds allocated by the state; and to be responsible for the development of international exchanges by using their own funds. The changes also allowed the universities to accept financial aid from work units and decide how this money was to be used without asking for more money from departments in charge of education. Further, higher education institutions and work units could sign contracts for the training of students. Higher education institutions also were assigned a greater role in running interregional and interdepartmental schools. Within their state-approved budgets, universities secured more freedom to allocate funds as they saw fit and to use income from tuition and technical and advisory services for their own development, including collective welfare and bonuses. There also was a renewed interest in television, radio, and correspondence classes. Some of the courses, particularly in the college-run factories, were serious, full-time enterprises, with a two-to three-year curriculum. Entrance Examinations and Admission Criteria National examinations to select students for higher education (and positions of leadership) were an important part of China's culture, and, traditionally, entrance to a higher education institution was considered prestigious. Although the examination system for admission to colleges and universities has undergone many changes since the Cultural Revolution, it remains the basis for recruiting academically able students. When higher education institutions were reopened in early 1970s, candidates for entrance examinations had to be senior-middle-school graduates or the equivalent, generally below twenty-six years of age. Work experience requirements were eliminated, but workers and staff members needed permission from their enterprises to take the examinations. Each provincial-level unit was assigned a quota of students to be admitted to key universities, a second quota of students for regular universities within that administrative division, and a third quota of students from other provinces, autonomous regions, and special municipalities who would be admitted to institutions operated at the provincial level. Provincial-level administrative units selected students with outstanding records to take the examinations. Additionally, preselection examinations were organized by the provinces, autonomous regions, and special municipalities for potential students (from three to five times the number of places allotted). These candidates were actively encouraged to take the examination to ensure that a sufficient number of good applicants would be available. Cadres with at least two years of work experience were recruited for selected departments in a small number of universities on an experimental basis. Preferential admission treatment (in spite of lower test scores) was given to minority candidates, students from disadvantaged areas, and those who agreed in advance to work in less developed regions after graduation. In December 1977, when uniform national examinations were reinstated, 5.7 million students took the examinations, although university placement was available for only the 278,000 applicants with the highest scores. In July 1984, about 1.6 million candidates (30,000 fewer than in 1983) took the entrance examinations for the 430,000 places in China's more than 900 colleges and universities. Of the 1.6 million examinees, more than 1 million took the test for placement in science and engineering colleges; 415,000 for places in liberal arts colleges; 88,000 for placement in foreign language institutions; and 15,000 for placement in sports universities and schools. More than 100,000 of the candidates were from national minority groups. A year later, there were approximately 1.8 million students taking the three day college entrance examination to compete for 560,000 places. Liberal arts candidates were tested on politics, Chinese, mathematics, foreign languages, history, and geography. Science and engineering candidates were tested on politics, Chinese, mathematics, chemistry, and biology. Entrance examinations also were given in 1985 for professional and technical schools, which sought to enroll 550,000 new students. Other innovations in enrollment practices, included allowing colleges and universities to admit students with good academic records but relatively low entrance-examination scores. Some colleges were allowed to try an experimental student recommendation system--fixed at 2 percent of the total enrollment for regular colleges and 5 percent for teachers' colleges--instead of the traditional entrance examination. A minimum national examination score was established for admission to specific departments at specially designated colleges and universities, and the minimum score for admission to other universities was set by provincial-level authorities. Key universities established separate classes for minorities. When several applicants attained the minimum test score, the school had the option of making a selection, a policy that gave university faculty and administrators a certain amount of discretion but still protected admission according to academic ability. In addition to the written examination, university applicants had to pass a physical examination and a political screening. Less than 2 percent of the students who passed the written test were eliminated for reasons of poor health. The number disqualified for political reasons was known, but publicly the party maintained that the number was very small and that it sought to ensure that only the most able students actually entered colleges and universities. By 1985 the number of institutions of higher learning had again increased--to slightly more than 1,000. The State Education Commission and the Ministry of Finance issued a joint declaration for nationwide unified enrollment of adult students--not the regular secondary-school graduates but the members of the work force who qualified for admission by taking a test. The State Education Commission established unified questions and time and evaluation criteria for the test and authorized provinces, autonomous regions, and special municipalities to administer the test, grade the papers in a uniform manner, and determine the minimum points required for admission. The various schools were to enroll students according to the results. Adult students needed to have the educational equivalent of senior-middle- school graduates, and those applying for release or partial release from work to study were to be under forty years of age. Staff members and workers were to apply to study job-related subjects with review by and approval of their respective work units. If employers paid for the college courses, the workers had to take entrance examinations. In 1985 colleges enrolled 33,000 employees from various enterprises and companies, approximately 6 percent of the total college enrollment. In 1985 state quotas for university places were set, allowing both for students sponsored by institutions and for those paying their own expenses. This policy was a change from the previous system in which all students were enrolled according to guidelines established in Beijing. All students except those at teachers' colleges, those who had financial difficulties, and those who were to work under adverse conditions after graduation had to pay for their own tuition, accommodations, and miscellaneous expenses. Changes in Enrollment and Assignment Policies The student enrollment and graduate assignment system also was changed to reflect more closely the personnel needs of modernization. By 1986 the state was responsible for drafting the enrollment plan, which took into account future personnel demands, the need to recruit students from outlying regions, and the needs of trades and professions with adverse working conditions. Moreover, a certain number of graduates to be trained for the People's Liberation Army were included in the state enrollment plan. In most cases, enrollment in higher education institutions at the employers' request was extended as a supplement to the state student enrollment plan. Employers were to pay a percentage of training fees, and students were to fulfill contractual obligations to the employers after graduation. The small number of students who attended colleges and universities at their own expense could be enrolled in addition to those in the state plan. Accompanying the changes in enrollment practices were reforms, adopted in 1986, in the faculty appointment system, which ended the "iron rice bowl" (see Glossary) employment system and gave colleges and universities freedom to decide what departments, majors, and numbers of teachers they needed. Teachers in institutions of higher learning were hired on a renewable contract basis, usually for two to four years at a time. The teaching positions available on basis were teaching assistant, lecturer, associate professor, and professor. The system was tested in eight major universities in Beijing and Shanghai before it was instituted nationwide at the end of 1985. University presidents headed groups in charge of appointing professors, lecturers, and teaching assistants according to their academic levels and teaching abilities, and a more rational wage system, geared to different job levels, was inaugurated. Universities and colleges with surplus professors and researchers were advised to grant them appropriate academic titles and encourage them to work for their current pay in schools of higher learning where they were needed. The new system was to be extended to schools of all kinds and other education departments within two years. Under the 1985 reforms, all graduates were assigned jobs by the state; a central government placement agency told the schools where to send graduates. By 1985 Qinghua University and a few other universities were experimenting with a system that allowed graduates to accept job offers or to look for their own positions. For example, of 1,900 Qinghua University graduates in 1985, 1,200 went on to graduate school, 48 looked for their own jobs, and the remainder were assigned jobs by the school after consultation with the students. The college students and postgraduates scheduled to graduate in 1986 were assigned primarily to work in forestry, education, textiles, and the armaments industry. Graduates still were needed in civil engineering, computer science, finance, and English. Scholarship and Loan System In July 1986 the State Council announced that the stipend system for university and college students would be replaced with a new scholarship and loan system. The new system, to be tested in selected institutions during the 1986-87 academic year, was designed to help students who could not cover their own living expenses but who studied hard, obeyed state laws, and observed discipline codes. Students eligible for financial aid were to apply to the schools and the China Industrial and Commercial Bank for low-interest loans. Three categories of students eligible for aid were established: top students encouraged to attain all-around excellence; students specializing in education, agriculture, forestry, sports, and marine navigation; and students willing to work in poor, remote, and border regions or under harsh conditions, such as in mining and engineering. In addition, free tuition and board were to be offered at teachers' colleges, and the graduates were required to teach at least five years in primary and middle schools. After graduation, a student's loans were to be paid off by his or her employer in a lump sum, and the money was to be repaid to the employer by the student through five years of payroll deductions. Study Abroad In addition to loans, another means of raising educational quality, particularly in science, was to send students abroad to study. A large number of Chinese students studied in the Soviet Union before educational links and other cooperative programs with the Soviet Union were severed in the late 1950s. In the 1960s and 1970s, China continued to send a small number of students abroad, primarily to European universities. In October 1978 Chinese students began to arrive in the United States; their numbers accelerated after normalization of relations between the two countries in January 1979, a policy consistent with modernization needs. Although figures vary, more than 36,000 students, including 7,000 self-supporting students (those who paid their own way, received scholarships from host institutions, or received help from relatives and "foreign friends"), studied in 14 countries between 1978 and 1984. Of this total, 78 percent were technical personnel sent abroad for advanced study. As of mid-1986 there were 15,000 Chinese scholars and graduates in American universities, compared with the total of 19,000 scholars sent between 1979 and 1983. Chinese students sent to the United States generally were not typical undergraduates or graduate students but were mid-career scientists, often thirty-five to forty-five years of age, seeking advanced training in their areas of specialization. Often they were individuals of exceptional ability who occupied responsible positions in Chinese universities and research institutions. Fewer than 15 percent of the earliest arrivals were degree candidates. Nearly all the visiting scholars were in scientific fields. Educational Investment Many of the problems that had hindered higher educational development in the past continued in 1987. Funding remained a major problem because science and technology study and research and study abroad were expensive. Because education was competing with other modernization programs, capital was critically short. Another concern was whether or not the Chinese economy was sufficiently advanced to make efficient use of the highly trained technical personnel it planned to educate. For example, some observers believed that it would be more realistic to train a literate work force of low-level technicians instead of than research scientists. Moreover, it was feared that using an examination to recruit the most able students might advance people who were merely good at taking examinations. Educational reforms also made some people uncomfortable by criticizing the traditional practice of rote memorization and promoting innovative teaching and study methods. The prestige associated with higher education caused a demand for it. But many qualified youths were unable to attend colleges and universities because China could not finance enough university places for them. To help meet the demand and to educate a highly trained, specialized work force, China established alternate forms of higher education--such as spare-time, part-time, and radio and television universities. China cannot afford a heavy investment, either ideologically or financially, in the education of a few students. Since 1978 China's leaders have modified the policy of concentrating education resources at the university level, which, although designed to facilitate modernization, conflicted directly with the party's principles. The policies that produced an educated elite also siphoned off resources that might have been used to accomplish the compulsory nine year education more speedily and to equalize educational opportunities in the city and the countryside. The policy of key schools has been modified over the years. Nevertheless, China's leaders believe an educated elite is necessary to reach modernization goals. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90033 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 35 DB Rec# - 628 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.06 Title :CHAPTER 4.06: TEACHERS Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : TEACHERS Among the most pressing problems facing education reformers was the scarcity of qualified teachers, which has led to a serious stunting of educational development. In 1986 there were about 8 million primary- and middle-school teachers in China, but many lacked professional training. Estimates indicated that in order to meet the goals of the Seventh Five-Year Plan and realize compulsory 9-year education, the system needed 1 million new teachers for primary schools, 750,000 new teachers for junior middle schools, and 300,000 new teachers for senior middle schools. Estimates predict, however, that the demand for teachers will drop in the late 1990s because of an anticipated decrease in primary-school enrollments. To cope with the shortage of qualified teachers, the State Education Commission decreed in 1985 that senior-middle-school teachers should be graduates with two years' training in professional institutes and that primary-school teachers should be graduates of secondary schools. To improve teacher quality, the commission established full-time and part-time (the latter preferred because it was less costly) in-service training programs. Primary-school and preschool in-service teacher training programs devoted 84 percent of the time to subject teaching, 6 percent to pedagogy and psychology, and 10 percent to teaching methods. In-service training for primary-school teachers was designed to raise them to a level of approximately two years' postsecondary study, with the goal of qualifying most primary-school teachers by 1990. Secondary-school in-service teacher training was based on a unified model, tailored to meet local conditions, and offered on a spare-time basis. Ninety-five percent of its curricula was devoted to subject teaching, 2 to 3 percent to pedagogy and psychology, and 2 to 3 percent to teaching methods. There was no similar large-scale in-service effort for technical and vocational teachers, most of whom worked for enterprises and local authorities. By 1985 there were more than 1,000 teacher training schools--an indispensable tool in the effort to solve the acute shortage of qualified teachers. These schools, however, were unable to supply the number of teachers needed to attain modernization goals through 1990. Although a considerable number of students graduated as qualified teachers from institutions of higher learning, the relatively low social status and salary levels of teachers hampered recruitment, and not all of the graduates of teachers' colleges became teachers. To attract more teachers, China tried to make teaching a more desirable and respected profession. To this end, the government designated September 10 as Teachers' Day, granted teachers pay raises, and made teachers' colleges tuition free. To further arrest the teacher shortage, in 1986 the central government sent teachers to underdeveloped regions to train local schoolteachers. Because urban teachers continued to earn more than their rural counterparts and because academic standards in the countryside had dropped, it remained difficult to recruit teachers for rural areas. Teachers in rural areas also had production responsibilities for their plots of land, which took time from their teaching. Rural primary teachers needed to supplement their pay by farming because most were paid by the relatively poor local communities rather than by the state. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90034 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 36 DB Rec# - 629 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.07 Title :CHAPTER 4.07: ADULT EDUCATION Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : ADULT EDUCATION Role in Modernization Because only 4 percent of the nation's middle-school graduates are admitted to universities, China has found it necessary to develop other ways of meeting the demand for education. Adult education has become increasingly important in helping China meet its modernization goals. Adult, or "nonformal," education is an alternative form of higher education that encompasses radio, television, and correspondence universities, spare-time and part-time universities, factory-run universities for staff and workers, and county-run universities for peasants, many operating primarily during students' off-work hours. These alternative forms of education are economical. They seek to educate both the "delayed generation"--those who lost educational opportunities during the Cultural Revolution--and to raise the cultural, scientific, and general education levels of workers on the job. Alternative Forms Schools have been established by government departments, businesses, trade unions, academic societies, democratic parties (see Glossary), and other organizations. In 1984 about 70 percent of China's factories and enterprises supported their own part-time classes, which often were referred to as workers' colleges. In Beijing alone, more than ninety adult-education schools with night schools enrolled tens of thousands of students. More than 20,000 of these students graduated annually from evening universities, workers' colleges, television universities, and correspondence schools--more than twice the number graduating from regular colleges and universities. The government spent -Y200 (for value of the yuan--see Glossary) to -Y500 per adult education student and at least -1,000 per regular university student. In 1984 approximately 1.3 million students enrolled in television, correspondence, and evening universities, about a 30-percent increase over 1983. Spare-time education for workers and peasants and literacy classes for the entire adult population were other components of basic education. Spare-time education included a very broad range of educational activities at all levels. Most spare-time schools were sponsored by factories and run for their own workers; they provided fairly elementary education, as well as courses to upgrade technical skills. Most were on-the-job training and retraining courses, a normal part of any industrial system. These schools continually received publicity in the domestic media as a symbol of social justice, but it was unclear whether they received adequate resources to achieve this end. China's educational television system began in 1960 but was suspended during the Cultural Revolution in 1966. In 1979 the Central Radio and Television University was established in Beijing with branches in twenty-eight provincial-level universities. Many Central Radio and Television University students are recent senior-middle-school graduates who scored just below the cut-off point for admission to conventional colleges and universities. Full-time (who take four courses) and part-time students (two courses) have at least two years' work experience, and they return to their jobs after graduation. Spare-time students (one course) study after work. Students whose work units grant them permission to study in a television university are paid their normal wages; expenses for most of their books and other educational materials are paid for by the state. A typical Central Radio and Television University student spends up to six hours a day over a three-year period watching lectures on videotapes produced by some of the best teachers in China. These lectures are augmented by face-to-face tutoring by local instructors and approximately four hours of homework each evening. The major problem with the system is that there are too few television sets. In 1987 the Central Television and Radio University had its programs produced, transmitted and financed by the Ministry of Radio, Cinema, and Television (see Telecommunications Services, ch. 8). The State Education Commission developed its curriculum and distributed its printed support materials. Curriculum included both basic, general-purpose courses in science and technology and more specialized courses. Programs in English-language instruction were particularly popular. The Central Television and Radio University offered more than 1,000 classes in Beijing and its suburbs and 14 majors in 2- to 3-year courses through 56 working centers. Students who passed final examinations were given certificates entitling them to the same level of remuneration as graduates of regular, full-time colleges and universities. The state gave certain allowances to students awaiting jobs during their training period. Literacy and Language Reform The continuing campaigns to eradicate illiteracy also were a part of basic education. Chinese government statistics indicated that of a total population of nearly 1.1 billion in 1985, about 230 million people were illiterate or semiliterate. The difficulty of mastering written Chinese makes raising the literacy rate particularly difficult. In general, language reform was intended to make written and spoken Chinese easier to learn, which in turn would foster both literacy and linguistic unity and serve as a foundation for a simpler written language. In 1951 the party issued a directive that inaugurated a three-part plan for language reform. The plan sought to establish universal comprehension of a standardized common language, simplify written characters, and introduce, where possible, romanized forms based on the Latin alphabet. In 1956 putonghua was introduced as the language of instruction in schools and in the national broadcast media, and by 1977 it was in use throughout China, particularly in the government and party, and in education. Although in 1987 the government continued to endorse the goal of universalizing putonghua, hundreds of regional and local dialects continued to be spoken, complicating interregional communication. A second language reform required the simplification of ideographs because ideographs with fewer strokes are easier to learn. In 1964 the Committee for Reforming the Chinese Written Language released an official list of 2,238 simplified characters most basic to the language. Simplification made literacy easier, although people taught only in simplified characters were cut off from the wealth of Chinese literature written in traditional characters. Any idea of replacing ideographic script with romanized script was soon abandoned, however by government and education leaders. A third area of change involved the proposal to use the pinyin romanization system more widely. Pinyin (first approved by the National People's Congress in 1958) was encouraged primarily to facilitate the spread of putonghua in regions where other dialects and languages are spoken. By the mid-1980s, however, the use of pinyin was not as widespread as the use of putonghua. Retaining literacy was as much a problem as acquiring it, particularly among the rural population. Literacy rates declined between 1966 and 1976. Political disorder may have contributed to the decline, but the basic problem was that the many Chinese ideographs can be mastered only through rote learning and are often forgotten because of disuse. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90035 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 37 DB Rec# - 630 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.08 Title :CHAPTER 4.08: POLICY TOWARD INTELLECTUALS Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : POLICY TOWARD INTELLECTUALS Background The current status of Chinese intellectuals reflects traditions established in the imperial period. For most of this period, government officials were selected from among the literati on the basis of the Confucian civil service examination system (see Restoration of Empire, ch. 1; Traditional Society and Culture, ch. 3). Intellectuals were both participants in and critics of the government. As Confucian scholars, they were torn between their loyalty to the emperor and their obligation to "correct wrong thinking" when they perceived it. Then, as now, most intellectual and government leaders subscribed to the premise that ideological change was a prerequisite for political change. Historically, Chinese intellectuals rarely formed groups to oppose the established government. Rather, individual intellectuals or groups of intellectuals allied themselves with cliques within the government to lend support to the policies of that clique. With the abolition of the civil service examination system in 1905 and the end of the last imperial dynasty in 1911, intellectuals no longer had a vehicle for direct participation in the government. Although the absence of a strong national government would have been expected to provide a favorable situation for maximum intellectual independence, other inhibiting factors--such as the concentration of intellectuals in foreign-controlled treaty ports, isolated from the mainstream of Chinese society, or in universities dependent on government or missionary financing--remained. Probably the greatest obstacle to the development of an intellectual community free of outside control was the rising tide of nationalism coupled with the fear of being accused of selling out to foreign interests. In 1927 the newly established Guomindang government in Nanjing attempted to establish an intellectual orthodoxy based on the ideas of Sun Yat-sen, but intellectuals continued to operate with a certain degree of freedom in universities and treaty ports (see Nationalism and Communism, ch. 1). Following the Japanese invasion and occupation of large parts of China in 1937, the Guomindang government tightened control over every aspect of life, causing a large number of dissident intellectuals to seek refuge in Communist-administered areas or in Hong Kong. When the People's Republic of China was established in 1949, intellectuals came under strict government control. Educated overseas Chinese (see Glossary) were invited to return home, and those intellectuals who remained in China were urged to contribute their technical expertise to rebuilding the country. Intellectuals were expected to serve the party and the state. Independent thinking was stifled, and political dissent was not tolerated. In mid-1956 the Chinese Communist Party felt secure enough to launch the Hundred Flowers Campaign (see Glossary) soliciting criticism under the classical "double hundred" slogan "Let a hundred flowers bloom, let the hundred schools of thought contend." "Let a hundred flowers bloom" applied to the development of the arts, and "let the hundred schools of thought contend" encouraged the development of science. The initiation of this campaign was followed by the publication in early 1957 of Mao Zedong's essay "On the Correct Handling of Contradictions among the People," in which he drew a distinction between "constructive criticisms among the people" and "hateful and destructive criticism between the enemy and ourselves." In August 1957, when it was clear to the leadership that widespread criticism of the party and party cadres had gotten out of hand, the Anti-Rightist Campaign was launched to suppress all divergent thought and firmly reestablish orthodox ideology. Writers who had answered the party's invitation to offer criticisms and alternative solutions to China's problems were abruptly silenced, and many were sent to reform camps or internal exile. By the early 1960s, however, a few intellectuals within the party were bold enough to again propose policy alternatives, within stringent limits. When the Cultural Revolution began in 1966, party functionaries assumed positions of leadership at most research institutes and universities, and many schools were closed or converted to "soldiers', workers', and peasants' universities." Intellectuals, denounced as the "stinking ninth category," either were purged or had their work heavily edited for political "purity", which severely hampered most serious research and scholarship. Following the fall of Lin Biao, Minister of National Defense and Mao's heir apparent, in 1971, the atmosphere for intellectuals began to improve. Under the aegis of Zhou Enlai and later Deng Xiaoping, many intellectuals were restored to their former positions and warily resumed their pre-Cultural Revolution duties. In January 1975 Zhou Enlai set out his ambitious Four Modernizations (see Glossary) program and solicited the support of China's intellectuals in turning China into a modern industrialized nation by the end of the century (see The Cultural Revolution Decade, 1966-76; The Post-Mao Period, 1976-78, ch. 1). Post-Mao Development The Third Plenum of the Eleventh National Party Congress Central Committee in December 1978 officially made the Four Modernizations basic national policy and reemphasized the importance of intellectuals in achieving them. The policy of "seeking truth from facts" was stressed, and scholars and researchers were given freer rein to pursue scientific research. Most mainstream intellectuals were content to avoid political involvement and to take on the role of scholar- specialists within their spheres of competence, with the understanding that as long as they observed the four cardinal principles--upholding socialism, the dictatorship of the proletariat, the leadership of the party, and Marxism-Leninism-Mao Zedong Thought--they would be permitted to conduct their research with minimal bureaucratic interference. This was accomplished more easily in the natural sciences, which are generally recognized as apolitical, than in the social sciences, humanities, and the arts. The first serious challenge to the more tolerant policy toward intellectuals came in 1980, as conservative ideologues in the military and the party stepped up their calls to combat "bourgeois liberalization," a loosely defined appellation for any writing or activity believed to stretch the limits of the four cardinal principles. By early 1981 opposition to "bourgeois liberalization" was focused on Bai Hua, a writer with the Political Department of what was then the Wuhan Military Region. Bai had long been a strong advocate for relaxation of cultural and social policy, but what especially alarmed the guardians of cultural orthodoxy was his screenplay "Bitter Love," which depicted the frustrated patriotism of an old painter who faces misunderstanding and ill-treatment when he returns to China from the United States. When the screenplay first appeared in a nationally circulated literary magazine in the fall of 1979, it caused little stir. The motion picture version however, which was shown to selected officials, drew strong censure. A commentary in the April 18, 1981, issue of Jiefangjun Bao (Liberation Army Daily) accused Bai Hua of violating the four cardinal principles and described the screenplay as an example of "bourgeois liberalism." The commentary was reprinted in the next month's issue of Jiefangjun Wenyi (Liberation Army Literature and Art), along with other articles critical of "Bitter Love." Over the next few months the criticism was taken up by most civilian newspapers, and acting minister of culture, Zhou Weizhi, singled out "Bitter Love" for attack in a speech delivered to the Twentieth Session of the Fifth National People's Congress Standing Committee in September. Finally, Bai Hua yielded to the ostracism and wrote a letter of self-criticism addressed to Jiefangjun Bao and Wenyibao (Literary Gazette), in which he apologized for a "lack of balance" in "Bitter Love" and for failing to recognize the power of the party and the people to overcome obstacles in Chinese society. Bai Hua was out of public view for the next year but remained active, writing four short stories in the period. In January 1983 he was invited by the Ministry of Culture to participate in a Shanghai conference on film scripts, and in May of that year the Beijing People's Art Theater presented his new historical play, "The King of Wu's Golden Spear and the King of Yue's Sword," thought by many to be a veiled criticism of Mao Zedong and perhaps even of Deng Xiaoping. Although the "Bitter Love" controversy caused considerable anxiety in the intellectual community, it is as noteworthy for what it did not do as for what it did do. Unlike previous campaigns in which writers and all of their works were condemned, criticism in this case focused on one work, "Bitter Love." Neither Bai Hua's other works nor his political difficulties in the 1950s and 1960s were part of the discussion. In fact, as if to emphasize the limited nature of the campaign, at its height in May 1981 Bai was given a national prize for poetry by the Chinese Writers' Association. After a mild respite in 1982 and most of 1983, "antibourgeois liberalism" returned in full force in the short-lived campaign against "spiritual pollution" launched by a speech given by Deng Xiaoping at the Second Plenum of the Twelfth National Party Congress Central Committee in October 1983. In the speech, Deng inveighed against advocates of abstract theories of human nature, "bourgeois humanitarianism," "bourgeois liberalism," and socialist alienation, as well as the growing fascination in China with "decadent elements" from Western culture. Conservatives, led by Political Bureau member Hu Qiaomu and party Propaganda Department head Deng Liqun, used the campaign in an effort to oppose those aspects of society that they disliked. The campaign soon was out of control and extended to areas beyond the scope that Deng Xiaoping had intended, raising fears at home and abroad of another Cultural Revolution. Because of the campaign against spiritual pollution, intellectuals (including scientists and managerial and technical personnel) and party and government cadres were hesitant to take any action that could expose them to criticism. Peasants, whose production had greatly increased under the responsibility system adopted in 1981, felt uncertain about the future course of central policy (see Post-Mao Policies, ch. 6). Because of this, many of them returned their specialized certificates and contracts to local authorities, sold their equipment, and lowered production targets. Many ordinary citizens, especially the young, resented the sudden interference in their private lives. Foreign businessmen and government leaders expressed serious reservations about the investment climate and China's policy of opening to the world. Because of these adverse results, the central leadership reevaluated the campaign and limited it to theoretical, literary, and artistic circles and did not permit it to extend to science and technology, the economy, or rural areas. All ideological, theoretical, literary, and artistic issues were to be settled through discussion, criticism, and self-criticism, without resorting to labeling or attacks. By January 1984 the campaign against spiritual pollution had died out, and attention was once more turned to reducing leftist influence in government and society. Following the campaign's failure, and perhaps because of it, the position and security of intellectuals improved significantly. In 1984 the party and government turned their attention to promoting urban economic reforms. A more positive approach to academic and cultural pursuits was reflected in periodic exhortations in the official press calling on the people to support and encourage the building of "socialist spiritual civilization," a term used to denote general intellectual activity, including ethics and morality, science, and culture. Writers and other intellectuals were heartened by a speech delivered by Hu Qili, secretary of the party Secretariat, to the Fourth National Writers' Congress (December 29, 1984, to January 5, 1985). In the speech, Hu decried the political excesses that produced derogatory labels and decrees about what writers should and should not write and called literary freedom "a vital part of socialist literature." But as writers began to test the limits of the free expression called for by Hu Qili, they were reminded of their "social responsibilities," a thinly veiled warning for them to use self-censorship and to remain within the limits of free expression. These limits, still poorly defined, were tested once again when Song Longxian, a young researcher at Nanjing University, using the pseudonym Ma Ding, published an article entitled "Ten Changes in Contemporary Chinese Economic Research" in the November 2, 1985, issue of the trade union paper Gongren Ribao (Workers' Daily). The article urged a pragmatic approach to economic theory and sharply attacked much previous economic research. A somewhat toned-downed version was republished in a subsequent issue of Beijing Review, a weekly magazine for foreign readers, and immediately became the center of a controversy continuing well into 1986. Ma Ding's supporters, however, far outnumbered his critics and included some important government officials. In May 1986 the editor of Gongren Ribao, writing in another economic journal, summed up the controversy. He termed the criticism of the article of far greater significance than the article itself and commended the "related departments" for handling the "Ma Ding incident very prudently" and "relatively satisfactorily," but he expressed the hope that "more people in our country, particularly leaders," would join in "providing powerful protection to the theoretical workers who are brave enough to explore." In 1986 there were numerous calls for a new Hundred Flowers Campaign, and there were indications that these calls were being orchestrated from the top. At a May 1986 conference to commemorate the thirtieth anniversary of the original Hundred Flowers Campaign, Zhu Houze, new head of the party's Propaganda Department, sounded the keynote when he said, "Only through the comparison and contention of different viewpoints and ideas can people gradually arrive at a truthful understanding. . . ." Qin Jianxian, editor of Shijie Jingji Daobao (World Economic Journal), carried this theme further when he called for "unprecedented shocks to political, economic, and social life as well as to people's ideas, spiritual state, lifestyle, and thinking methods." In a July 1986 interview with Beijing Review, Wang Meng, the newly appointed minister of culture, held out great expectations for a new Hundred Flowers Campaign that he said "could arouse the enthusiasm of writers and artists and give them the leeway to display their individual artistic character." During the summer of 1986, expectations were raised for a resolution to come out of the Sixth Plenum of the Twelfth National Party Congress Central Committee in September, a resolution that General Secretary Hu Yaobang promised would have a "profound influence on the development of spiritual civilization." The actual document, however, was a watered-down compromise that fell far short of expectations. It became clear that intellectual policy is not a matter to be easily resolved in the short-term but requires lengthy debate. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90036 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 38 DB Rec# - 631 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH4.09 Title :CHAPTER 4.09: CULTURE AND THE ARTS Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : CULTURE AND THE ARTS Traditional Literature Classics China has a wealth of classical literature, both poetry and prose, dating from the Eastern Zhou dynasty (770-221 B.C.) and including the Classics attributed to Confucius (see The Zhou Period, ch. 1; Traditional Society and Culture, ch. 3). Among the most important classics in Chinese literature is the Yijing (Book of Changes), a manual of divination based on eight trigrams attributed to the mythical emperor Fu Xi. (By Confucius' time these eight trigrams had been multiplied to sixty-four hexagrams.) The Yijing is still used by adherents of folk religion. The Shijing (Classic of Poetry) is made up of 305 poems divided into 160 folk songs; 74 minor festal songs, traditionally sung at court festivities; 31 major festal songs, sung at more solemn court ceremonies; and 40 hymns and eulogies, sung at sacrifices to gods and ancestral spirits of the royal house. The Shujing (Classic of Documents) is a collection of documents and speeches alleged to have been written by rulers and officials of the early Zhou period and before. It contains the best examples of early Chinese prose. The Liji (Record of Rites), a restoration of the original Lijing (Classic of Rites), lost in the third century B.C., describes ancient rites and court ceremonies. The Chun Qiu (Spring and Autumn) is a historical record of the principality of Lu, Confucius' native state, from 722 to 479 B.C. It is a log of concise entries probably compiled by Confucius himself. The Lunyu (Analects) is a book of pithy sayings attributed to Confucius and recorded by his disciples. Early Prose The proponents of the Hundred Schools of Thought in the Warring States and Spring and Autumn periods made important contributions to Chinese prose style (see The Hundred Schools of Thought, ch. 1). The writings of Mo Zi (Mo Di, 470-391 B.C.?), Mencius (Meng Zi; 372-289 B.C.), and Zhuang Zi (369-286 B.C.) contain well-reasoned, carefully developed discourses and show a marked improvement in organization and style over what went before. Mo Zi is known for extensively and effectively using methodological reasoning in his polemic prose. Mencius contributed elegant diction and, along with Zhuang Zi, is known for his extensive use of comparisons, anecdotes, and allegories. By the third century B.C., these writers had developed a simple, concise prose noted for its economy of words, which served as a model of literary form for over 2,000 years. Early Poetry Among the earliest and most influential poetic anthologies was the Chuci (Songs of Chu), made up primarily of poems ascribed to the semilegendary Qu Yuan (ca. 340-278 B.C.) and his follower Song Yu (fourth century B.C.). The songs in this collection are more lyrical and romantic and represent a different tradition from the earlier Shijing. During the Han dynasty (206 B.C.-A.D. 220), this form evolved into the fu, a poem usually in rhymed verse except for introductory and concluding passages that are in prose, often in the form of questions and answers. The era of disunity that followed the Han period saw the rise of romantic nature poetry heavily influenced by Taoism. Classical poetry reached its zenith during the Tang dynasty (A.D. 618-907). The early Tang period was best known for its lshi (regulated verse), an eight-line poem with five or seven words in each line; zi (verse following strict rules of prosody); and jueju (truncated verse), a four-line poem with five or seven words in each line. The two best-known poets of the period were Li Bai (701-762) and Du Fu (712-770). Li Bai was known for the romanticism of his poetry; Du Fu was seen as a Confucian moralist with a strict sense of duty toward society. Later Tang poets developed greater realism and social criticism and refined the art of narration. One of the best known of the later Tang poets was Bai Juyi (772-846), whose poems were an inspired and critical comment on the society of his time. Subsequent writers of classical poetry lived under the shadow of their great Tang predecessors, and although there were many fine poets in subsequent dynasties, none reached the level of this period. As the classical style of poetry became more stultified, a more flexible poetic medium, the ci, arrived on the scene. The ci, a poetic form based on the tunes of popular songs, some of Central Asian origin, was developed to its fullest by the poets of the Song dynasty (960-1279). As the ci gradually became more literary and artificial after Song times, the san qu, a freer form, based on new popular songs, developed. The use of san qu songs in drama marked an important step in the development of vernacular literature. Later Prose The Tang period also saw a rejection of the ornate, artificial style of prose developed in the previous period and the emergence of a simple, direct, and forceful prose based on Han and pre-Han writing. The primary proponent of this neoclassical style of prose, which heavily influenced prose writing for the next 800 years, was Han Yu (768-824), a master essayist and strong advocate of a return to Confucian orthodoxy. Vernacular fiction became popular after the fourteenth century, although it was never esteemed in court circles. Covering a broader range of subject matter and longer and less highly structured than literary fiction, vernacular fiction includes a number of masterpieces. The greatest is the eighteenth-century domestic novel Hong Lou Meng (Dream of the Red Chamber). A semiautobiographical work by a scion of a declining gentry family, Hong Lou Meng has been acknowledged by students of Chinese fiction to be the masterwork of its type. Modern Prose In the New Culture Movement (1917-23; see Glossary), literary writing style was largely replaced by the vernacular in all areas of literature (see Nationalism and Communism, ch. 1). This was brought about mainly by Lu Xun (1881-1936), China's first major stylist in vernacular prose (other than the novel), and the literary reformers Hu Shi (1891-1962) and Chen Duxiu (1880-1942). The late 1920s and 1930s were years of creativity in Chinese fiction, and literary journals and societies espousing various artistic theories proliferated. Among the major writers of the period were Guo Moruo (1892-1978), a poet, historian, essayist, and critic; Mao Dun (1896-1981), the first of the novelists to emerge from the League of Left-Wing Writers and one whose work reflected the revolutionary struggle and disillusionment of the late 1920s; and Ba Jin (b. 1904), a novelist whose work was influenced by Ivan Turgenev and other Russian writers. In the 1930s Ba Jin produced a trilogy that depicted the struggle of modern youth against the age-old dominance of the Confucian family system. Comparison often is made between Jia (Family), one of the novels in the trilogy, and Hong Lou Meng. Another writer of the period was the gifted satirist and novelist Lao She (1899-1966). Many of these writers became important as administrators of artistic and literary policy after 1949. Most of those still alive during the Cultural Revolution were either purged or forced to submit to public humiliation (see The Cultural Revolution Decade, 1966-76, ch. 1). The League of Left-Wing Writers was founded in 1930 and included Lu Xun in its leadership. By 1932 it had adopted the Soviet doctrine of socialist realism, that is, the insistence that art must concentrate on contemporary events in a realistic way, exposing the ills of nonsocialist society and promoting the glorious future under communism. After 1949 socialist realism, based on Mao's famous 1942 "Yan'an Talks on Literature and Art," became the uniform style of Chinese authors whose works were published. Conflict, however, soon developed between the government and the writers. The ability to satirize and expose the evils in contemporary society that had made writers useful to the Chinese Communist Party before its accession to power was no longer welcomed. Even more unwelcome to the party was the persistence among writers of what was deplored as "petty bourgeois idealism," "humanitarianism," and an insistence on freedom to choose subject matter. At the time of the Great Leap Forward, the government increased its insistence on the use of socialist realism and combined with it so-called revolutionary realism and revolutionary romanticism (see The Great Leap Forward, 1958-60, ch. 1). Authors were permitted to write about contemporary China, as well as other times during China's modern period--as long as it was accomplished with the desired socialist revolutionary realism. Nonetheless, the political restrictions discouraged many writers. Although authors were encouraged to write, production of literature fell off to the point that in 1962 only forty-two novels were published. During the Cultural Revolution, the repression and intimidation led by Mao's fourth wife, Jiang Qing, succeeded in drying up all cultural activity except a few "model" operas and heroic stories. Although it has since been learned that some writers continued to produce in secret, during that period no significant literary work was published. Literature in the Post-Mao Period The arrest of Jiang Qing and the other members of the Gang of Four (see Glossary) in 1976, and especially the reforms initiated at the Third Plenum of the Eleventh National Party Congress Central Committee in December 1978, led more and more older writers and some younger writers to take up their pens again. Much of the literature discussed the serious abuses of power that had taken place at both the national and the local levels during the Cultural Revolution. The writers decried the waste of time and talent during that decade and bemoaned abuses that had held China back. At the same time, the writers expressed eagerness to make a contribution to building Chinese society. This literature, often called "the literature of the wounded," contained some disquieting views of the party and the political system. Intensely patriotic, these authors wrote cynically of the political leadership that gave rise to the extreme chaos and disorder of the Cultural Revolution. Some of them extended the blame to the entire generation of leaders and to the political system itself. The political authorities were faced with a serious problem: how could they encourage writers to criticize and discredit the abuses of the Cultural Revolution without allowing that criticism to go beyond what they considered tolerable limits? During this period, a large number of novels and short stories were published; literary magazines from before the Cultural Revolution were revived, and new ones were added to satisfy the seemingly insatiable appetite of the reading public. There was a special interest in foreign works. Linguists were commissioned to translate recently published foreign literature, often without carefully considering its interest for the Chinese reader. Literary magazines specializing in translations of foreign short stories became very popular, especially among the young. It is not surprising that such dramatic change brought objections from some leaders in government and literary and art circles, who feared it was happening too fast. The first reaction came in 1980 with calls to combat "bourgeois liberalism," a campaign that was repeated in 1981. These two difficult periods were followed by the campaign against spiritual pollution in late 1983, but by 1986 writers were again enjoying greater creative freedom (see Policy Toward Intellectuals, this ch.). Traditional Arts Drama Traditional drama, often called "Chinese opera," grew out of the zaju (variety plays) of the Yuan dynasty (1279-1368) and continues to exist in 368 different forms, the best known of which is Beijing Opera, which assumed its present form in the mid-nineteenth century and was extremely popular in the Qing dynasty (1644-1911) court. In Beijing Opera, traditional Chinese string and percussion instruments provide a strong rhythmic accompaniment to the acting. The acting is based on allusion: gestures, footwork, and other body movements express such actions as riding a horse, rowing a boat, or opening a door. Spoken dialogue is divided into recitative and Beijing colloquial speech, the former employed by serious characters and the latter by young females and clowns. Character roles are strictly defined. The traditional repertoire of Beijing Opera includes more than 1,000 works, mostly taken from historical novels about political and military struggles. In the early years of the People's Republic, the development of Beijing Opera was encouraged; many new operas on historical and modern themes were written, and earlier operas continued to be performed. As a popular art form, opera has usually been the first of the arts to reflect changes in Chinese policy. In the mid-1950s, for example, it was the first to benefit under the Hundred Flowers Campaign. Similarly, the attack in November 1965 on Beijing deputy mayor Wu Han and his historical play, "Hai Rui's Dismissal from Office," signaled the beginning of the Cultural Revolution. During the Cultural Revolution, most opera troupes were disbanded, performers and scriptwriters were persecuted, and all operas except the eight "model operas" approved by Jiang Qing and her associates were banned. After the fall of the Gang of Four in 1976, Beijing Opera enjoyed a revival and continued to be a very popular form of entertainment both in theaters and on television. In traditional Chinese theater, no plays were performed in the vernacular or without singing. But at the turn of the twentieth century, Chinese students returning from abroad began to experiment with Western plays. Following the May Fourth Movement of 1919, a number of Western plays were staged in China, and Chinese playwrights began to imitate this form. The most notable of the new-style playwrights was Cao Yu (b. 1910). His major works--"Thunderstorm," "Sunrise," "Wilderness," and "Peking Man"--written between 1934 and 1940, have been widely read in China. In the 1930s, theatrical productions performed by traveling Red Army cultural troupes in Communist-controlled areas were consciously used to promote party goals and political philosophy. By the 1940s theater was well-established in the Communist-controlled areas. In the early years of the People's Republic, Western-style theater was presented mainly in the form of "socialist realism." During the Cultural Revolution, however, Western-style plays were condemned as "dead drama" and "poisonous weeds" and were not performed. Following the Cultural Revolution, Western-style theater experienced a revival. Many new works appeared, and revised and banned plays from China and abroad were reinstated in the national repertoire. Many of the new plays strained at the limits of creative freedom and were alternately commended and condemned, depending on the political atmosphere. One of the most outspoken of the new breed of playwrights was Sha Yexin. His controversial play "The Imposter," which dealt harshly with the favoritism and perquisites accorded party members, was first produced in 1979. In early 1980 the play was roundly criticized by Secretary General Hu Yaobang--the first public intervention in the arts since the Cultural Revolution. In the campaign against bourgeois liberalism in 1981 and the antispiritual pollution campaign in 1983, Sha and his works were again criticized. Through it all Sha continued to write for the stage and to defend himself and his works in the press. In late 1985 Sha Yexin was accepted into the Chinese Communist Party and appointed head of the Shanghai People's Art Theater, where he continued to produce controversial plays. Music Chinese music appears to date back to the dawn of Chinese civilization, and documents and artifacts provide evidence of a well-developed musical culture as early as the Zhou dynasty (1027-221 B.C.). The Imperial Music Bureau, first established in the Qin dynasty (221-207 B.C.), was greatly expanded under the Han emperor Wu Di (140-87 B.C.) and charged with supervising court music and military music and determining what folk music would be officially recognized. In subsequent dynasties, the development of Chinese music was strongly influenced by foreign music, especially that of Central Asia. Chinese vocal music has traditionally been sung in a thin, nonresonant voice or in falsetto and is usually solo rather than choral. All traditional Chinese music is melodic rather than harmonic. Instrumental music is played on solo instruments or in small ensembles of plucked and bowed stringed instruments, flutes, and various cymbals, gongs, and drums. The scale has five notes. The New Culture Movement of the 1910s and 1920s evoked a great deal of lasting interest in Western music as a number of Chinese musicians who had studied abroad returned to perform Western classical music and to compose works of their own based on the Western musical notation system. Symphony orchestras were formed in most major cities and performed to a wide audience in the concert halls and on radio. Popular music--greatly influenced by Western music, especially that of the United States--also gained a wide audience in the 1940s. After the 1942 Yan'an Forum on Literature and Art, a large-scale campaign was launched in the Communist-controlled areas to adapt folk music to create revolutionary songs to educate the largely illiterate rural population on party goals. After the establishment of the People's Republic, revolutionary songs continued to be performed, and much of the remainder of popular music consisted of popular songs from the Soviet Union with the lyrics translated into Chinese. Symphony orchestras flourished throughout the country, performing Western classical music and compositions by Chinese composers. Conservatories and other institutions of musical instruction were developed and expanded in the major cities. A number of orchestras from Eastern Europe performed in China, and Chinese musicians and musical groups participated in a wide variety of international festivals. During the height of the Cultural Revolution, musical composition and performance were greatly restricted. After the Cultural Revolution, musical institutions were reinstated and musical composition and performance revived. In 1980 the Chinese Musicians' Association was formally elected to the International Musicological Society. Chinese musical groups toured foreign countries, and foreign musical organizations performed in China. In the mid-1980s popular ballads and Western folk and classical music still drew the greatest audiences, but other kinds of music, including previously banned Western jazz and rock and roll, were being performed and were receiving increasing acceptance, especially among young people. Painting and Calligraphy In imperial times, painting and calligraphy were the most highly appreciated arts in court circles and were produced almost exclusively by amateurs--aristocrats and scholar-officials--who alone had the leisure to perfect the technique and sensibility necessary for great brushwork. Calligraphy was thought to be the highest and purest form of painting. The implements were the brush pen, made of animal hair, and black inks made from pine soot and animal glue. In ancient times, writing, as well as painting, was done on silk. But after the invention of paper in the first century A.D., silk was gradually replaced by the new and cheaper material. Original writings by famous calligraphers have been greatly valued throughout China's history and are mounted on scrolls and hung on walls in the same way that paintings are. Painting in the traditional style involves essentially the same techniques as calligraphy and is done with a brush dipped in black or colored ink; oils are not used. As with calligraphy, the most popular materials on which paintings are made are paper and silk. The finished work is then mounted on scrolls, which can be hung or rolled up. Traditional painting also is done in albums and on walls, lacquerwork, and other media. Beginning in the Tang dynasty (A.D. 618-907), the primary subject matter of painting was the landscape, known as shan-shui (mountain-water) painting. In these landscapes, usually monochromatic and sparse, the purpose was not to reproduce exactly the appearance of nature but rather to grasp an emotion or atmosphere so as to catch the "rhythm" of nature. In Song dynasty (960-1279) times, landscapes of more subtle expression appeared; immeasurable distances were conveyed through the use of blurred outlines, mountain contours disappearing into the mist, and impressionistic treatment of natural phenomena. Emphasis was placed on the spiritual qualities of the painting and on the ability of the artist to reveal the inner harmony of man and nature, as perceived according to Taoist and Buddhist concepts (see The Hundred Schools of Thought, ch. 1). Beginning in the thirteenth century, there developed a tradition of painting simple subjects--a branch with fruit, a few flowers, or one or two horses. Narrative painting, with a wider color range and a much busier composition than the Song painting, was immensely popular at the time of the Ming dynasty (1368-1644). During the Ming period, the first books illustrated with colored woodcuts appeared. As the techniques of color printing were perfected, illustrated manuals on the art of painting began to be published. Jieziyuan Huazhuan (Manual of the Mustard Seed Garden), a five-volume work first published in 1679, has been in use as a technical textbook for artists and students ever since. Beginning with the New Culture Movement, Chinese artists started to adopt Western techniques. It also was during this time that oil painting was introduced to China. In the early years of the People's Republic, artists were encouraged to employ socialist realism. Some Soviet socialist realism was imported without modification, and painters were assigned subjects and expected to mass-produce paintings. This regimen was considerably relaxed in 1953, and after the Hundred Flowers Campaign of 1956-57, traditional Chinese painting experienced a significant revival. Along with these developments in professional art circles, there was a proliferation of peasant art depicting everyday life in the rural areas on wall murals and in open-air painting exhibitions. During the Cultural Revolution, art schools were closed, and publication of art journals and major art exhibitions ceased. Nevertheless, amateur art continued to flourish throughout this period. Following the Cultural Revolution, art schools and professional organizations were reinstated. Exchanges were set up with groups of foreign artists, and Chinese artists began to experiment with new subjects and techniques. Contemporary Performing Arts Motion Pictures Motion pictures were introduced to China in 1896, but the film industry was not started until 1917. During the 1920s film technicians from the United States trained Chinese technicians in Shanghai, an early filmmaking center, and American influence continued to be felt there for the next two decades. In the 1930s and 1940s, several socially and politically important films were produced. The film industry continued to develop after 1949. In the 17 years between the founding of the People's Republic and the Cultural Revolution, 603 feature films and 8,342 reels of documentaries and newsreels were produced. The first wide-screen film was produced in 1960. Animated films using a variety of folk arts, such as papercuts, shadow plays, puppetry, and traditional paintings, also were very popular for entertaining and educating children. During the Cultural Revolution, the film industry was severely restricted. Most previous films were banned, and only a few new ones were produced. In the years immediately following the Cultural Revolution, the film industry again flourished as a medium of popular entertainment. Domestically produced films played to large audiences, and tickets for foreign film festivals sold quickly. In the 1980s the film industry fell on hard times, faced with the dual problems of competition from other forms of entertainment and concern on the part of the authorities that many of the popular thriller and martial arts films were socially unacceptable. In January 1986 the film industry was transferred from the Ministry of Culture to the newly formed Ministry of Radio, Cinema, and Television to bring it under "stricter control and management" and to "strengthen supervision over production." Radio and Television Radio and television expanded rapidly in the 1980s as important means of mass communication and popular entertainment (see Telecommunications, ch. 8; The Media, ch. 10). By 1985 radio reached 75 percent of the population through 167 radio stations, 215 million radios, and a vast wired loudspeaker system. Television, growing at an even more rapid rate, reached two-thirds of the population through more than 104 stations (up from 52 in 1984 and 44 in 1983); an estimated 85 percent of the urban population had access to television. As radio and television stations grew, the content of the programming changed drastically from the political lectures and statistical lists of the previous period. Typical radio listening included soap operas based on popular novels and a variety of Chinese and foreign music. Most television shows were entertainment, including feature films, sports, drama, music, dance, and children's programming. In 1985 a survey of a typical week of television programming made by the Shanghai publication Wuxiandian Yu Dianshi (Journal of Radio and Television) revealed that more than half of the programming could be termed entertainment; education made up 24 percent of the remainder of the programming and news 15 percent. A wide cross section of international news was presented each evening. Most news broadcasts were borrowed from foreign news organizations, and a Chinese summary was dubbed over. China Central Television also contracted with several foreign broadcasters for entertainment programs. Between 1982 and 1985, six United States television companies signed agreements to provide American programs to China. Folk and Variety Arts Folk and variety arts have a long history in China. One of the oldest forms of folk art is puppetry. Puppeteers use various kinds of puppets, including marionettes, rod puppets, cloth puppets, and wire puppets in performances incorporating folk songs and dances and some dialogues. The subject matter is derived mainly from children's stories and fables. The shadow play is a form of puppetry that is performed by moving figures made of animal skins or cardboard held behind a screen lit by lamplight. The subject matter and singing style in shadow plays are closely related to local opera. Another popular folk art is the quyi, which consists of various kinds of storytelling and comic monologues and dialogues, often to the accompaniment of clappers, drums, or stringed instruments. Variety arts, including tightrope walking, acrobatics, animal acts, and sleight of hand date back at least as far as the Han dynasty (206 B.C.-A.D. 220) and were very popular in the imperial court. Later, many of these feats were incorporated into the traditional theater, and they continued to be performed by itinerant troupes. As these troupes traveled around the countryside, they developed and enriched their repertoire. Since 1949 these art forms have gained new respectability. Troupes have been established in the provinces, autonomous regions, and special municipalities, and theaters specifically dedicated to the variety arts have been built in major cities. Some troupes have become world famous, playing to packed houses at home and on foreign tours. Publishing Background Publishing in China dates from the invention of woodblock printing around the eighth century A.D. and was greatly expanded with the invention of movable clay type in the eleventh century. From the tenth to the twelfth century, Kaifeng, Meishan, Hangzhou, and Jianyang were major printing centers. In the nineteenth century, China acquired movable lead type and photogravure printing plates and entered the age of modern book and magazine printing. The largest of the early publishing houses were the Commercial Press (Shangwu Yinshuguan), established in 1897, and the China Publishing House (Zhonghua Shuju), established in 1912, both of which were still operating in 1987. Following the May Fourth Movement of 1919, publishers, especially those associated with various groups of intellectuals, proliferated. During the Chinese civil war, New China Booksellers (Xinhua Shudian) published a large amount of Marxist literature and educational materials in the communist-controlled areas. On the eve of the establishment of the People's Republic in 1949, there were over 700 New China Booksellers offices. Between 1949 and 1952, the New China Booksellers offices scattered throughout the country were nationalized and given responsibility publishing, printing, and distribution. Also, several small private publishers were brought under joint state-private ownership, and by 1956 all private publishers had been nationalized. After a brief flourishing during the Hundred Flowers Campaign of 1956-57, the publishing industry came under strong political pressure in the Anti-Rightist Campaign of 1957 (see The Transition to Socialism, 1953-57, ch. 1). The industry had not fully recovered from this campaign when it was plunged into the Cultural Revolution, a period in which publishing was severely curtailed and limited mainly to political tracts supporting various campaigns. Following the Cultural Revolution, publishing again flourished in unprecedented ways. In 1982 the China National Publishing Administration, the umbrella organization of Chinese publishers, was placed under the Ministry of Culture, but actual management of the industry was directed through four systems of administration: direct state administration; administration by committees or organizations of the State Council or the party Central Committee; armed forces administration; and administration by provinces, autonomous regions, or special municipalities. In 1984 statistics showed that 17 of the country's 418 publishing establishments were in Shanghai, whereas Beijing was home to 160 publishers. In 1985 plans were announced to foster the growth of the publishing industry in Chongqing, Xi'an, Wuhan, and Shenyang to take some of the workload from Beijing and Shanghai. Different publishers were assigned to specific kinds of publications. For example, the People's Publishing House was responsible for publishing works on politics, philosophy, and the social sciences; the People's Literature Publishing House produced ancient and modern Chinese and foreign literature and literary history and theory; the China Publishing House had the principal responsibility for collating and publishing Chinese classical literary, historical, and philosophical works; and the Commercial Press was the principal publisher of Chinese-to-foreign-language reference works and translations of foreign works in the social sciences. Other publishers dealt with works in specialized fields of science. In addition to the routine method of distributing books to bookstores in major cities, other methods of distribution were devised to meet the special needs of readers in urban and rural areas throughout the country. Mobile bookshops made regular visits to factories, mines, rural villages, and People's Liberation Army units, and service was provided in those locations through which individuals could request books. Arrangements were made with the libraries of educational institutions and enterprises to supply them with the books that they required, and books specifically applicable to certain industries were systematically recommended and provided to the departments concerned. Also, book fairs and exhibits frequently were provided at meetings and in public parks on holidays and other special occasions. Newspapers In 1987 China had two news agencies, the Xinhua (New China) News Agency and the China News Service (Zhongguo Xinwenshe) (see The Media, ch. 10). Xinhua was the major source of news and photographs for central and local newspapers. The party's newspapers Renmin Ribao (People's Daily) and Guangming Ribao (Enlightenment Daily), and the People's Liberation Army's Jiefangjun Bao (Liberation Army Daily) continued to have the largest circulation. In addition to these major party and army organs, most professional and scientific organizations published newspapers or journals containing specialized information in fields as varied as astronomy and entomology. Local morning and evening newspapers concentrating on news and feature stories about local people and events were extremely popular, selling out each day shortly after they arrived at the newsstands. In June 1981 the English-language China Daily began publication. This newspaper, which was provided for foreigners living or traveling in China but which also was read by a large number of Chinese literate in English, offered international news and sports from the major foreign wire services as well as interesting domestic news and feature articles. Cankao Xiaoxi (Reference News), an official news organ that carried foreign news items in Chinese translation, was available to cadres and their families. In 1980 it enjoyed a circulation of 11 million, but, with the subsequent proliferation of other news sources, its circulation dropped to 4 million in 1985, causing the subscription policy to be changed to make it available to all Chinese. Another source of foreign reporting was Cankao Ziliao (Reference Information), a more restricted Chinese reprint of foreign reportage available only to middle- and upper-level cadres. Both of these publications often included foreign reports critical of China. Libraries and Archives Very early in Chinese civilization, scholars had extensive private libraries, and all of the imperial dynasties constructed libraries and archives to house literary treasures and official records. The first modern libraries, however, did not appear in China until the late nineteenth century; even then, library service grew slowly and sporadically. In 1949 there were only fifty-five public libraries at the county level and above, most concentrated in major coastal commercial centers. Following the founding of the People's Republic, government and education leaders strove to develop library services and make them available throughout the country. The National Book Coordination Act of 1957 authorized the establishment of two national library centers, one in Beijing and the other in Shanghai, and nine regional library networks. Even so, libraries still were scarce, and those facilities that were available were cramped and offered only rudimentary services. Seeing the lack of libraries as a major impediment to modernization efforts, government leaders in the early 1980s took special interest in the development of library services. The special concentration of funds and talent began to produce significant results. By 1986 China had over 200,000 libraries, including a national library and various public, educational, scientific, and military libraries. More than forty Chinese institutions of higher learning also had established library-science or information-science departments. There were more than 2,300 public libraries at the county level and above, containing nearly 256 million volumes, and below the county level some 53,000 cultural centers included a small library or reading room. The country's main library, the National Library of China, housed a rich collection of books, periodicals, newspapers, maps, prints, photographs, manuscripts, microforms, tape recordings, and inscriptions on bronze, stone, bones, and tortoiseshells. In 1987 a new National Library building, one of the world's largest library structures, was completed in the western suburbs. The Shanghai Municipal Library, one of the largest public libraries in the country, contained over 7 million volumes, nearly 1 million of which were in foreign languages. The Beijing University Library took over the collections of the Yanjing University Library in 1950 and by the mid-1980s--with more than 3 million volumes, one-fourth of them in foreign languages--was one of the best university libraries in the country. On the basis of the General Rules for Archives published in 1983, historical archives were being expanded at the provincial and county levels. Two of the most important archives were the Number One Historical Archives of China, located in Beijing containing the archives of the Ming and Qing dynasties, and the Number Two Historical Archives of China, located in Nanjing containing the archives of the Guomindang period. A number of foreign scholars have been granted access to these archives. In 1987 public and research libraries still faced serious space, management, and service problems. Even with the special efforts being made to solve these problems, it was clear that they would not be quickly resolved. In the late 1980s, China was experiencing an active educational and cultural life. Students were staying in school longer, educational standards were being raised, and facilities were being improved. Intellectuals were encouraged to develop their expertise, especially in the scientific and technical spheres, and a wide variety of traditional and foreign literary and art forms were allowed to flourish. This situation was likely to continue as long as it served the interest of economic modernization and posed no threat to the political establishment. * * * Several general works provide a good overview of China's education and culture. However, because the most important educational reforms did not evolve or become effective until 1985-86, and were still changing in 1987, these books generally did not address many of the latest educational reforms. Some of the most valuable books available include China Issues and Prospects in Education, Annex 1, 1985 by the World Bank, which provides an overview of the system, detailed statistics, and projections; John Cleverly's The Schooling of China, which has excellent chapters on the anatomy of the educational system and its problems, and prospects; and Ruth Hayhoe's Contemporary Chinese Education, which has valuable chapters on primary, secondary, and teacher education. Other informative works are the chapter on "Education" by Stanley Rosen in a book he co-edited with John Burns, entitled Policy Conflicts in Post-Mao China, and a brief article by Eli Seifman in the March 1986 issue of Asian Thought and Society. Carol Lee Hamrin and Timothy Cheek's China's Establishment Intellectuals, Merle Goldman's China's Intellectuals, and Michael S. Duke's Blooming and Contending are indispensable sources of information on Chinese intellectual policy past and present. Liu Wu-chi's An Introduction to Chinese Literature gives an excellent summary of traditional literature and drama, and C.T. Hsia's A History of Modern Chinese Fiction gives insight into modern Chinese literature before the Cultural Revolution. Encyclopedia of China Today, edited by Fredric M. Kaplan, Julian M. Sobin, and Stephen Andors, contains valuable information about linguistic reform and gives a good overview of the arts in the post-Cultural Revolution period. The Zhongguo Chuban Nianjian (China Publishing Yearbook), put out by the Commercial Press since 1980, provides rare data on that industry. Chi Wang's "An Overview of Libraries in the People's Republic of China" in the September 1984 issue of China Exchange News is an excellent source on Chinese libraries in the 1980s. Other useful articles providing information on the changes and directions of China's education and cultural policy can be found in various issues of Beijing Review, China News Analysis, China Exchange News, China Reconstructs, and the Foreign Broadcast Information Service Daily Report: China, and the Joint Publications Research Service China Report: Political, Sociological, and Military Affairs. People's Republic of China Year-book also provides useful information and statistics. (For -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90037 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 39 DB Rec# - 632 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH5.00 Title :CHAPTER 5.00 - ECONOMIC CONTEXT Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : IN THE LATE 1980s the Chinese economy was a system in transition, moving cautiously away from central planning and gradually adopting some of the institutions and mechanisms of a market economy. The process of economic reform began in earnest in 1979, after Chinese leaders concluded that the Soviet-style system that had been in place since the 1950s was making little progress in improving the standard of living of the Chinese people and also was failing to close the economic gap between China and the industrialized nations. The first major success of the economic reform program was the introduction of the responsibility system of production in agriculture, a policy that allowed farm families to work a piece of land under contract and to keep whatever profits they earned. By 1984 the responsibility system had dramatically increased food production, and the government had eliminated the people's communes--the hallmark of Chinese socialism for over twenty years. In most other sectors of the economy the role of government was reduced, managers were given more decision-making power, enterprises were encouraged to produce for profit, the role of the private sector increased, and experimentation with new forms of ownership began in the state sector. Constraints on foreign trade were relaxed, and joint ventures with foreign firms were officially encouraged as sources of modern technology and scarce foreign exchange. With rising incomes, greater incentives, and rapid growth in the service and light industrial sectors, the People's Republic of China began to exhibit some of the traits of a consumer society. Movement toward a market system, however, was complex and difficult, and in 1987 the transition was far from complete. Relaxing restrictions on economic activity quickly alleviated some of China's most pressing economic difficulties, but it also gave rise to a new set of problems. Inflation--the greatest fear of Chinese consumers--became a problem for the first time since the early 1950s, and along with new opportunities to seek profit came growing inequality in income distribution and new temptations for crime, corruption, and Western cultural styles, regarded by many older Chinese people as decadent and "spiritually polluting." The state still owned and controlled the largest nonagricultural enterprises, and the major industries were still primarily guided by the central plan. Thus, the Chinese economy in the late 1980s was very much a mixed system. It could not be accurately described as either a centrally planned economy or a market economy. The leadership was committed to further expansion of the reform program as a requisite for satisfactory economic growth, but at the same time it was compelled to keep a tight grip on key aspects of the economy--particularly inflation and grain production--to prevent the emergence of overwhelming political discontent. Under these circumstances, forces in the economic system worked against each other, producing what the Chinese leadership called internal "contradictions." On the one hand, the economy was no longer tightly controlled by the state plan because of the large and growing market sector. On the other hand, the market could not operate efficiently because many commodities were still under government control and most prices were still set or restricted by government agencies. Under the leadership of Deng Xiaoping, the entire nation was "riding the tiger"--making great progress but not entirely in control--and therefore unable to stop the process without risk. Despite the burst of progress in the 1980s, the Chinese economy still shared many basic characteristics with the economies of other developing countries. The gross national product per capita in 1986 was -Y849 (for value of the yuan--see Glossary), or about US$228 (at the 1986 exchange rate), reflecting the low average level of labor productivity. As in many countries that did not begin sustained industrialization efforts until the middle of the twentieth century, the majority of the Chinese labor force--over 60 percent--was still employed in agriculture, which produced around 30 percent of the value of national output. Agricultural work still was performed primarily by hand. Modern equipment was in general use in industry but was largely typified by outdated designs and low levels of efficiency. In other respects China's economy was quite different from those of most developing nations. The most important difference was that the Chinese economy--although in the midst of far-reaching changes--was organized as a socialist system, directed by a central planning structure. The predominance of state and collective ownership, firm central control over the financial system, redistribution of resources among regions, rationing of grain, and subsidized provision of housing resulted in a pattern of income distribution that was much narrower than those in almost all other developing countries. There was relatively little true capitalism in the form of private ownership of productive assets. Agricultural land was farmed under lease by farm households but was formally owned by villages, towns, and townships--the collective units that had replaced the rural commune system. In the mid-1980s most Chinese were still very poor by American standards, but several important measures indicated that the quality of their lives was considerably better than implied by the level of gross national product (GNP) per capita. According to World Bank data, in 1984 energy consumption per person was 485 kilograms of oil equivalent, higher than that for any other country ranked as a low-income country and greater than the average for lower middle-income countries. In 1983 the daily calorie supply per capita was 2,620--11 percent above the basic requirement and nearly as high as the average for countries classified as upper middle-income countries. Significantly, infant mortality in 1985 was 39 per 1,000, well below the average for upper middle-income countries, and life expectancy at birth was 69 years, higher than the average for upper middle-income countries. Despite the major economic gains made by China since 1949 and the dramatic advances of the 1980s, serious imbalances and deficiencies have persisted. Contributing to these deficiencies were the political turmoil that disrupted the economy during the Cultural Revolution decade (1966-76), insufficient flexibility in the planning process, and serious inaccuracies in price structures. Power shortages, inadequate transportation and communication networks, shortages of technicians and other highly trained personnel, insufficient foreign exchange for procurement of advanced technology from other countries, and inadequate legal and administrative provisions for both foreign and domestic trade further hindered modernization. An important by-product of the reform program since the late 1970s has been an enormous increase in the amount of information available on the economy. The government collected and published basic national economic data in the 1950s, but the centralized statistics-keeping system broke down at the end of the 1950s, and very little statistical information was available during the 1960s and early 1970s. It was not until 1979 that the State Statistical Bureau ended the statistical "blackout" with the publication of an economic statistical communiqu. In subsequent years the State Statistical Bureau published larger and more frequent compendia, including annual almanacs of the economy and annual statistical yearbooks, which became progressively more sophisticated and informative. In addition, most provincial-level units and cities, as well as the major industries and economic sectors, such as coal mining and agriculture, began to produce their own specialized statistical yearbooks. In the early 1980s, numerous new periodicals, many of which specialized in economic data and analysis, started publication. Although Chinese statistical definitions and practices still differed from those in the West in many respects and the accuracy of some figures was called into doubt even by Chinese economists, foreign analysts in 1987 had access to a rich and growing body of data that would support extensive analysis of the Chinese economy. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90038 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 40 DB Rec# - 633 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH5.01 Title :CHAPTER 5.01: GENERAL NATURE OF THE ECONOMY Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : GENERAL NATURE OF THE ECONOMY Throughout most of the nineteenth and twentieth centuries, as during much of earlier Chinese history, the economy was barely able to meet the basic needs of the country's huge population--the largest in the world (see Population, ch. 2). In normal years the economy produced just about the amount of food required to meet the minimum nutritional requirements of the populace. In times of drought, flood, warfare, or civil disorder, there was not enough food, and before 1949 such conditions often led to starvation on a vast scale. Under the government of the People's Republic, food shortages were countered by redistributing supplies within China and by importing grain from abroad, which successfully averted famine except in the catastrophic years of 1959, 1960, and 1961. Despite formidable constraints and disruptions, the Chinese economy was never stagnant. Production grew substantially between 1800 and 1949 and increased fairly rapidly after 1949. Before the 1980s, however, production gains were largely matched by population growth, so that productive capacity was unable to outdistance essential consumption needs significantly, particularly in agriculture. Grain output in 1979 was about twice as large as in 1952, but so was the population. As a result, little surplus was produced even in good years. Further, few resources could be spared for investment in capital goods, such as machinery, factories, mines, railroads, and other productive assets. The relatively small size of the capital stock caused productivity per worker to remain low, which in turn perpetuated the economy's inability to generate a substantial surplus (see fig. 7). China's socialist system, with state ownership of most industry and central control over planning and the financial system, has enabled the government to mobilize whatever surplus was available and greatly increase the proportion of the national economic output devoted to investment. Western analysts estimated that investment accounted for about 25 percent of GNP in the 30 years after 1949, a rate surpassed by few other countries. Because of the comparatively low level of GNP, however, even this high rate of investment secured only a small amount of resources relative to the size of the country and the population. In 1978, for instance, only 16 percent of the GNP of the United States went into gross investment, but this amounted to US$345.6 billion, whereas the approximately 25 percent of China's GNP that was invested came to about the equivalent of US$111 billion and had to serve a population 4.5 times the size of that in the United States. The limited resources available for investment prevented China from rapidly producing or importing advanced equipment. Technological development proceeded gradually, and outdated equipment continued to be used as long as possible. Consequently, many different levels of technology were in use simultaneously (see Historical Development of Science and Technology Policy, ch. 9). Most industries included some plants that were comparable to modern Western facilities, often based on imported equipment and designs. Equipment produced by Chinese factories was generally some years behind standard Western designs. Agriculture received a smaller share of state investment than industry and remained at a much lower average level of technology and productivity. Despite a significant increase in the availability of tractors, trucks, electric pumps, and mechanical threshers, most agricultural activities were still performed by people or animals (see Agricultural Policies, ch. 6). Although the central administration coordinated the economy and redistributed resources among regions when necessary, in practice most economic activity was very decentralized, and there was relatively little flow of goods and services between areas (see Internal Trade and Distribution, ch. 8). About 75 percent of the grain grown in China, for instance, was consumed by the families that produced it. One of the most important sources of growth in the economy was the improved ability to exploit the comparative advantages of each locality by expanding transportation capacity. The communications and transportation sectors were growing and improving but still could not carry the volume of traffic required by a modern economy because of the scarcity of investment funds and advanced technology (see Transportation; Telecommunications, ch. 8). Because of limited interaction among regions, the great variety of geographic zones in China, and the broad spectrum of technologies in use, areas differed widely in economic activities, organizational forms, and prosperity (see Physical Environment, ch. 2). Within any given city, enterprises ranged from tiny, collectively owned handicraft units, barely earning subsistence-level incomes for their members, to modern state-owned factories, whose workers received steady wages plus free medical care, bonuses, and an assortment of other benefits. The agricultural sector was diverse, accommodating well-equipped, "specialized households" that supplied scarce products and services to local markets; wealthy suburban villages specializing in the production of vegetables, pork, poultry, and eggs to sell in free markets in the nearby cities; fishing villages on the seacoast; herding groups on the grasslands of Nei Monggol Autonomous Region (Inner Mongolia); and poor, struggling grain-producing villages in the arid mountains of Shaanxi and Gansu provinces. The economy had progressed in major ways since 1949, but after four decades experts in China and abroad agreed that it had a great distance yet to go. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90039 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 41 DB Rec# - 634 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH5.02 Title :CHAPTER 5.02: ECONOMIC POLICIES, 1949-80 Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : ECONOMIC POLICIES, 1949-80 When the Chinese Communist Party came to power in 1949, its leaders' fundamental long-range goals were to transform China into a modern, powerful, socialist nation. In economic terms these objectives meant industrialization, improvement of living standards, narrowing of income differences, and production of modern military equipment. As the years passed, the leadership continued to subscribe to these goals. But the economic policies formulated to achieve them were dramatically altered on several occasions in response to major changes in the economy, internal politics, and international political and economic developments. An important distinction emerged between leaders who felt that the socialist goals of income equalization and heightened political consciousness should take priority over material progress and those who believed that industrialization and general economic modernization were prerequisites for the attainment of a successful socialist order. Among the prominent leaders who considered politics the prime consideration were Mao Zedong, Lin Biao, and the members of the Gang of Four (see Glossary). Leaders who more often stressed practical economic considerations included Liu Shaoqi, Zhou Enlai, and Deng Xiaoping. For the most part, important policy shifts reflected the alternating emphasis on political and economic goals and were accompanied by major changes in the positions of individuals in the political power structure. An important characteristic in the development of economic policies and the underlying economic model was that each new policy period, while differing significantly from its predecessor, nonetheless retained most of the existing economic organization. Thus the form of the economic model and the policies that expressed it at any given point in Chinese history reflected both the current policy emphasis and a structural foundation built up during the earlier periods. Recovery from War, 1949-52 In 1949 China's economy was suffering from the debilitating effects of decades of warfare. Many mines and factories had been damaged or destroyed. At the end of the war with Japan in 1945, Soviet troops had dismantled about half the machinery in the major industrial areas of the northeast and shipped it to the Soviet Union. Transportation, communication, and power systems had been destroyed or had deteriorated because of lack of maintenance. Agriculture was disrupted, and food production was some 30 percent below its pre-war peak level. Further, economic ills were compounded by one of the most virulent inflations in world history. The chief goal of the government for the 1949-52 period was simply to restore the economy to normal working order. The administration moved quickly to repair transportation and communication links and revive the flow of economic activity. The banking system was nationalized and centralized under the People's Bank of China. To bring inflation under control by 1951, the government unified the monetary system, tightened credit, restricted government budgets at all levels and put them under central control, and guaranteed the value of the currency. Commerce was stimulated and partially regulated by the establishment of state trading companies (commercial departments), which competed with private traders in purchasing goods from producers and selling them to consumers or enterprises. Transformation of ownership in industry proceeded slowly. About a third of the country's enterprises had been under state control while the Guomindang government was in power (1927-49), as was much of the modernized transportation sector. The Chinese Communist Party immediately made these units state-owned enterprises upon taking power in 1949. The remaining privately owned enterprises were gradually brought under government control, but 17 percent of industrial units were still completely outside the state system in 1952. In agriculture a major change in landownership was carried out. Under a nationwide land reform program, titles to about 45 percent of the arable land were redistributed from landlords and more prosperous farmers to the 60 to 70 percent of farm families that previously owned little or no land. Once land reform was completed in an area, farmers were encouraged to cooperate in some phases of production through the formation of small "mutual aid teams" of six or seven households each. Thirty-nine percent of all farm households belonged to mutual aid teams in 1952. By 1952 price stability had been established, commerce had been restored, and industry and agriculture had regained their previous peak levels of production. The period of recovery had achieved its goals (see Rural Society, ch. 3; Agricultural Policies, ch. 6). The First Five-Year Plan, 1953-57 Having restored a viable economic base, the leadership under Mao Zedong, Zhou Enlai, and other revolutionary veterans was prepared to embark on an intensive program of industrial growth and socialization. For this purpose the administration adopted the Soviet economic model, based on state ownership in the modern sector, large collective units in agriculture, and centralized economic planning. The Soviet approach to economic development was manifested in the First Five-Year Plan (1953-57) (see The Transition to Socialism, ch. 1; Organization, ch. 7). As in the Soviet economy, the main objective was a high rate of economic growth, with primary emphasis on industrial development at the expense of agriculture and particular concentration on heavy industry and capital-intensive technology. Soviet planners helped their Chinese counterparts formulate the plan. Large numbers of Soviet engineers, technicians, and scientists assisted in developing and installing new heavy industrial facilities, including many entire plants and pieces of equipment purchased from the Soviet Union. Government control over industry was increased during this period by applying financial pressures and inducements to convince owners of private, modern firms to sell them to the state or convert them into joint public-private enterprises under state control. By 1956 approximately 67.5 percent of all modern industrial enterprises were state owned, and 32.5 percent were under joint public-private ownership. No privately owned firms remained. During the same period, the handicraft industries were organized into cooperatives, which accounted for 91.7 percent of all handicraft workers by 1956. Agriculture also underwent extensive organizational changes. To facilitate the mobilization of agricultural resources, improve the efficiency of farming, and increase government access to agricultural products, the authorities encouraged farmers to organize increasingly large and socialized collective units. From the loosely structured, tiny mutual aid teams, villages were to advance first to lower-stage, agricultural producers' cooperatives, in which families still received some income on the basis of the amount of land they contributed, and eventually to advanced cooperatives, or collectives. In the advanced producers' cooperatives, income shares were based only on the amount of labor contributed. In addition, each family was allowed to retain a small private plot on which to grow vegetables, fruit, and livestock for its own use. The collectivization process began slowly but accelerated in 1955 and 1956. In 1957 about 93.5 percent of all farm households had joined advanced producers' cooperatives. In terms of economic growth the First Five-Year Plan was quite successful, especially in those areas emphasized by the Soviet-style development strategy. A solid foundation was created in heavy industry. Key industries, including iron and steel manufacturing, coal mining, cement production, electricity generation, and machine building were greatly expanded and were put on a firm, modern technological footing. Thousands of industrial and mining enterprises were constructed, including 156 major facilities. Industrial production increased at an average annual rate of 19 percent between 1952 and 1957, and national income grew at a rate of 9 percent a year. Despite the lack of state investment in agriculture, agricultural output increased substantially, averaging increases of about 4 percent a year. This growth resulted primarily from gains in efficiency brought about by the reorganization and cooperation achieved through collectivization. As the First Five-Year Plan wore on, however, Chinese leaders became increasingly concerned over the relatively sluggish performance of agriculture and the inability of state trading companies to increase significantly the amount of grain procured from rural units for urban consumption. The Great Leap Forward, 1958-60 Before the end of the First Five-Year Plan, the growing imbalance between industrial and agricultural growth, dissatisfaction with inefficiency, and lack of flexibility in the decision-making process convinced the nation's leaders--particularly Mao Zedong--that the highly centralized, industry-biased Soviet model was not appropriate for China. In 1957 the government adopted measures to shift a great deal of the authority for economic decision making to the provincial-level, county, and local administrations. In 1958 the Second Five-Year Plan (1958-62), which was intended to continue the policies of the first plan, was abandoned. In its place the leadership adopted an approach that relied on spontaneous heroic efforts by the entire population to produce a dramatic "great leap" in production for all sectors of the economy at once (see The Great Leap Forward, 1958-60, ch. 1; Rural Society, ch. 3; The 1950s, ch. 6). Further reorganization of agriculture was regarded as the key to the endeavor to leap suddenly to a higher stage of productivity. A fundamental problem was the lack of sufficient capital to invest heavily in both industry and agriculture at the same time. To overcome this problem, the leadership decided to attempt to create capital in the agricultural sector by building vast irrigation and water control works employing huge teams of farmers whose labor was not being fully utilized. Surplus rural labor also was to be employed to support the industrial sector by setting up thousands of small-scale, low-technology, "backyard" industrial projects in farm units, which would produce machinery required for agricultural development and components for urban industries. Mobilization of surplus rural labor and further improvements in agricultural efficiency were to be accomplished by a "leap" to the final stage of agricultural collectivization--the formation of people's communes. People's communes were created by combining some 20 or 30 advanced producers' cooperatives of 20,000 to 30,000 members on average, although membership varied from as few as 6,000 to over 40,000 in some cases. When first instituted, the communes were envisaged as combining in one body the functions of the lowest level of local government and the highest level of organization in agricultural production. Communes consisted of three organizational levels: the central commune administration; the production brigade (roughly equivalent to the advanced producers' cooperatives, or a traditional rural village), and the production team, which generally consisted of around thirty families. At the inception of the Great Leap Forward, the communes were intended to acquire all ownership rights over the productive assets of their subordinate units and to take over most of the planning and decision making for farm activities. Ideally, communes were to improve efficiency by moving farm families into dormitories, feeding them in communal mess halls, and moving whole teams of laborers from task to task. In practice, this ideal, extremely centralized form of commune was not instituted in most areas. Ninety-eight percent of the farm population was organized into communes between April and September of 1958. Very soon it became evident that in most cases the communes were too unwieldy to carry out successfully all the managerial and administrative functions that were assigned to them. In 1959 and 1960, most production decisions reverted to the brigade and team levels, and eventually most governmental responsibilities were returned to county and township administrations. Nonetheless, the commune system was retained and continued to be the basic form of organization in the agricultural sector until the early 1980s. During the Great Leap Forward, the industrial sector also was expected to discover and use slack labor and productive capacity to increase output beyond the levels previously considered feasible. Political zeal was to be the motive force, and to "put politics in command" enterprising party branches took over the direction of many factories. In addition, central planning was relegated to a minor role in favor of spontaneous, politically inspired production decisions from individual units. The result of the Great Leap Forward was a severe economic crisis. In 1958 industrial output did in fact "leap" by 55 percent, and the agricultural sector gathered in a good harvest. In 1959, 1960, and 1961, however, adverse weather conditions, improperly constructed water control projects, and other misallocations of resources that had occurred during the overly centralized communization movement resulted in disastrous declines in agricultural output. In 1959 and 1960, the gross value of agricultural output fell by 14 percent and 13 percent, respectively, and in 1961 it dropped a further 2 percent to reach the lowest point since 1952. Widespread famine occurred, especially in rural areas, according to 1982 census figures, and the death rate climbed from 1.2 percent in 1958 to 1.5 percent in 1959, 2.5 percent in 1960, and then dropped back to 1.4 percent in 1961. From 1958 to 1961, over 14 million people apparently died of starvation, and the number of reported births was about 23 million fewer than under normal conditions. The government prevented an even worse disaster by canceling nearly all orders for foreign technical imports and using the country's foreign exchange reserves to import over 5 million tons of grain a year beginning in 1960. Mines and factories continued to expand output through 1960, partly by overworking personnel and machines but largely because many new plants constructed during the First Five-Year Plan went into full production in these years. Thereafter, however, the excessive strain on equipment and workers, the effects of the agricultural crisis, the lack of economic coordination, and, in the 1960s, the withdrawal of Soviet assistance caused industrial output to plummet by 38 percent in 1961 and by a further 16 percent in 1962. Readjustment and Recovery: "Agriculture First," 1961-65 Faced with economic collapse in the early 1960s, the government sharply revised the immediate goals of the economy and devised a new set of economic policies to replace those of the Great Leap Forward. Top priority was given to restoring agricultural output and expanding it at a rate that would meet the needs of the growing population. Planning and economic coordination were to be revived--although in a less centralized form than before the Great Leap Forward--so as to restore order and efficient allocation of resources to the economy. The rate of investment was to be reduced and investment priorities reversed, with agriculture receiving first consideration, light industry second, and heavy industry third. In a further departure from the emphasis on heavy industrial development that persisted during the Great Leap Forward, the government undertook to mobilize the nation's resources to bring about technological advancement in agriculture. Organizational changes in agriculture mainly involved decentralization of production decision making and income distribution within the commune structure. The role of the central commune administration was greatly reduced, although it remained the link between local government and agricultural producers and was important in carrying out activities that were too large in scale for the production brigades. Production teams were designated the basic accounting units and were responsible for making nearly all decisions concerning production and the distribution of income to their members. Private plots, which had disappeared on some communes during the Great Leap Forward, were officially restored to farm families (see Importance of Agriculture Recognized; Planning and Organization, ch. 6). Economic support for agriculture took several forms. Agricultural taxes were reduced, and the prices paid for agricultural products were raised relative to the prices of industrial supplies for agriculture. There were substantial increases in supplies of chemical fertilizer and various kinds of agricultural machinery, notably small electric pumps for irrigation. Most of the modern supplies were concentrated in areas that were known to produce "high and stable yields" in order to ensure the best possible results. In industry, a few key enterprises were returned to central state control, but control over most enterprises remained in the hands of provincial-level and local governments. This decentralization had taken place in 1957 and 1958 and was reaffirmed and strengthened in the 1961-65 period. Planning rather than politics once again guided production decisions, and material rewards rather than revolutionary enthusiasm became the leading incentive for production. Major imports of advanced foreign machinery, which had come to an abrupt halt with the withdrawal of Soviet assistance starting in 1960, were initiated with Japan and West European countries. During the 1961-65 readjustment and recovery period, economic stability was restored, and by 1966 production in both agriculture and industry surpassed the peak levels of the Great Leap Forward period. Between 1961 and 1966, agricultural output grew at an average rate of 9.6 percent a year. Industrial output was increased in the same years at an average annual rate of 10.6 percent, largely by reviving plants that had operated below capacity after the economic collapse in 1961. Another important source of growth in this period was the spread of rural, small-scale industries, particularly coal mines, hydroelectric plants, chemical fertilizer plants, and agricultural machinery plants. The economic model that emerged in this period combined elements of the highly centralized, industrially oriented, Soviet-style system of the First Five-Year Plan with aspects of the decentralization of ownership and decision making that characterized the Great Leap Forward and with the strong emphasis on agricultural development and balanced growth of the "agriculture first" policy. Important changes in economic policy occurred in later years, but the basic system of ownership, decision-making structure, and development strategy that was forged in the early 1960s was not significantly altered until the reform period of the 1980s. Events During the Cultural Revolution Decade, 1966-76 The Cultural Revolution was set in motion by Mao Zedong in 1966 and called to a halt in 1968, but the atmosphere of radical leftism persisted until Mao's death and the fall of the Gang of Four in 1976 (see The Cultural Revolution Decade, 1966-76, ch. 1). During this period, there were several distinct phases of economic policy. High Tide of the Cultural Revolution, 1966-68 The Cultural Revolution, unlike the Great Leap Forward, was primarily a political upheaval and did not produce major changes in official economic policies or the basic economic model. Nonetheless, its influence was felt throughout urban society, and it profoundly affected the modern sector of the economy. Agricultural production stagnated, but in general the rural areas experienced less turmoil than the cities. Production was reduced in the modern nonagricultural sectors in several ways. The most direct cause of production halts was the political activity of students and workers in the mines and factories. A second cause was the extensive disruption of transportation resulting from the requisitioning of trains and trucks to carry Red Guards (see Glossary) around the country. Output at many factories suffered from shortages of raw materials and other supplies. A third disruptive influence was that the direction of factories was placed in the hands of revolutionary committees, consisting of representatives from the party, the workers, and the People's Liberation Army, whose members often had little knowledge of either management or the enterprise they were supposed to run. In addition, virtually all engineers, managers, scientists, technicians, and other professional personnel were "criticized," demoted, "sent down" to the countryside to "participate in labor," or even jailed, all of which resulted in their skills and knowledge being lost to the enterprise. The effect was a 14-percent decline in industrial production in 1967. A degree of order was restored by the army in late 1967 and 1968, and the industrial sector returned to a fairly high rate of growth in 1969. Other aspects of the Cultural Revolution had more far-reaching effects on the economy. Imports of foreign equipment, required for technological advancement, were curtailed by rampant xenophobia. Probably the most serious and long-lasting effect on the economy was the dire shortage of highly educated personnel caused by the closing of the universities. China's ability to develop new technology and absorb imported technology would be limited for years by the hiatus in higher education (see Higher Education, ch. 4). Resumption of Systematic Growth, 1970-74 As political stability was gradually restored, a renewed drive for coordinated, balanced development was set in motion under the leadership of Premier Zhou Enlai. To revive efficiency in industry, Chinese Communist Party committees were returned to positions of leadership over the revolutionary committees, and a campaign was carried out to return skilled and highly educated personnel to the jobs from which they had been displaced during the Cultural Revolution. Universities began to reopen, and foreign contacts were expanded. Once again the economy suffered from imbalances in the capacities of different industrial sectors and an urgent need for increased supplies of modern inputs for agriculture. In response to these problems, there was a significant increase in investment, including the signing of contracts with foreign firms for the construction of major facilities for chemical fertilizer production, steel finishing, and oil extraction and refining. The most notable of these contracts was for thirteen of the world's largest and most modern chemical fertilizer plants (see Chemicals, ch. 7). During this period, industrial output grew at an average rate of 8 percent a year. Agricultural production declined somewhat in 1972 because of poor weather but increased at an average annual rate of 3.8 percent for the period as a whole. The party and state leadership undertook a general reevaluation of development needs, and Zhou Enlai presented the conclusions in a report to the Fourth National People's Congress in January 1975. In it he called for the Four Modernizations (see Glossary). Zhou emphasized the mechanization of agriculture and a comprehensive two-stage program for the modernization of the entire economy by the end of the century. The Gang of Four, 1974-76 During the early and mid-1970s, the radical group later known as the Gang of Four attempted to dominate the power center through their network of supporters and, most important, through their control of the media. More moderate leaders, however, were developing and promulgating a pragmatic program for rapid modernization of the economy that contradicted the set of policies expressed in the media. Initiatives by Zhou Enlai and Deng Xiaoping were vehemently attacked in the press and in political campaigns as "poisonous weeds." Using official news organs, the Gang of Four advocated the primacy of nonmaterial, political incentives, radical reduction of income differences, elimination of private farm plots, and a shift of the basic accounting unit up to the brigade level in agriculture. They opposed the strengthening of central planning and denounced the use of foreign technology. In the face of such contradictory policy pronouncements and uncertain political currents, administrators and economic decision makers at all levels were virtually paralyzed. Economic activity slowed, and the incipient modernization program almost ground to a halt. Uncertainty and instability were exacerbated by the death of Zhou Enlai in January 1976 and the subsequent second purge of Deng Xiaoping in April. The effects of the power struggle and policy disputes were compounded by the destruction resulting from the Tangshan earthquake in July 1976. Output for the year in both industry and agriculture showed no growth over 1975. The interlude of uncertainty finally ended when the Gang of Four was arrested in October--one month after Mao's death. The Post-Mao Interlude, 1976-78 After the fall of the Gang of Four, the leadership under Hua Guofeng--and by July 1977 the rehabilitated Deng Xiaoping--reaffirmed the modernization program espoused by Zhou Enlai in 1975. They also set forth a battery of new policies for the purpose of accomplishing the Four Modernizations. The new policies strengthened the authority of managers and economic decision makers at the expense of party officials, stressed material incentives for workers, and called for expansion of the research and education systems (see The Post-Mao Period, 1976-78, ch. 1). Foreign trade was to be increased, and exchanges of students and "foreign experts" with developed countries were to be encouraged. This new policy initiative was capped at the Fifth National People's Congress in February and March 1978, when Hua Guofeng presented the draft of an ambitious ten-year plan for the 1976-85 period. The plan called for high rates of growth in both industry and agriculture and included 120 construction projects that would require massive and expensive imports of foreign technology. Between 1976 and 1978, the economy quickly recovered from the stagnation of the Cultural Revolution. Agricultural production was sluggish in 1977 because of a third consecutive year of adverse weather conditions but rebounded with a record harvest in 1978. Industrial output jumped 14 percent in 1977 and increased by 13 percent in 1978. Reform of the Economic System, Beginning in 1979 At the milestone Third Plenum of the National Party Congress's Eleventh Central Committee in December 1978, the party leaders decided to undertake a program of gradual but fundamental reform of the economic system. They concluded that the Maoist version of the centrally planned economy had failed to produce efficient economic growth and had caused China to fall far behind not only the industrialized nations of the West but also the new industrial powers of Asia: Japan, the Republic of Korea, Singapore, Taiwan, and Hong Kong. In the late 1970s, while Japan and Hong Kong rivaled European countries in modern technology, China's citizens had to make do with barely sufficient food supplies, rationed clothing, inadequate housing, and a service sector that was inadequate and inefficient. All of these shortcomings embarrassed China internationally. The purpose of the reform program was not to abandon communism but to make it work better by substantially increasing the role of market mechanisms in the system and by reducing--not eliminating--government planning and direct control. The process of reform was incremental. New measures were first introduced experimentally in a few localities and then were popularized and disseminated nationally if they proved successful. By 1987 the program had achieved remarkable results in increasing supplies of food and other consumer goods and had created a new climate of dynamism and opportunity in the economy. At the same time, however, the reforms also had created new problems and tensions, leading to intense questioning and political struggles over the program's future. The Period of Readjustment, 1979-81 The first few years of the reform program were designated the "period of readjustment," during which key imbalances in the economy were to be corrected and a foundation was to be laid for a well-planned modernization drive. The schedule of Hua Guofeng's ten-year plan was discarded, although many of its elements were retained. The major goals of the readjustment process were to expand exports rapidly; overcome key deficiencies in transportation, communications, coal, iron, steel, building materials, and electric power; and redress the imbalance between light and heavy industry by increasing the growth rate of light industry and reducing investment in heavy industry. Agricultural production was stimulated in 1979 by an increase of over 22 percent in the procurement prices paid for farm products. The central policies of the reform program were introduced experimentally during the readjustment period. The most successful reform policy, the contract responsibility system of production in agriculture, was suggested by the government in 1979 as a way for poor rural units in mountainous or arid areas to increase their incomes. The responsibility system allowed individual farm families to work a piece of land for profit in return for delivering a set amount of produce to the collective at a given price. This arrangement created strong incentives for farmers to reduce production costs and increase productivity. Soon after its introduction the responsibility system was adopted by numerous farm units in all sorts of areas. Agricultural production was also stimulated by official encouragement to establish free farmers' markets in urban areas, as well as in the countryside, and by allowing some families to operate as "specialized households," devoting their efforts to producing a scarce commodity or service on a profit-making basis (see Post-Mao Policies, ch. 6). In industry, the main policy innovations increased the autonomy of enterprise managers, reduced emphasis on planned quotas, allowed enterprises to produce goods outside the plan for sale on the market, and permitted enterprises to experiment with the use of bonuses to reward higher productivity. The government also tested a fundamental change in financial procedures with a limited number of state-owned units: rather than remitting all of their profits to the state, as was normally done, these enterprises were allowed to pay a tax on their profits and retain the balance for reinvestment and distribution to workers as bonuses. The government also actively encouraged the establishment of collectively owned and operated industrial and service enterprises as a means of soaking up some of the unemployment among young people and at the same time helping to increase supplies of light industrial products. Individual enterprise--true capitalism--also was allowed, after having virtually disappeared during the Cultural Revolution, and independent cobblers, tailors, tinkers, and vendors once again became common sights in the cities. Foreign-trade procedures were greatly eased, allowing individual enterprises and administrative departments outside the Ministry of Foreign Trade (which became the Ministry of Foreign Economic Relations and Trade in 1984) to engage in direct negotiations with foreign firms. A wide range of cooperation, trading, and credit arrangements with foreign firms were legalized so that China could enter the mainstream of international trade (see Foreign Trade, ch. 8). Reform and Opening, Beginning in 1982 The period of readjustment produced promising results, increasing incomes substantially; raising the availability of food, housing, and other consumer goods; and generating strong rates of growth in all sectors except heavy industry, which was intentionally restrained. On the strength of these initial successes, the reform program was broadened, and the leadership under Deng Xiaoping frequently remarked that China's basic policy was "reform and opening," that is, reform of the economic system and opening to foreign trade. In agriculture the contract responsibility system was adopted as the organizational norm for the entire country, and the commune structure was largely dismantled. By the end of 1984, approximately 98 percent of all farm households were under the responsibility system, and all but a handful of communes had been dissolved. The communes' administrative responsibilities were turned over to township and town governments, and their economic roles were assigned to townships and villages. The role of free markets for farm produce was further expanded and, with increased marketing possibilities and rising productivity, farm incomes rose rapidly (see Post-Mao Policies, ch. 6). In industry the complexity and interrelation of production activities prevented a single, simple policy from bringing about the kind of dramatic improvement that the responsibility system achieved in agriculture. Nonetheless, a cluster of policies based on greater flexibility, autonomy, and market involvement significantly improved the opportunities available to most enterprises, generated high rates of growth, and increased efficiency. Enterprise managers gradually gained greater control over their units, including the right to hire and fire, although the process required endless struggles with bureaucrats and party cadres. The practice of remitting taxes on profits and retaining the balance became universal by 1985, increasing the incentive for enterprises to maximize profits and substantially adding to their autonomy. A change of potentially equal importance was a shift in the source of investment funds from government budget allocations, which carried no interest and did not have to be repaid, to interest-bearing bank loans. As of 1987 the interest rate charged on such loans was still too low to serve as a check on unproductive investments, but the mechanism was in place. The role of foreign trade under the economic reforms increased far beyond its importance in any previous period. Before the reform period, the combined value of imports and exports had seldom exceeded 10 percent of national income. In 1980 it was 15 percent, in 1984 it was 21 percent, and in 1986 it reached 35 percent. Unlike earlier periods, when China was committed to trying to achieve self-sufficiency, under Deng Xiaoping foreign trade was regarded as an important source of investment funds and modern technology. As a result, restrictions on trade were loosened further in the mid-1980s, and foreign investment was legalized. The most common foreign investments were joint ventures between foreign firms and Chinese units. Sole ownership by foreign investors also became legal, but the feasibility of such undertakings remained questionable. The most conspicuous symbols of the new status of foreign trade were the four coastal special economic zones (see Glossary), which were created in 1979 as enclaves where foreign investment could receive special treatment. Three of the four zones--the cities of Shenzhen, Zhuhai, and Shantou--were located in Guangdong Province, close to Hong Kong. The fourth, Xiamen, in Fujian Province, was directly across the strait from Taiwan. More significant for China's economic development was the designation in April 1984 of economic development zones in the fourteen largest coastal cities--including Dalian, Tianjin, Shanghai, and Guangzhou--all of which were major commercial and industrial centers. These zones were to create productive exchanges between foreign firms with advanced technology and major Chinese economic networks. Domestic commerce also was stimulated by the reform policies, which explicitly endeavored to enliven the economy by shifting the primary burden of the allocation of goods and services from the government plan to the market. Private entrepreneurship and free-market activities were legalized and encouraged in the 1980s, although the central authorities continuously had to fight the efforts of local government agencies to impose excessive taxes on independent merchants. By 1987 the state-owned system of commercial agencies and retail outlets coexisted with a rapidly growing private and collectively owned system that competed with it vigorously, providing a wider range of consumption choices for Chinese citizens than at any previous time. Although the reform program achieved impressive successes, it also gave rise to several serious problems. One problem was the challenge to party authority presented by the principles of free-market activity and professional managerial autonomy. Another difficulty was a wave of crime, corruption, and--in the minds of many older people--moral deterioration caused by the looser economic and political climate. The most fundamental tensions were those created by the widening income disparities between the people who were "getting rich" and those who were not and by the pervasive threat of inflation. These concerns played a role in the political struggle that culminated in party general secretary Hu Yaobang's forced resignation in 1987 (see Resistance and the Campaign Against Bourgeois Liberalization, ch. 11). Following Hu's resignation, the leadership engaged in an intense debate over the future course of the reforms and how to balance the need for efficiency and market incentives with the need for government guidance and control. The commitment to further reform was affirmed, but its pace, and the emphasis to be placed on macroeconomic and microeconomic levers, remained objects of caution. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90040 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 42 DB Rec# - 635 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH5.03 Title :CHAPTER 5.03: STRUCTURE AND OPERATION OF THE ECONOMY Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : STRUCTURE AND OPERATION OF THE ECONOMY Roles of the Government and the Party Under China's socialist political and economic system, the government was explicitly responsible for planning and managing the national economy. The State Constitution of 1982 specifies that the state is to guide the country's economic development and that the State Council is to direct its subordinate bodies in drawing up and carrying out the national economic plan and the state budget (see Constitutional Framework, ch. 10). A major portion of the governmental apparatus was devoted to managing the economy; all but a few of the more than 100 ministries, commissions, administrations, bureaus, academies, and corporations under the State Council were concerned with economic matters (see The State Council, ch. 10). Each significant economic sector was supervised and controlled by one or more of these organizations, which included the People's Bank of China, State Planning Commission, State Economic Commission, State Machine-Building Industry Commission, and the ministries of agriculture, animal husbandry, and fishery; coal industry; commerce; communications; finance; light industry; metallurgical industry; petroleum industry; railways; textile industry; and water resources and electric power. Several aspects of the economy were administered by specialized departments under the State Council, including the State Statistical Bureau, General Administration of Civil Aviation of China, and China Travel and Tourism Bureau. Each of the economic organizations under the State Council directed the units under its jurisdiction through subordinate offices at the provincial and local levels. Economic policies and decisions adopted by the National People's Congress and the State Council were passed on to the economic organizations under the State Council, which incorporated them into the plans for the various sectors of the economy. Economic plans and policies were implemented by a variety of direct and indirect control mechanisms. Direct control was exercised by designating specific physical output quotas and supply allocations for some goods and services. Indirect instruments--also called "economic levers"--operated by affecting market incentives. These included levying taxes, setting prices for products and supplies, allocating investment funds, monitoring and controlling financial transactions by the banking system, and controlling the allocation of scarce key resources, such as skilled labor, electric power, transportation, steel, and chemical fertilizer. A major objective of the reform program was to reduce the use of direct controls and to increase the role of indirect economic levers. Major state-owned enterprises still received detailed plans specifying physical quantities of key inputs and products from their ministries. Even these units, however, were increasingly affected by prices and allocations that were determined through market interaction and only indirectly influenced by the central plan. By 1987 the majority of state-owned industrial enterprises, which were managed at the provincial level or below, were partially regulated by a combination of specific allocations and indirect controls, but they also produced goods outside the plan for sale in the market. Important, scarce resources--for example, engineers or finished steel--might be assigned to this kind of unit in exact numbers. Less critical assignments of personnel and materials would be authorized in a general way by the plan, but with procurement arrangements left up to the enterprise management. Enterprises had increasing discretion over the quantities of inputs purchased, the sources of inputs, the variety of products manufactured, and the production process. Collectively owned units and the agricultural sector were regulated primarily by indirect instruments. Each collective unit was "responsible for its own profit and loss," and the prices of its inputs and products provided the major production incentives. Consumer spending was subject to a limited degree of direct government influence but was primarily determined by the basic market forces of income levels and commodity prices. Before the reform period, key goods were rationed when they were in short supply, but by the mid-1980s availability had increased to the point that rationing was discontinued for everything except grain, which could also be purchased in the free markets. Foreign trade was supervised by the Ministry of Foreign Economic Relations and Trade, General Administration of Customs, and Bank of China, the foreign exchange arm of the Chinese banking system, which controlled access to the scarce foreign currency required for imports. Because of the reduced restrictions on foreign trade, however, there were broad opportunities for individual work units to engage in exchanges with foreign firms without much interference from official agencies (see Organization of Foreign Trade, ch. 8). The role of the government in the economy was buttressed by the pervasive influence of the Chinese Communist Party. The structure of the party organization paralleled that of the government but also extended below the lowest level of government into individual work units. Important economic decision makers at all levels, from the members of the State Council down to the managers of factories, either were party members themselves or worked closely with colleagues who were party members. The party served as a powerful supplementary network for transmitting and implementing the economic goals and policies of the government. Although the government dominated the economy, the extent of its control was limited by the sheer volume of economic activity. Furthermore, the concept of government supervision of the economy had changed--at least in the minds of the advocates of reform--from one of direct but stifling state control to one of indirect guidance of a more dynamic economy (see The First Wave of Reform, 1979-84, ch. 11). The Two Major Sectors: Agriculture and Industry The two most important sectors of the economy were agriculture and industry, which together employed 80 percent of the labor force and in 1985 produced 72 percent of GNP. The two sectors differed in nearly all respects. Technology, labor productivity, and incomes advanced much more rapidly in industry than in agriculture. Agricultural output was vulnerable to the effects of weather, while industry was more directly influenced by political upheavals. The organization of industry was based on state and collective ownership, planning, and wage labor, while that of agriculture was built around household farming, self-reliance, and market incentives. The disparities between the two sectors combined to form an economic-cultural-social gap between the rural and urban areas--the major division in Chinese society. Agriculture In the late 1980s, China remained a predominantly agricultural country. As of 1985 about 63 percent of the population lived in rural areas, and nearly 63 percent of the national labor force was engaged in agriculture (see Migration; Labor Force, ch. 2). Modern technology had spread slowly in the vast farm areas, and the availability of modern supplies was less than adequate, causing growth in agricultural output to lag behind production increases in the rest of the economy. The proportion of GNP produced by agriculture declined from over 43 percent in the early 1950s to about 29 percent in 1985. The low agricultural growth rate as compared with other sectors of the economy reflected the fact that the average farmer had far less machinery and electric power and fewer other modern production aids to work with than the average worker in industry. Under the responsibility system (see Glossary), farm households and collective organizations purchased large amounts of new machinery, particularly small tractors and trucks. The horsepower of agricultural machinery per farmer increased by almost 30 percent between 1979 and 1985 but still came to less than 1 horsepower per person. Before the early 1980s, most of the agricultural sector was organized according to the three-tier commune system (see Rural Society, ch. 3; Agricultural Policies, ch. 6). There were over 50,000 people's communes, most containing around 30,000 members. Each commune was made up of about sixteen production brigades, and each production brigade was composed of around seven production teams. The production teams were the basic agricultural collective units. They corresponded to small villages and typically included about 30 households and 100 to 250 members. The communes, brigades, and teams owned all major rural productive assets and provided nearly all administrative, social, and commercial services in the countryside. The largest part of farm family incomes consisted of shares of net team income, distributed to members according to the amount of work each had contributed to the collective effort. Farm families also worked small private plots and were free to sell or consume their products. By the end of 1984, approximately 98 percent of the old production teams had adopted the contract responsibility system, and all but 249 communes had been dissolved, their governmental functions passed on to 91,000 township and town governments. Production team organizations were replaced by 940,000 village committees. Under the responsibility system, farm families no longer devoted most of their efforts to collective production but instead generally signed contracts with the village or town to cultivate a given crop on a particular piece of land. After harvest a certain amount of the crop had to be sold to the unit at a predetermined price, and any output beyond that amount was the property of the family, either to be sold in the market or to be consumed. Beyond the amount contracted for delivery to the collective, farmers were allowed to determine for themselves what and how to produce. Market activity played a central role in the rural economy of the 1980s. Farmers sold a growing share of their produce in rural or urban free markets and purchased many of the inputs that had formerly been supplied by the team or brigade. A prominent new institution that thrived in the market environment was the "specialized household." Specialized households operated in the classic pattern of the entrepreneur, buying or renting equipment to produce a good or service that was in short supply locally. Some of the most common specialties were trucking, chicken raising, pig raising, and technical agricultural services, such as irrigation and pest control. Many of the specialized households became quite wealthy relative to the average farmer. The new economic climate and the relaxation of restrictions on the movements of rural residents gave rise to numerous opportunities for profit-making ventures in the countryside. Towns, villages, and groups of households referred to as "rural economic unions" established small factories, processing operations, construction teams, catering services, and other kinds of nonagricultural concerns. Many of these organizations had links with urban enterprises that found the services of these rural units to be less expensive and more efficient than those of their formal urban counterparts. The growth of these nonagricultural enterprises in the countryside created a large number of new jobs, making it possible for many workers who were no longer needed in agriculture to "leave the land but stay in the country," significantly changing the structure of the rural economy and increasing rural incomes. In 1986 nonagricultural enterprises in the countryside employed 21 percent of the rural labor force and for the first time produced over half the value of rural output. Although the chief characteristic of the new rural system was household farming for profit, collective organizations still played a major role. Agricultural land still was owned by township or town governments, which determined the crops farmers contracted to grow and the financial terms of the contracts. Many township, town, and village governments also engaged in major entrepreneurial undertakings, establishing factories, processing mills, brick works, and other large-scale enterprises. Finally, the maintenance and operation of public works, such as irrigation systems, power plants, schools, and clinics, generally still was regarded as the responsibility of the collective administrations. Four percent of the nation's farmland was cultivated by state farms, which employed 4.9 million people in 1985. State farms were owned and operated by the government much in the same way as an industrial enterprise. Management was the responsibility of a director, and workers were paid set wages, although some elements of the responsibility system were introduced in the mid-1980s. State farms were scattered throughout China, but the largest numbers were located in frontier or remote areas, including Xinjiang-Uygur Autonomous Region in the northwest, Nei Monggol Autonomous Region, the three northeastern provinces of Heilongjiang, Jilin, and Liaoning and the southeastern provinces of Guangdong, Fujian, and Jiangxi. Industry The industrial sector employed only about 17 percent of the labor force in 1985 but, as a result of much higher labor productivity than the agricultural sector, accounted for over 46 percent of national income. Industrial units were very diverse in size and technological sophistication, ranging from tiny handicraft manufacturing enterprises to giant modern complexes producing such goods as steel, chemical fertilizer, and synthetic fibers. The majority of the country's large industrial units were clustered in the major industrial centers in the northeast, the Beijing-Tianjin-Tangshan area, the Chang Jiang (Yangtze River) Valley, and Shanghai. Small and medium-size units were found throughout the country, and a number of first-rank plants were located far from the leading cities (see Geographical Distribution of Industry, ch. 7). Ownership of industrial enterprises fell into three general categories: state ownership, urban collective ownership, and rural collective ownership. Industry was dominated by the state-owned sector, which included the largest, most technically advanced, and most important enterprises. In 1985 state-owned enterprises produced 70 percent of national industrial output by value, held 75 percent of fixed industrial assets, and employed 46 percent of the industrial labor force (including rural industrial enterprises). Although all of these units were owned by "the state" in the abstract sense, operational control and effective ownership of specific enterprises were divided among the different levels of government. A few of the largest enterprises were under the direct authority of their respective ministries in the central government. Most major enterprises were owned by the province, autonomous region, or special municipality where they were located or were subject to shared control by the central ministry and the provincial-level government. Small and medium-size units usually were owned by city, prefecture, county, or town governments. Control of some enterprises was shared with higher administrative levels. Workers in state-owned enterprises were paid regular wages according to an established pay scale, as well as bonuses that were supposed to be related to personal or enterprise performance or both. In addition, they received a number of important benefits, including free health care, subsidized housing, and subsidies for such work-related expenses as special clothing and commuting costs. The average income of industrial workers was considerably higher than that of most farmers and was much more stable. Urban, collectively owned enterprises (owned by the workers) for the most part were small units equipped with relatively little machinery. Many of these units were engaged in handicraft production or other labor-intensive activities, such as manufacturing furniture or assembling simple electrical items. In the late 1970s and early 1980s, the government promoted them as a means of using surplus labor to increase supplies of consumer and export goods. By 1985 urban collective industrial enterprises employed over 17 million people, 20 percent of the total industrial labor force. These enterprises held only 13 percent of all industrial fixed assets but produced 19 percent of total industrial output value. Rural, collectively owned industrial enterprises--commonly referred to as "township enterprises"--were the most rapidly growing portion of the industrial sector in the mid-1980s. The government regarded them as a means of expanding industrialization (without further taxing the overcrowded major urban centers), alleviating rural unemployment, and increasing supplies of industrial products in rural areas. Most of the township enterprises were operated by township and town governments, but a large number of very small units were operated by private cooperative organizations called "rural economic unions." In 1985 township enterprises employed 30 million workers, over a third of the total industrial labor force. The value of their fixed assets, however, was only 12 percent of the national total, and their output value came to less than 10 percent of the national total. Nonetheless, in 1985 their income grew by 44 percent over the 1984 levels. The most common products of township industries were building materials, agricultural machinery, textiles, and processed foods. Other Important Sectors Transportation, the postal system, and telecommunications employed over 12 million people in 1985. Long-distance transportation was carried primarily by railroads, inland waterways, and highways. The government-run railroad network was the backbone of the freight system, and rail lines extended to nearly all parts of China. In most areas, however, the rail system had too few feeder lines and was inadequately integrated. Much of the rail system had been improved in the 1980s; many heavily used stretches were converted to double track or upgraded, and several key new lines were constructed to relieve congested areas. Most locomotives in use in the early 1980s were picturesque but outdated steam engines. By 1987, however, several railroad districts had converted entirely to more modern and efficient diesel or electric locomotives, and domestic production of modern engines was supplemented by imported models. Within their limitations the railroads functioned fairly efficiently and made intensive use of the rail network. In 1986 the railroads carried 874.5 billion ton-kilometers of freight, 45 percent of the national freight total and a 7.8 percent increase over 1985. They also carried nearly 1.1 billion passengers, 20 percent of the national total. Despite reasonably good performance, the ability of the economy to move goods between cities and regions was severely limited by deficiencies in the system, and improvement of the railroads continued to be a high priority for state investment (see Railroads, ch. 8). Inland navigation grew more quickly than the rail system and in 1986 carried 827.8 billion ton-kilometers of freight, nearly as much as the railroads. The principal inland waterway was the Chang Jiang and its tributaries, which constituted the major artery linking the industrial and agricultural areas of central China and the southwest to the great port and industrial center of Shanghai. Improvements to the water routes enabled larger and faster modern vessels to use them, extended their navigable length, and reduced the amount of time they were closed each year. In addition to modern vessels, the lakes, rivers, and canals were plied by thousands of motorized and nonmotorized traditional craft of all sizes (see Inland Waterways, ch. 8). Local road networks were extensive, but many were narrow and unpaved, and all were overcrowded with trucks, jeeps, buses, carts pulled by tractors and animals, bicycles, pedestrians, and grain laid out to dry by local farmers. Owing to rapid increases in the volume of private and work-unit trucking, highway freight traffic was the fastest growing major portion of the transportation system aside from ocean shipping. In 1986 highway freight traffic totaled 259.6 billion ton-kilometers, an increase of 47 percent over 1985, and 80 percent of the volume was carried by vehicles that were not managed by state highway departments. In 1986 buses served 4.3 billion passengers for relatively short trips (see Highways and Roads, ch. 8). Civil aviation provided important links both to isolated areas of the country and to foreign nations. It carried, however, only a small fraction of total freight and passenger traffic (see Civil Aviation, ch. 8). The service sector expanded quickly during the reform period, making up for major deficiencies that had developed in the preceding quarter century. In the 1950s and 1960s, services were regarded as nonproductive and were therefore neglected. During the Cultural Revolution, they were relentlessly attacked as "remnants of capitalism." By the late 1970s, the service trades, such as food service, barbering, laundering, tailoring, and repair work, were seriously understaffed and were far from able to meet the needs of the population. Furthermore, they were all concentrated in large, inefficient state-owned units. The service occupations requiring advanced training, such as health care, education, and legal services, were decimated by the breakdown of the education system during the Cultural Revolution decade. Revival of the service sector was a well-publicized goal of the reform program. Legalization of private and collective enterprise quickly led to the appearance of tinkers, cobblers, tailors, barbers, and small food-service stands, particularly in the free markets. Between 1978 and 1985, the number of people engaged in the service trades, retail sales, and catering grew from only 6.1 million to over 25 million, of whom 21 million were in collective or individual enterprises. In 1986 the government further stimulated the growth of the sector by leasing to private individuals or groups a large number of small, state-owned, service establishments, including restaurants, repair shops, and barber shops, that had consistently been operating at a loss under state management. Other service sectors that employed significant quantities of labor included health care, education and culture, and government administration. These sectors were important to the national economy and employed over 25 million people. China produced nearly all of its own medicines and medical equipment, but most hospitals were poorly equipped by Western standards. A more serious shortage was the relatively small number of doctors and other highly trained medical personnel. In 1985 some 4.3 million people worked in health-care institutions. Of these, 1.4 million were doctors--including 336,000 doctors of traditional (rather than Western) medicine, 637,000 were nurses, and 1.4 million were midwives, laboratory technicians, pharmacists, and other technical personnel. The number of doctors of Western medicine grew by over 35 percent between 1978 and 1985, and renewed contact with the West opened training opportunities in Europe, the United States, and Japan. Only a little over 10 percent of all Chinese received free medical care. Free care was provided to government workers, military personnel, teachers, college students, and workers in state-owned enterprises. A portion of the medical expenses incurred by their dependent family members was covered by the work units. Most rural towns and villages operated voluntary cooperative medical systems (see Health Care, ch. 2). Educational and cultural institutions employed 12.7 million people in 1985. This total included 871,000 teachers and staff in institutions of higher education, an increase of 68 percent over the number in 1978, reflecting the intensive reconstruction of the education system in the 1980s. There were nearly 8 million people working in government administration in 1985. Planning Until the 1980s the economy was directed and coordinated by means of economic plans that were formulated at all levels of administration. The reform program significantly reduced the role of central planning by encouraging off-plan production by state-owned units and by promoting the growth of collective and individual enterprises that did not fall under the planning system. The government also endeavored to replace direct plan control with indirect guidance of the economy through economic levers, such as taxes and investment support. Despite these changes, overall direction of the economy was still carried out by the central plan, as was allocation of key goods, such as steel and energy. When China's planning apparatus was first established in the early 1950s, it was patterned after the highly centralized Soviet system. That system basically depended on a central planning bureaucracy that calculated and balanced quantities of major goods demanded and supplied. This approach was substantially modified during the Great Leap Forward (1958-60; see Glossary), when economic management was extensively decentralized. During the 1960s and 1970s, the degree of centralization in the planning system fluctuated with the political currents, waxing in times of pragmatic growth and waning under the influence of the Cultural Revolution and the Gang of Four. At the national level, planning began in the highest bodies of the central government. National economic goals and priorities were determined by the party's Central Committee, the State Council, and the National People's Congress. These decisions were then communicated to the ministries, commissions, and other agencies under the State Council to be put into effect through national economic plans. The State Planning Commission worked with the State Economic Commission, State Statistical Bureau, the former State Capital Construction Commission, People's Bank of China, the economic ministries, and other organs subordinate to the State Council to formulate national plans of varying duration and import. Long-range plans as protracted as ten and twelve years also were announced at various times. These essentially were statements of future goals and the intended general direction of the economy, and they had little direct effect on economic activity. As of late 1987 the most recent such long-range plan was the draft plan for 1976-85, presented by Hua Guofeng in February 1978. The primary form of medium-range plan was the five-year plan, another feature adopted from the Soviet system. The purpose of the five-year plan was to guide and integrate the annual plans to achieve balanced growth and progress toward national goals. In practice, this role was only fulfilled by the First Five-Year Plan (1953-57), which served effectively as a blueprint for industrialization. The second (1958-62), third (1966-70), fourth (1971-75), and fifth (1976-80) five-year plans were all interrupted by political upheavals and had little influence. The Sixth Five-Year Plan (1981-85) was drawn up during the planning period and was more a reflection of the results of the reform program than a guide for reform. The Seventh Five-Year Plan (1986-90) was intended to direct the course of the reforms through the second half of the 1980s, but by mid-1987 its future was already clouded by political struggle. A second form of medium-range planning appeared in the readjustment and recovery periods of 1949-52, 1963-65, and 1979-81, each of which followed a period of chaos--the civil war, the Great Leap Forward, and the Gang of Four, respectively. In these instances, normal long- and medium-range planning was suspended while basic imbalances in the economy were targeted and corrected. In each case, objectives were more limited and clearly defined than in the five-year plans and were fairly successfully achieved. The activities of economic units were controlled by annual plans. Formulation of the plans began in the autumn preceding the year being planned, so that agricultural output for the current year could be taken into account. The foundation of an annual plan was a "material balance table." At the national level, the first step in the preparation of a material balance table was to estimate--for each province, autonomous region, special municipality, and enterprise under direct central control--the demand and supply for each centrally controlled good. Transfers of goods between provincial-level units were planned so as to bring quantities supplied and demanded into balance. As a last resort, a serious overall deficit in a good could be made up by imports. The initial targets were sent to the provincial-level administrations and the centrally controlled enterprises. The provincial-level counterparts of the state economic commissions and ministries broke the targets down for allocation among their subordinate counties, districts, cities, and enterprises under direct provincial-level control. Counties further distributed their assigned quantities among their subordinate towns, townships, and county-owned enterprises, and cities divided their targets into objectives for the enterprises under their jurisdiction. Finally, towns assigned goals to the state-owned enterprises they controlled. Agricultural targets were distributed by townships among their villages and ultimately were reduced to the quantities that villages contracted for with individual farm households. At each level, individual units received their target input allocations and output quantities. Managers, engineers, and accountants compared the targets with their own projections, and if they concluded that the planned output quotas exceeded their capabilities, they consulted with representatives of the administrative body superior to them. Each administrative level adjusted its targets on the basis of discussions with subordinate units and sent the revised figures back up the planning ladder. The commissions and ministries evaluated the revised sums, repeated the material balance table procedure, and used the results as the final plan, which the State Council then officially approved. Annual plans formulated at the provincial level provided the quantities for centrally controlled goods and established targets for goods that were not included in the national plan but were important to the province, autonomous region, or special municipality. These figures went through the same process of disaggregation, review, discussion, and reaggregation as the centrally planned targets and eventually became part of the provincial-level unit's annual plan. Many goods that were not included at the provincial level were similarly added to county and city plans. The final stage of the planning process occurred in the individual producing units. Having received their output quotas and the figures for their allocations of capital, labor, and other supplies, enterprises generally organized their production schedules into ten-day, one-month, three-month, and six-month plans. The Chinese planning system has encountered the same problems of inflexibility and inadequate responsiveness that have emerged in other centrally planned economies. The basic difficulty has been that it is impossible for planners to foresee all the needs of the economy and to specify adequately the characteristics of planned inputs and products. Beginning in 1979 and 1980, the first reforms were introduced on an experimental basis. Nearly all of these policies increased the autonomy and decision-making power of the various economic units and reduced the direct role of central planning. By the mid-1980s planning still was the government's main mechanism for guiding the economy and correcting imbalances, but its ability to predict and control the behavior of the economy had been greatly reduced. The Budget The nature of the state budget also was significantly altered by the reform program. Before 1979 the state budget was the financial component of the national economic plan. It was made up of the budgets of both the central government and the local governments and included the revenues and expenditures of all state-owned enterprises. All profits from state enterprises were remitted to the state budget, and investment funds were allocated from the state budget. Under the reform, there was increased separation of enterprises from direct state control. Enterprises now paid proportional taxes on their incomes rather than remitting their entire profits to the state. Investment funds were, in principle, no longer to be allocated directly to state enterprises from the state budget but were to be obtained from the banking system in the form of interest-bearing loans. In 1985 total state revenues of -Y186.6 billion included -Y51.4 billion in income taxes from state-owned enterprises and only -Y4.4 billion in enterprise incomes. The largest category of revenues was industrial and commercial taxes, which amounted to -Y110.1 billion. Agricultural taxes were -Y4.2 billion, continuing the previous policy of levying only negligible taxes on the farm sector. Revenues also included borrowing equal to -Y9 billion, a practice followed annually since 1978. As of 1983 roughly 30 percent of total revenues were collected by the central government and 70 percent by local governments, while each accounted for about 50 percent of expenditures. In 1985 the largest category of budget expenditure was appropriations for capital construction, which received 31.3 percent of the total allotment. Culture, education, science, and public health constituted the next largest category, with 17 percent of expenditures. National defense, which averaged 19 percent of budgetary expenditures in the 1960s and 1970s, received only 10.3 percent of the total in 1985. Administrative expenses were 7.7 percent of the budget and new technology in enterprises 5.5 percent. In 1984 the state paid out -Y37 billion in price subsidies, an amount equal to 24 percent of total expenditures in that year. The bulk of the subsidies---Y32 billion--was for consumer goods. An important function of the state budget was to transfer resources from prosperous regions to poor regions. The budgets that were finally approved by the Ministry of Finance for the provinces, autonomous regions, and special municipalities allowed surplus funds from affluent areas to be transferred to cover planned expenditures in the deficit areas, while bringing the budget for the entire country into balance. The resulting pattern of revenue sharing between provincial-level administrations and the central government was one in which the advanced industrialized regions paid a much higher rate of net taxation than most areas, and the least-developed regions were heavily subsidized. For example, in 1985 Shanghai remitted -Y8.4 billion in profits and taxes, equal to 4.5 percent of national budget revenues, although it had only 1.1 percent of the national population. The Banking System The history of the Chinese banking system has been somewhat checkered. Nationalization and consolidation of the country's banks received the highest priority in the earliest years of the People's Republic, and banking was the first sector to be completely socialized. In the period of recovery after the Chinese civil war (1949-52), the People's Bank of China moved very effectively to halt raging inflation and bring the nation's finances under central control. Over the course of time, the banking organization was modified repeatedly to suit changing conditions and new policies. The banking system was centralized early on under the Ministry of Finance, which exercised firm control over all financial services, credit, and the money supply. During the 1980s the banking system was expanded and diversified to meet the needs of the reform program, and the scale of banking activity rose sharply. New budgetary procedures required state enterprises to remit to the state only a tax on income and to seek investment funds in the form of bank loans. Between 1979 and 1985, the volume of deposits nearly tripled and the value of bank loans rose by 260 percent. By 1987 the banking system included the People's Bank of China, Agricultural Bank, Bank of China (which handled foreign exchange matters), China Investment Bank, China Industrial and Commercial Bank, People's Construction Bank, Communications Bank, People's Insurance Company of China, rural credit cooperatives, and urban credit cooperatives. The People's Bank of China was the central bank and the foundation of the banking system. Although the bank overlapped in function with the Ministry of Finance and lost many of its responsibilities during the Cultural Revolution, in the 1970s it was restored to its leading position. As the central bank, the People's Bank of China had sole responsibility for issuing currency and controlling the money supply. It also served as the government treasury, the main source of credit for economic units, the clearing center for financial transactions, the holder of enterprise deposits, the national savings bank, and a ubiquitous monitor of economic activities. Another financial institution, the Bank of China, handled all dealings in foreign exchange. It was responsible for allocating the country's foreign exchange reserves, arranging foreign loans, setting exchange rates for China's currency, issuing letters of credit, and generally carrying out all financial transactions with foreign firms and individuals. The Bank of China had offices in Beijing and other cities engaged in foreign trade and maintained overseas offices in major international financial centers, including Hong Kong, London, New York, Singapore, and Luxembourg. The Agricultural Bank was created in the 1950s to facilitate financial operations in the rural areas. The Agricultural Bank provided financial support to agricultural units. It issued loans, handled state appropriations for agriculture, directed the operations of the rural credit cooperatives, and carried out overall supervision of rural financial affairs. The Agricultural Bank was headquartered in Beijing and had a network of branches throughout the country. It flourished in the late 1950s and mid-1960s but languished thereafter until the late 1970s, when the functions and autonomy of the Agricultural Bank were increased substantially to help promote higher agricultural production. In the 1980s it was restructured again and given greater authority in order to support the growth and diversification of agriculture under the responsibility system. The People's Construction Bank managed state appropriations and loans for capital construction. It checked the activities of loan recipients to ensure that the funds were used for their designated construction purpose. Money was disbursed in stages as a project progressed. The reform policy shifted the main source of investment funding from the government budget to bank loans and increased the responsibility and activities of the People's Construction Bank. Rural credit cooperatives were small, collectively owned savings and lending organizations that were the main source of small-scale financial services at the local level in the countryside. They handled deposits and short-term loans for individual farm families, villages, and cooperative organizations. Subject to the direction of the Agricultural Bank, they followed uniform state banking policies but acted as independent units for accounting purposes. In 1985 rural credit cooperatives held total deposits of -Y72.5 billion. Urban credit cooperatives were a relatively new addition to the banking system in the mid-1980s, when they first began widespread operations. As commercial opportunities grew in the reform period, the thousands of individual and collective enterprises that sprang up in urban areas created a need for small-scale financial services that the formal banks were not prepared to meet. Bank officials therefore encouraged the expansion of urban credit cooperatives as a valuable addition to the banking system. In 1986 there were more than 1,100 urban credit cooperatives, which held a total of -Y3.7 billion in deposits and made loans worth -Y1.9 billion. In the mid-1980s the banking system still lacked some of the services and characteristics that were considered basic in most countries. Interbank relations were very limited, and interbank borrowing and lending was virtually unknown. Checking accounts were used by very few individuals, and bank credit cards did not exist. In 1986 initial steps were taken in some of these areas. Interbank borrowing and lending networks were created among twenty-seven cities along the Chang Jiang and among fourteen cities in north China. Interregional financial networks were created to link banks in eleven leading cities all over China, including Shenyang, Guangzhou, Wuhan, Chongqing, and Xi'an and also to link the branches of the Agricultural Bank. The first Chinese credit card, the Great Wall Card, was introduced in June 1986 to be used for foreign exchange transactions. Another financial innovation in 1986 was the opening of China's first stock exchanges since 1949. Small stock exchanges began operations somewhat tentatively in Shenyang, Liaoning Province, in August 1986 and in Shanghai in September 1986. Throughout the history of the People's Republic, the banking system has exerted close control over financial transactions and the money supply. All government departments, publicly and collectively owned economic units, and social, political, military, and educational organizations were required to hold their financial balances as bank deposits. They were also instructed to keep on hand only enough cash to meet daily expenses; all major financial transactions were to be conducted through banks. Payment for goods and services exchanged by economic units was accomplished by debiting the account of the purchasing unit and crediting that of the selling unit by the appropriate amount. This practice effectively helped to minimize the need for currency. Since 1949 China's leaders have urged the Chinese people to build up personal savings accounts to reduce the demand for consumer goods and increase the amount of capital available for investment. Small branch offices of savings banks were conveniently located throughout the urban areas. In the countryside savings were deposited with the rural credit cooperatives, which could be found in most towns and villages. In 1986 savings deposits for the entire country totaled over -Y223.7 billion. Prices Determination of Prices Until the reform period of the late 1970s and 1980s, the prices of most commodities were set by government agencies and changed infrequently. Because prices did not change when production costs or demand for a commodity altered, they often failed to reflect the true values of goods, causing many kinds of goods to be misallocated and producing a price system that the Chinese government itself referred to as "irrational." The best way to generate the accurate prices required for economic efficiency is through the process of supply and demand, and government policy in the 1980s increasingly advocated the use of prices that were "mutually agreed upon by buyer and seller," that is, determined through the market. The prices of products in the farm produce free markets were determined by supply and demand, and in the summer of 1985 the state store prices of all food items except grain also were allowed to float in response to market conditions. Prices of most goods produced by private and collectively owned enterprises in both rural and urban areas generally were free to float, as were the prices of many items that state-owned enterprises produced outside the plan. Prices of most major goods produced by state-owned enterprises, however, along with the grain purchased from farmers by state commercial departments for retail sales in the cities, still were set or restricted by government agencies and still were not sufficiently accurate. In 1987 the price structure in China was chaotic. Some prices were determined in the market through the forces of supply and demand, others were set by government agencies, and still others were produced by procedures that were not clearly defined. In many cases, there was more than one price for the same commodity, depending on how it was exchanged, the kind of unit that produced it, or who the buyer was. While the government was not pleased with this situation, it was committed to continued price reform. It was reluctant, however, to release the remaining fixed prices because of potential political and economic disruption. Sudden unpredictable price changes would leave consumers unable to continue buying some goods; some previously profitable enterprises under the old price structure would begin to take losses, and others would abruptly become very wealthy. The Role of Prices As a result of the economic reform program and the increased importance of market exchange and profitability, in the 1980s prices played a central role in determining the production and distribution of goods in most sectors of the economy. Previously, in the strict centrally planned system, enterprises had been assigned output quotas and inputs in physical terms. Now, under the reform program, the incentive to show a positive profit caused even state-owned enterprises to choose inputs and products on the basis of prices whenever possible. State-owned enterprises could not alter the amounts or prices of goods they were required to produce by the plan, but they could try to increase their profits by purchasing inputs as inexpensively as possible, and their off-plan production decisions were based primarily on price considerations. Prices were the main economic determinant of production decisions in agriculture and in private and collectively owned industrial enterprises despite the fact that regulations, local government fees or harassment, or arrangements based on personal connections often prevented enterprises from carrying out those decisions. Consumer goods were allocated to households by the price mechanism, except for rationed grain. Families decided what commodities to buy on the basis of the prices of the goods in relation to household income. Problems in Price Policy The grain market was a typical example of a situation in which the government was confronted with major problems whether it allowed the irrational price structure to persist or carried out price reform. State commercial agencies paid farmers a higher price for grain than the state received from the urban residents to whom they sold it. In 1985 state commercial agencies paid farmers an average price of -Y416.4 per ton of grain and then sold it in the cities at an average price of -Y383.3 a ton, for a loss of -Y33.1 per ton. Ninety million tons were sold under this arrangement, causing the government to lose nearly -Y3 billion. If the state reduced the procurement price, farmers would reduce their grain production. Because grain was the staple Chinese diet, this result was unacceptable. If the state increased the urban retail price to equal the procurement price, the cost of the main food item for Chinese families would rise 9 percent, generating enormous resentment. But even this alternative would probably not entirely resolve the problem, as the average free-market price of grain---Y510.5 a ton in 1987--indicated that its true value was well above the state procurement price. There was no clear solution to the price policy dilemma. The approach of the government was to encourage the growth of nonplanned economic activity and thereby expand the proportion of prices determined by market forces. These market prices could then serve as a guide for more accurate pricing of planned items. It was likely that the Chinese economy would continue to operate with a dual price system for some years to come. Inflation One of the most striking manifestations of economic instability in China in the 1930s and 1940s was runaway inflation. Inflation peaked during the Chinese civil war of the late 1940s, when wholesale prices in Shanghai increased 7.5 million times in the space of 3 years. In the early 1950s, stopping inflation was a major government objective, accomplished through currency reform, unification and nationalization of the banks, and tight control over prices and the money supply. These measures were continued until 1979, and China achieved a remarkable record of price stability. Between 1952 and 1978, retail prices for consumer goods grew at an average rate of only 0.6 percent a year. During the reform period, higher levels of inflation appeared when government controls were reduced. The first serious jump in the cost of living for urban residents occurred in 1980, when consumer prices rose by 7.5 percent. In 1985 the increase was 11.9 percent, and in 1986 it was 7.6 percent. There were several basic reasons for this burst of inflation after thirty years of steady prices. First, the years before the reform saw a generally high rate of investment and concentration on the manufacture of producer goods. The resultant shortage of consumer commodities caused a gradual accumulation of excess demand: personal savings were relatively large, and, in the late 1970s and early 1980s, there was a booming market for such expensive consumer durables as watches and television sets. Second, the real value of many items changed as some resources became more scarce and as technology altered both manufacturing processes and products. The real cost of producing agricultural products rose with the increased use of modern inputs. Manufactured consumer goods that were more technologically advanced and more expensive than those previously on the market--such as washing machines and color television sets--became available. During the early 1980s, both consumer incomes and the amount of money in circulation increased fairly rapidly and, at times, unexpectedly. Consumer incomes grew because of the reform program's emphasis on material incentives and because of the overall expansion in productivity and income-earning possibilities. The higher profits earned and retained by enterprises were passed on to workers, in many cases, in the form of wage hikes, bonuses, and higher subsidies. At the same time, the expanded and diversified role of the banking system caused the amounts of loans and deposits to increase at times beyond officially sanctioned levels, injecting unplanned new quantities of currency into the economy. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90041 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 43 DB Rec# - 636 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH5.04 Title :CHAPTER 5.04: LIVING STANDARDS Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : LIVING STANDARDS Progress since 1949 Before 1949 the Chinese economy was characterized by widespread poverty, extreme income inequalities, and endemic insecurity of livelihood. By means of centralized economic planning, the People's Republic was able to redistribute national income so as to provide the entire population with at least the minimal necessities of life (except during the "three bad years" of 1959, 1960, and 1961) and to consistently allocate a relatively high proportion of national income to productive investment. Equally important to the quality of life were the results of mass public-health and sanitation campaigns, which rid the country of most of the conditions that had bred epidemics and lingering disease in the past. The most concrete evidence of improved living standards was that average national life expectancy more than doubled, rising from around thirty-two years in 1949 to sixty-nine years in 1985 (see Mortality and Fertility; Health Care, ch. 2). In 1987 the standard of living in China was much lower than in the industrialized countries, but nearly all Chinese people had adequate food, clothing, and housing. In addition, there was a positive trend toward rapid improvements in living conditions in the 1980s as a result of the economic reforms, though improvements in the standard of living beyond the basic level came slowly. Until the end of the 1970s, the fruits of economic growth were largely negated by population increases, which prevented significant advances in the per capita availability of food, clothing, and housing beyond levels achieved in the 1950s (see Population, ch. 2). The second major change in the standard of living came about as a result of the rapid expansion of productivity and commerce generated by the reform measures of the 1980s. After thirty years of austerity and marginal sufficiency, Chinese consumers suddenly were able to buy more than enough to eat from a growing variety of food items. Stylish clothing, modern furniture, and a wide array of electrical appliances also became part of the normal expectations of ordinary Chinese families. Food While food production rose substantially after 1949, population increases were nearly as great until the 1980s. Production of grain, the source of about 75 percent of the calories in the Chinese diet, grew at an average rate of 2.7 percent a year between 1952 and 1979, while population growth averaged almost 2 percent a year. Total grain output per capita grew from 288 kilograms a year in 1952 to 319 kilograms in 1978, an increase of only 11 percent in 26 years. In 1984, however, a remarkably good harvest produced 396 kilograms of grain per capita, an increase of 24 percent in only 6 years. In 1985 grain output fell below the peak level of 1984, to 365 kilograms per person, and recovered only partially in 1986 to 369 kilograms per capita (see table B; Crops, ch. 6). Other important food items that remained in short supply before the economic reforms included edible oil, sugar, and aquatic products. Production of oil-bearing crops increased at an average rate of about 2 percent a year from 1952 to 1979, and annual consumption of edible oil was less than 2 kilograms per person in 1979. Between 1978 and 1985, output grew at over 16 percent a year, and annual consumption increased to 5.1 kilograms per person. Sugar production grew at an average annual rate of 4.5 percent after 1952, but in 1979 consumption per person still was only 3.5 kilograms per year. From 1979 to 1985, sugar production grew by 10 percent a year, and the total amount of sugar available per person rose to 5.6 kilograms in 1985. Output of aquatic products rose at an average rate of only 2 percent a year between 1957 and 1978 and declined slightly in 1979; between 1979 and 1985, however, output grew at an average rate of 8.5 percent a year, and individual annual consumption rose from 3.2 kilograms to 4.9 kilograms. Pork, eggs, and vegetables were increasingly available before the 1980s (see Animal Husbandry, ch. 6). Annual consumption of pork--the most commonly eaten meat in China--grew from 5.9 kilograms per person in 1952 to 7.5 kilograms per person in the mid-1970s. In 1979 a sharp increase in procurement prices for pork brought about a surge in supply--to 9.6 kilograms per person. Beginning in 1980, availability increased steadily, reaching 14 kilograms of pork per capita in 1985, an increase of 9 percent each year from 1978. Consumption of fresh eggs followed a similar pattern, climbing from an average of just over one kilogram per person in 1952 to almost two kilograms in 1978. The economic reforms elicited rapid increases in the supply of eggs, as they had with pork, and by 1985 consumption had more than doubled, to 5 kilograms of eggs per person a year, for an increase of over 14 percent a year. Vegetables were the major supplement to grain in the Chinese diet and were very important nutritionally. In 1957 annual vegetable consumption per capita in Chinese cities averaged 109 kilograms and by 1981 had grown to 152 kilograms. Household survey data indicated that in 1985 vegetable consumption had leveled off, at 148 kilograms per person per year in urban areas and 131 kilograms in the countryside, as people used their higher incomes to increase their purchases of more expensive foods, such as meat, fish, and edible oil. As of the late 1970s, famine and malnutrition were no longer major problems in China, but the average diet lacked variety and provided little more than basic nutritional requirements. Protein, in particular, was barely adequate for health maintenance. By the mid-1980s the availability of food had improved dramatically. Bustling street markets offered a good variety of fruits and vegetables throughout the year, and per capita consumption of high-protein foods--meat, poultry, eggs, and fish--increased by 63 percent over the 1979 level, to nearly 27 kilograms a year in 1985. Clothing Before the reform period, clothing purchases were restricted by rationing. Cotton cloth consumption was limited to between four and six meters a year per person in the 1970s. In the 1980s one of the most visible signs of the economic "revolution" was the appearance in Chinese cities of large quantities of relatively modern, varied, colorful, Western-style clothes, a sharp contrast to the monotone image of blue and gray suits that typified Chinese dress in earlier years. Cloth consumption increased from eight meters per person in 1978 to almost twelve meters in 1985, and rationing was ended in the early 1980s. Production of synthetic fibers more than tripled during this period; in 1985 synthetics constituted 40 percent of the cloth purchased (see Textiles, ch. 7). Consumers also tripled their purchases of woolen fabrics in these years and bought growing numbers of garments made of silk, leather, or down. In 1987 Chinese department stores and street markets carried clothing in a large variety of styles, colors, quality, and prices. Many people displayed their new affluence with relatively expensive and stylish clothes, while those with more modest tastes or meager incomes still could adequately outfit themselves at very low cost. Consumer Goods As with food supplies and clothing, the availability of housewares went through several stages. Simple, inexpensive household items, like thermoses, cooking pans, and clocks were stocked in department stores and other retail outlets all over China from the 1950s on. Relatively expensive consumer durables became available more gradually. In the 1960s production and sales of bicycles, sewing machines, wristwatches, and transistor radios grew to the point that these items became common household possessions, followed in the late 1970s by television sets and cameras (see Other Consumer Goods, ch. 7). In the 1980s supplies of furniture and electrical appliances increased along with family incomes. Household survey data indicated that by 1985 most urban families owned two bicycles, at least one sofa, a writing desk, a wardrobe, a sewing machine, an electric fan, a radio, and a television. Virtually all urban adults owned wristwatches, half of all families had washing machines, 10 percent had refrigerators, and over 18 percent owned color televisions. Rural households on average owned about half the number of consumer durables owned by urban dwellers. Most farm families had 1 bicycle, about half had a radio, 43 percent owned a sewing machine, 12 percent had a television set, and about half the rural adults owned wristwatches. Housing Housing construction in towns and cities lagged behind urban population growth. A 1978 survey of housing conditions in 192 cities found that their combined population had increased by 83 percent between 1949 and 1978, but housing floor space had only grown by 46.7 percent. In 1978 there were only 3.6 square meters of living space per inhabitant in these cities, a reduction of 0.9 square meter since 1949. To remedy this problem, construction of modern urban housing became a top priority in the late 1970s, and by the mid-1980s new high-rise apartment blocks and the tall cranes used in their construction were ubiquitous features of large cities. Some apartments in the new buildings had their own lavatories, kitchens, and balconies, but others shared communal facilities. Nearly all were of much higher quality than older houses, many of which were built of mud bricks and lacked plumbing. By 1981 living space in urban housing had increased to 5.3 square meters per person, and by 1985 the figure was 6.7 square meters (see Housing Construction, ch. 7). Despite this progress, scarcity of housing continued to be a major problem in the cities, and many young married couples had to live with parents or make do with a single room (see Housing, ch. 3). Housing conditions in rural areas varied widely. During the 1960s and 1970s, thousands of production brigades built sturdy, sanitary houses and apartments and in many cases entire new villages. With the introduction of the responsibility system and the more than doubling of rural incomes in the early 1980s, another wave of housing construction took place as farm families moved quickly to invest in their major personal assets--their homes--which for the most part were privately owned. Many farm family houses lacked running water, but virtually all had electricity and were considerably more spacious than urban dwellings. In 1980 farm homes averaged 9.4 square meters of living space per person, and by 1985 the figure had risen to 14.7 square meters. Despite extensive construction of new housing, in poorer regions some farm families still lived in traditional dwellings, such as mud-brick and thatch houses or, in some regions, cave houses. Many of the nomadic herders in Nei Monggol, Xinjiang, and Xizang (Tibet) autonomous regions still lived in tents or felt yurts. In the Chang Jiang Valley and in south China, some fishing and boat transportation communities continued to live on their vessels (see Minority Nationalities, ch. 2). Income Distribution Income differences in China since the 1950s have been much smaller than in most other countries. There was never any attempt, however, at complete equalization, and a wide range of income levels remained. Income differences grew even wider in the 1980s as the economic reform policies opened up new income opportunities. More than two-thirds of all urban workers were employed in state-owned units, which used an eight-grade wage system. The pay for each grade differed from one industry to another, but generally workers in the most senior grades earned about three times as much as beginning workers, senior managers could earn half again as much as senior workers, and engineers could earn twice as much as senior workers. In 1985 the average annual income of people employed in state-owned units was -Y1,213. An important component of workers' pay was made up of bonuses and subsidies. In 1985 bonuses contributed 13 percent of the incomes of workers in state-owned units; subsidies for transportation, food, and clothing added another 15 percent. One of the most important subsidies--one that did not appear in the income figures--was for housing, nearly all of which was owned and allocated by the work unit and rented to unit members at prices well below real value. In 1985 urban consumers spent just over 1 percent of their incomes on housing (see Wages and Benefits; Urban Society, ch. 3). The 27 percent of the urban labor force that was employed in collectively owned enterprises earned less on average than workers in state-owned units. The income of workers in collectively owned enterprises consisted of a share of the profit earned by the enterprise. Most such enterprises were small, had little capital, and did not earn large profits. Many were engaged in traditional services, handicrafts, or small-scale, part-time assembly work. In 1985 workers in urban collective units earned an average annual income of -Y968. In the more open commercial environment of the 1980s, a small but significant number of people earned incomes much larger than those in regular state-owned and collectively owned units. Employees of enterprises run by overseas Chinese (see Glossary), for instance, earned an average of -Y2,437 in 1985, over twice the average income of workers in state-owned units. The small but dynamic domestic private sector also produced some lucrative opportunities. Private, part-time schools, which appeared in large numbers in the mid-1980s, offered moonlighting work to university professors, who could double or triple their modest incomes if they were from prestigious institutions and taught desirable subjects, such as English, Japanese, or electronics. Small-scale entrepreneurs could earn considerably more in the free markets than the average income. Business people who served as a liaison between foreign firms and the domestic economy could earn incomes many times higher than those of the best-paid employees of state-owned units. A handful of millionaire businessmen could be found in the biggest cities. These people had owned firms before 1949, cooperated with the government in the 1950s in return for stock in their firms, and then lost their incomes in the political turmoil of the Cultural Revolution. In the late 1970s and early 1980s, when these businessmen were politically rehabilitated, their incomes were returned with the accrued interest, and some suddenly found themselves quite wealthy. Although the number of people earning incomes far beyond the normal wage scale was tiny relative to the population, they were important symbols of the rewards of economic reform and received a great deal of media attention. In 1985 most of these people worked in enterprises classified as "units of other ownership" (private rather than state- or collectively owned enterprises). These enterprises employed only 440,000 people out of the total urban labor force of 128 million in 1985 and paid average annual salaries of -Y1,373, only slightly higher than the overall urban national average. In China, as in other countries, an important determinant of the affluence of a household was the dependency ratio--the number of nonworkers supported by each worker. In 1985 the average cost of living for one person in urban areas was -Y732 a year, and the average state enterprise worker, even with food allowance and other benefits added to the basic wage, had difficulty supporting one other person. Two average wage earners, however, could easily support one dependent. Families with several workers and few or no dependents had substantial surplus earnings, which they saved or used to buy nonessential goods. An important positive influence on the per capita consumption levels of urban families was a decline in the number of dependents per urban worker, from 2.4 in 1964 to 0.7 in 1985. In farm families the dependency ratio fell from 1.5 in 1978 to 0.7 in 1985. Farm incomes rose rapidly in the 1980s under the stimulus of the responsibility system but on average remained considerably lower than urban incomes. Household surveys found that in 1985 average net per capita income for rural residents was -Y398, less than half the average per capita urban income, which was -Y821. The value of goods farmers produced and consumed themselves accounted for 31 percent of rural income in 1985. The largest component of income in kind was food, 58 percent of which was self-produced. Farm family members on average consumed much less of most major kinds of goods than urban residents. For instance, a household survey found in 1985 that the average urban dweller consumed 148 kilograms of vegetables, 20 kilograms of meat, 2.6 kilograms of sugar, and 8 kilograms of liquor. At the same time, a survey of rural households found that the average rural resident consumed 131 kilograms of vegetables, 11 kilograms of meat, 1.5 kilograms of sugar, and 4 kilograms of liquor. Differences of a similar nature existed for consumer durables. Another indication of the gap between urban and rural income levels was the difference in personal savings accounts, which in 1985 averaged -Y277 per capita for urban residents but only -Y85 per capita for the rural population. There was great variation in rural income levels among different provincial-level units, counties, towns, villages, and individual families. While the average net per capita income for rural residents in 1985 was -Y398, provincial-level averages ranged from a high of -Y805 for farm families living in Shanghai to a low of -Y255 for the rural population of Gansu Province. The fundamental influence on rural prosperity was geography (see Physical Environment, ch. 2). Soil type and quality, rainfall, temperature range, drainage, and availability of water determined the kinds and quantities of crops that could be grown. Equally important geographic factors were access to transportation routes and proximity to urban areas (see Internal Trade and Distribution, ch. 8). The highest agricultural incomes were earned by suburban units that were able to sell produce and sideline products in the nearby cities. Under the responsibility system, household incomes depended on the number of workers in each household and the household's success in holding down production costs and in supplying goods and services to local markets. Most of the rural families with the highest incomes--the "10,000-yuan households"--were "specialized households" that concentrated family efforts on supplying a particular service or good. Many of these families owned their own equipment, such as trucks or specialized buildings, and operated essentially as private concerns. An increasingly important influence on rural incomes in the mid-1980s was the expansion of nonagricultural rural enterprises, often referred to as "township enterprises." These were factories, construction teams, and processing operations, most of which were owned by collectives, primarily villages, towns, and townships. Some were owned by voluntary groups of families. Township enterprises were considered by the government to be the main source of employment for rural workers who were leaving agriculture because of rising productivity under the responsibility system. By the end of 1986, township enterprises employed 21 percent of the rural labor force. The movement of rural labor into township enterprises helped to increase average rural incomes because of the higher productivity in nonagricultural jobs. In 1986 industrial workers in rural areas produced an average annual value of -Y4,300 per person, compared with about -Y1,000 per farmer in the same year. The change in farm production from primarily collective to primarily household operations is reflected in household survey data on the sources of rural incomes. Before the 1980s farmers received income in the form of shares of the profits earned by their production teams plus supplementary income from household sideline activities. In 1978 two-thirds of the net income of farm families came from the collective, and only 27 percent was derived from household production. With the shift to the responsibility system these ratios were reversed. By 1982 the collective provided only 21 percent of farm income, while household production provided 69 percent. In 1985 the collective share of farm income had fallen to just over 8 percent, and the family production share had risen to 81 percent. Perhaps the most serious gaps in living standards between rural and urban areas were in education and health care. Primary schools existed in most rural localities, and 80 percent of the country's primary-school teachers worked in rural schools. Secondary schools were less widely distributed; only 57 percent of the total number of secondary-school teachers served in rural schools. Most rural schools were less well equipped, and their staffs less adequately trained than their urban counterparts. Health care had been greatly improved in rural areas in the 1960s and 1970s through sanitation campaigns and the introduction of large numbers of barefoot doctors (see Glossary), midwives, and health workers. Most modern hospitals, fully trained doctors, and modern medical equipment, however, were located in urban areas and were not easily accessible to rural families. In 1985 two-thirds of all hospital beds and medical staff personnel were located in urban hospitals. The economic reforms affected rural education and health care positively in places where farm communities used their higher incomes to improve schools and hospitals and negatively in localities where the reduced role of the collective resulted in deterioration of collective services (see Health Care, ch. 2; Primary Education, ch. 4; Secondary Education, ch. 4). -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90042 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 44 DB Rec# - 637 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH5.05 Title :CHAPTER 5.05: POTENTIAL FOR ACHIEVING NATIONAL GOALS Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : POTENTIAL FOR ACHIEVING NATIONAL GOALS By 1987, under the stimulus of the reform program, the Chinese economy had made major strides toward achieving modernization and improved living standards. The potential for further improvements in efficiency and productivity was greatly increased by the revival of the education system, the opening of the economy to broader trade and cooperation with other countries, the expanded use of the market to enliven commerce and production, and the increased decision-making power of individual economic units (see Modernization Goals in the 1980s, ch. 4; Trade Policy in the 1980s, ch. 8). The country's most important resource was its labor force, the largest in the world. The rapid expansion and improvement of the education system that began in the late 1970s was creating larger numbers of workers who were skilled and well educated, as well as the first substantial numbers of advanced-degree holders to staff the nation's universities and research institutes. In addition, the decentralization of management encouraged the participation in planning and decision making of growing numbers of local and enterprise-level managers, planners, administrators, and scientists. It also trained future economic leaders for higher administrative responsibilities. In terms of material resources, China was adequately endowed to meet the needs of modernization in all but a few materials. Under the new policy of encouraging cooperation and joint ventures with foreign firms, advanced technology was more widely used to exploit China's large deposits of iron ore and other important minerals, along with the country's vast coal and petroleum reserves and its enormous hydroelectric potential--the largest in the world. Much of the investment in expanding the transportation network in the 1980s was aimed at improving access to previously remote mineral and energy resources for both domestic needs and foreign trade. The most stringent resource constraint was the limited amount of arable land, which actually declined in the 1980s as cropland was appropriated for new rural housing and urban expansion. Between 1978 and 1985, the total area sown to crops declined by over 4 percent. The loss of farmland, however, was more than compensated for by improved productivity of the land that remained under cultivation. Farmers expanded the irrigated area, increased fertilizer application, acquired improved crop varieties, and made better use of comparative advantage in determining which crops to grow, resulting in an average rate of growth in the value of crop production of better than 5 percent a year over the same 7-year period. Although agricultural growth rates had begun to fall off in the mid-1980s, the incentives of the responsibility system and greater access to international technical advances suggested that the farm sector could continue to meet the needs of the growing economy in the foreseeable future. The industrial sector, while much less advanced than those of the developed countries, was nonetheless a solid base for modernization. Industrial enterprises were dispersed throughout the country and included units capable of producing all major kinds of machinery, equipment, chemicals, building materials, and light industrial goods. Chinese enterprises could make most of the products required for modernization, and the growing pool of industrial technicians and managers was increasingly capable of effectively integrating advanced foreign technology into Chinese production processes. Key industries were being technologically strengthened by the purchase of advanced foreign equipment and the adoption of modern management techniques. Despite promising potential, formidable obstacles still impeded the drive for modernization. Physical restraints included a renewed increase in birth rates and population growth rates as the number of women of child-bearing age began to rise in 1986 and 1987. Some crucial resources--especially educated personnel and modern equipment--still were in very short supply because of the sheer size of the economy. In the realm of policy, the administration faced the daunting problem of trying to integrate market measures--for efficiency--with government planning and control, the source of stability. In 1987 both kinds of mechanisms exerted extensive influence with the result that market efficiency was hindered by government intervention and government plans were undermined by off-plan activities. Finally, the most serious concern of government leaders was the possibility of future political upheavals. While nearly all Chinese people enjoyed better living conditions as a result of the progress achieved by the reform program, the new policies also had given rise to new social problems and political tensions. Increasing crime and corruption, greater emphasis on the profit motive, widening income disparities, and inflation aroused resistance in many conservative quarters and resulted in the political struggle that caused Hu Yaobang to be forced from his position as Chinese Communist Party general secretary in early 1987. By mid-1987 it was not yet clear what the outcome of the struggle would be or how it would affect the future course of economic reform. * * * Among the most useful works on economic development in China before 1949 are Mark Elvin's The Pattern of the Chinese Past and Dwight H. Perkins' Agricultural Development in China, 1368-1968. These books examine the fundamental relationships between technology, population, society, and economic growth in China. A good, brief integration of much of the scholarship on the Chinese economy in the modern period may be found in Ramon H. Myers' The Chinese Economy Past and Present. China's Modern Economy in Historical Perspective, edited by Perkins, is a valuable collection of articles by leading scholars dealing with various aspects of China's modern economic development. A concise description of the Chinese economy in the eighty years before 1949 is presented in two brief works by Albert Feuerwerker, The Chinese Economy, ca. 1870-1911 and Economic Trends in the Republic of China, 1912-1949. The most authoritative and detailed sources of information on the economy of the People's Republic are the annual statistical yearbooks compiled by the State Statistical Bureau. As of 1987 the most recent was Statistical Yearbook of China, 1986, which contained updated information on most major aspects of the Chinese economy since 1949, as well as a set of explanatory notes that define the terms and measures used. Another useful annual Chinese publication is the Almanac of China's Economy. Recent general treatments of the Chinese economy by Western scholars include a good overview, China's Political Economy by Carl Riskin, and a mathematically oriented work, The Chinese Economy by Gregory C. Chow. Some of the earlier classic works on the post-1949 economy are China's Economic Revolution by Alexander Eckstein, China's Economy by Christopher Howe, China's Economic System by Audrey Donnithorne, The Economy of the Chinese Mainland by Ta-Chung Liu and Kung-Chia Yeh, and The Chinese Economy under Communism by Nai-Ruenn Chen and Walter Galenson. China's Development Experience in Comparative Perspective, edited by Robert F. Dernberger, is a collection of studies by noted economists dealing with China's modern economic development. A good description of the Maoist economic model is presented in John G. Gurley's China's Economy and the Maoist Strategy. The United States Congress Joint Economic Committee has published a series of useful volumes on the Chinese economy: An Economic Profile of Mainland China (1967); People's Republic of China: An Economic Assessment (1972); China: A Reassessment of the Economy (1975); Chinese Economy Post-Mao (1978); China under the Four Modernizations (1982); and China's Economy Looks Toward the Year 2000 (1986). There are many useful works dealing with specific aspects of the Chinese economy. Economic planning is analyzed by Perkins in Market Control and Planning in Communist China and more recently by Nicholas R. Lardy in Economic Growth and Distribution in China. The banking system is described in Money and Monetary Policy in Communist China by Katherine H. Hsiao and in China's Financial System by William A. Byrd. The Political Economy of Reform in Post-Mao China, edited by Elizabeth J. Perry and Christine Wong, is a collection of insightful analyses of the reform process. Prominent among the many works on Chinese agriculture are Food for One Billion: China's Agriculture since 1949 by Robert C. Hsu, Agriculture in China's Modern Economic Development by Lardy, and The Chinese Agricultural Economy, edited by Randolph Barker, Radha Sinha, and Beth Rose. Current economic information appears in several official English-language periodicals from China, including Beijing Review, China Daily, and China Reconstructs. Major periodicals published outside China that monitor the Chinese economy include Asian Wall Street Journal, China Quarterly, Economist, and Far Eastern Economic Review. (For further information and complete citations, see -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90043 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 45 DB Rec# - 638 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.00 Title :CHAPTER 6.00 - AGRICULTURE Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : CHINA HAS THE WORLD'S LARGEST agricultural economy and one of the most varied. The nation stands first among all others in the production of rice, cotton, tobacco, and hogs and is a major producer of wheat, corn, millet, tea, jute, and hemp. This wide range of crops is possible because of the country's varied climate and agricultural zones. China participates on a large scale in international agricultural markets, both as an exporter and as an importer. For over 4,000 years, China has been a nation of farmers. By the time the People's Republic of China was established in 1949, virtually all arable land was under cultivation; irrigation and drainage systems constructed centuries earlier and intensive farming practices already produced relatively high yields. But little prime virgin land was available to support population growth and economic development. However, after a decline in production as a result of the Great Leap Forward (1958-60), agricultural reforms implemented in the 1980s increased yields and promised even greater future production from existing cultivated land. A successful agricultural sector is critical to China's development. First, it must feed more than 1 billion people, about 21 percent of the world's population, using only 7 percent of the world's arable land. Second, it must provide raw materials for the industrial sector. Third, agricultural exports must earn the foreign exchange needed to purchase key industrial items from other countries. Since 1949 China's political leaders have tried a variety of large-scale social experiments to boost agricultural production. First, a massive land reform program eliminated landlords and gave land to those who farmed it. Next, farm families were progressively organized into cooperatives, collectives, and finally people's communes. After more than twenty-five years of experience with communes, officials abolished these institutions, which had become too bureaucratic and rigid to respond to the flexible requirements of agricultural production. Also, farm production incentives languished in the commune system. In 1978 China's leaders began a program of far-reaching agricultural reforms. Townships and villages were organized, and new incentives were incorporated into contractual relationships tying farmers to economic cooperatives and businesses. Since the revolution in 1949, China has devoted most of its investments and administrative energy to the industrial sector. Generally, the agricultural sector received special attention only when the leaders perceived that the sector was beginning to restrain China's overall economic development. Agricultural output basically kept pace with the growth of population but did not expand fast enough to raise living standards. Per capita consumption of grains, fibers, edible oil, sugar, fruits, vegetables, fish, meat, eggs, and dairy products remained low. The value of goods generated by the agricultural sector has grown, but not as fast as output generated by other sectors in the economy. In 1949 about half of the country's output came from the agricultural sector. This ratio dropped to 41 percent by 1955, declined to 31 percent by 1965, and fell another few percentage points in 1975 to 25 percent. But agricultural reforms initiated in the early 1980s brought a rise in agriculture to 33 percent of GNP in 1985. At the same time, more than 60 percent of the national labor force was employed in agriculture. China in the late 1980s was thus poised to confront growing demands for agricultural production with a combination of time-tested farming methods and modern agro-technology. The size and diversity of the country--in geography and in population--however, presented a unique challenge to China's policy makers and implementors. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90044 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 46 DB Rec# - 639 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.01 Title :CHAPTER 6.01: RESOURCES ENDOWMENT Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : RESOURCES ENDOWMENT Arable land in China is scarce; little more than 10 percent of the total land area, most of it in the eastern third of the country, can be cultivated. This compares with more than 20 percent for the continental United States, which is slightly smaller than China. Further agricultural expansion would be relatively difficult because almost no land that could be profitably cultivated remains unused and because, despite intensive cultivation, yields from some marginal lands are low. Some possibility for expansion exists in thinly populated parts of the country, especially in the northeast, but the growing season there is short and the process of land reclamation prolonged and costly. China Proper (see Glossary) is divided by the Qin Ling range into highly dissimilar north and south agricultural areas (see fig. 8). In semitropical south China, rainfall is relatively abundant and the growing season long. Rice is the predominant grain crop. The paddies can generally be irrigated with water from rivers or other sources. Although much of the soil is acid red clay, the heavy use of fertilizer (at one time organic but by the mid-1980s also including a large proportion of chemical nutrients) supports high yields. Frequently two or even three crops a year are cultivated on the same land. Food crops other than rice are also grown, most frequently in hilly areas or during the winter. These include potatoes and winter wheat. The highest grain yields in the country in the mid-1980s were generally found in the Sichuan Basin, the lower Chang Jiang (Yangtze River) Valley, and Guangdong and Fujian provinces, where multiple cropping of rice and other crops was the typical pattern. Cotton, tea, and industrial crops were also produced there. Wheat has traditionally been the main crop in north China, a considerably drier region than south China. The winter wheat crop accounts for nearly 90 percent of China's total production. Spring wheat is grown mainly in the eastern portion of Nei Monggol Autonomous Region (Inner Mongolia) and the northeastern provinces. Other important grain crops include corn, sorghum, and millet. These are usually dryland crops. Since the late 1960s, irrigation has been greatly expanded, but water remains an important limiting factor. Compared with the south, soils in the north are generally better; however, because of the shorter growing season and colder, drier climate, yields per cultivated hectare tend to be lower and irrigation less extensive. Labor is not as abundant in the north as in the south, but cropping patterns tend to require less labor, and mechanization (especially of plowing) is more advanced. The North China Plain, the most important growing area in north China, extends across several provinces. Winter wheat and corn are the leading grain crops; cotton is also grown, and Shandong Province produces peanuts. The North China Plain, although fertile, was traditionally subject to frequent floods and droughts, but water conservation measures ameliorated the problem (see Physical Environment, ch. 2). Winter wheat is grown in the mountainous areas west of this plain, but the climate is more severe and the danger of natural disasters even greater. The fertile soils of the northeastern plains have been used to plant corn, spring wheat, and even rice. High-quality soybeans are grown in the northeast and are exported to many Pacific rim countries. Although Nei Monggol Autonomous Region produces some spring wheat and other grain, it is best known as a pastoral area. Much of China's vast and generally inhospitable northwest and southwest regions is unsuitable for cultivation. Xinjiang-Uygur Autonomous Region in the northwest, like Nei Monggol Autonomous Region, is also best known as a pastoral area. In Xizang Autonomous Region (Tibet) in the southwest, most of the cultivated area has been irrigated, and special strains of wheat, rice, and barley suitable for the climate of that high-altitude region have been developed. China's rural labor force in 1985 consisted of about 370 million people. The quality of the labor force had improved in the previous three decades, primarily because of the introduction of rural schools, which stressed elementary education (see Primary Education, ch. 4). Nevertheless, a large portion of the rural population was illiterate or semiliterate in 1987, and very few high school and college graduates lived in villages and towns. Lack of education continued to retard the spread of advanced technology in rural areas. The scarcity of cultivable land and the abundance of manpower led to the development of labor-intensive production in most parts of the country. And, although China's agriculture was less labor intensive than that in some neighboring countries, it was characterized by meticulous tending of the land and other techniques employed in East Asia for centuries. In the 1980s the rural labor force also was employed in rural capital construction projects and small-scale industries. During the winter months, large numbers of rural people worked on construction and maintenance of irrigation or land-leveling projects. Where rural industrial plants existed, they usually employed a small proportion of the rural labor force, and many peasants also engaged in sideline activities, such as handicrafts. The government tightly limited migration from rural to urban areas (see Migration, ch. 2). By the 1980s China had improved its agricultural resources, but important obstacles remained. The country's agricultural capital stock had been built up in large part by land modification. Through the centuries fields were leveled and consolidated, and substantial investments were made in building and modernizing irrigation facilities. Since the 1950s the production of mechanical agricultural equipment had been a major industry. But in the 1980s many observers still noted a shortage of transportation facilities to take crops to market and bring seed, fuel, and fertilizer to users (see Transportation, ch. 8). In addition to capital, China had available a supply of skilled labor and a stock of technical information on seed varieties and fertilizer use despite the damage done by the Cultural Revolution (1966-76; see Glossary). -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90045 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 47 DB Rec# - 640 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.02 Title :CHAPTER 6.02: AGRICULTURAL POLICIES Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : AGRICULTURAL POLICIES Agricultural policy has gone through three broad phases: the 1950s, when agriculture was collectivized, ending with the Great Leap Forward (1958-60; see Glossary); the period from 1961 to the death of Mao Zedong in 1976, when more agricultural progress came to depend on the supply of capital and modern inputs; and the period under the post-Mao leadership, which has been characterized by greater reliance on markets, prices, and incentives to boost production and to diversify output. (Inputs in this chapter refer to components of production such as land, labor, seed, fertilizer, machinery, tools, and irrigation water.) The 1950s During the 1950s the government of the new People's Republic made a concerted effort to redistribute land more equitably. Although many peasants owned part or all of the small holdings they farmed before 1949, tenancy was common, especially in south China. The Chinese Communist Party (CCP) implemented land reforms in areas under its control even before 1949, and subsequently landlords and wealthy peasants became targets of party attack. Their elimination as a class was a major aim of the land reform movement begun under the Agrarian Reform Law of June 28, 1950 (see The Transition to Socialism, 1953-57, ch. 1). Collectivization of agriculture, which was accomplished in several stages, began about 1952. The first stage of land reform was characterized by mutual aid teams. The mutual aid system was kept simple at first, involving only the temporary sharing of labor and some capital; individual households remained the basic unit of ownership and production. In 1954 mutual aid teams were organized with increasing rapidity into agricultural producers' cooperatives, which differed from mutual aid teams in that tools, draft animals, and labor were shared on a permanent basis. Cooperative members retained ownership of their land but secured a share in the cooperative by staking their plots along with those of other members in the common land pool. By 1956 the transformation of mutual aid teams into agricultural cooperatives was nearly complete. By the end of that year, moreover, the great majority of cooperatives had moved to a still higher stage of collectivization, having become advanced producers' cooperatives. These cooperatives contrasted with those of the earlier stage in that members no longer earned income based on shares of land owned. Instead, collective farm profits were distributed to members primarily on the basis of labor contributions. The average cooperative was made up of 170 families and more than 700 people. Although small private plots were permitted, most of the land was owned collectively by the cooperative. Another development in this period was the establishment of state farms in which land became the property of the state (see Planning and Organization, this ch.). This degree of collectivization was achieved with much less turmoil than had occurred during collectivization in the Soviet Union. As in the Soviet Union, however, investment in the agricultural sector was kept low relative to industrial investment because planners chose to achieve more rapid growth of basic industries. But collectivization did not prevent the growth of agricultural production; grain production, for example, increased by 3.5 percent a year under the First Five-Year Plan (1953-57). Growth was achieved mainly through the intensified use of traditional agricultural techniques, together with some technical improvements. Once collectivization was achieved and agricultural output per capita began to increase, the leadership embarked on the extremely ambitious programs of the Great Leap Forward of 1958-60 (see table 11, Appendix A). In agriculture this meant unrealistically high production goals and an even higher degree of collectivization than had already been achieved. The existing collectives were organized very rapidly into people's communes (see Glossary), much larger units with an average of 5,400 households and a total of 20,000 to 30,000 members on average. The production targets were not accompanied by a sufficient amount of capital and modern inputs such as fertilizer; rather, they were to be reached in large measure by heroic efforts on the part of the peasants. Substantial effort was expended during the Great Leap Forward on large-scale but often poorly planned capital construction projects, such as irrigation works. Because of the intense pressure for results, the rapidity of the change, and the inexperience and resistance of many cadres and peasants, the Great Leap Forward soon ran into difficulties. The peasants became exhausted from the unremitting pressure to produce. The inflation of production statistics, on the theory that accuracy mattered less than political effect, resulted in extravagant claims. Disruption of agricultural activity and transportation produced food shortages. In addition, the weather in 1959-61 was unfavorable, and agricultural production declined sharply (see fig. 9). By the early 1960s, therefore, agriculture was severely depressed, and China was forced to import grain (during the 1950s it had been a net exporter) to supply urban areas. Otherwise, an excessive amount of grain would have been extracted from rural areas (see Economic Policies, 1949-80, ch. 5). Importance of Agriculture Recognized Faced with this depression, the country's leaders initiated policies to strengthen the agricultural sector. The government increased incentives for individual and collective production, decentralized certain management functions, and expanded the role of private plots and markets. The people's commune system was reorganized so that production teams with 20 to 30 households and 90 to 140 people owned most of the assets, accounted for profits or losses, made economic decisions, and distributed income. Most important, the leadership embarked on policies designed to put "agriculture first" in planning, at least in principle. This meant more modern inputs for the countryside. Chemical fertilizer production and imports increased. Modern high-yielding seed varieties began to be developed. Irrigation facilities--many of which had been washed out during disastrous floods in 1959-61--were repaired and expanded, and the government began to provide more mechanical pumps and other irrigation equipment. These improvements were not haphazard; most were focused on more advanced and productive areas. The intent was to build areas of modernized agriculture with high and stable yields that would form the basis for more stable agricultural production. In general, the places designated as "high- and stable-yield areas" were those with adequate irrigation and drainage, so that the payoff for greater use of fertilizer and new seeds would be higher. Recovery By the mid-1970s China's economy had recovered from the failures of the Great Leap Forward. In 1979 per capita grain output first surpassed previous peak levels achieved in 1957. In addition, small enterprises in the mid-1960s began to produce substantial quantities of chemical fertilizer. Government researchers developed fertilizer-responsive seeds. Focusing these inputs on the high- and stable-yield areas meant that parts of China that were already advanced tended to be favored over backward or less-developed regions, thus widening a gap that already had potentially serious implications (see Differentiation, ch. 3). At the same time, the government urged poorer areas to rely mainly on their own efforts. This was symbolized, especially during the Cultural Revolution, by the campaign to "learn from Dazhai." Dazhai was a village in Shaanxi Province that overcame poverty and poor production conditions to become relatively wealthy. The authorities claimed that this was accomplished through self-reliance and struggle. Dazhai became a model of political organization and its leaders national emulation models as well. These policies--"agriculture first," emphasis on the supply of modern inputs, and the Dazhai and other models--formed the framework for agricultural development from the early 1960s until the post-Mao era. The Cultural Revolution caused some disruption in the agricultural sector, such as political struggle sessions and changes in local leadership, but not nearly as much as in the industrial sector (see Trends in Industrial Production, ch. 7). Post-Mao Policies When the party leadership began to evaluate progress in the agricultural sector in the light of its campaign to move the nation toward the ambitious targets of the Four Modernizations (see Glossary), it noted disappointing failures along with some impressive gains. Furthermore, even though per capita grain production increased from the depressed levels of the early 1960s, output stagnated in the 1975-77 period, so that in 1978 per capita production was still not above average levels of the 1950s. Production of other major crops grew even more slowly. The leadership decided in 1978 to thoroughly revamp the rural economic system. Top government and party leaders decided to dismantle the people's commune system and restructure it into a new rural system--the township-collective-household system--consisting of five parts: local government, party, state and collective economic entities, and households. Whereas the commune system integrated politics, administration, and economics into one unit, the new system was designed to have separate institutions handle specific functions. Townships, the basic unit of government in pre-commune days, were reconstructed to handle government and administrative functions. Party committees were to concentrate on party affairs. Economic collectives were organized to manage economic affairs. Households were encouraged to sign contracts with economic collectives. The reform of the commune system fundamentally changed the way farmers were motivated to work. Nonmaterial incentive policies, such as intergroup competitions for red flags, were downplayed. Egalitarian distribution of grain rations declined, and the work payment system in effect on and off since the 1950s was scrapped (see Economic Policies, 1949-80, ch. 5). Rural cadres adopted an entirely new scheme to motivate farmers, called baogan (household production responsibility) system. Under baogan, economic cooperatives assigned specific plots of land to a family to cultivate for up to fifteen years. For each piece of land, the economic cooperative specified the quantity of output that had to be delivered to procurement stations. The contract also outlined household obligations, such as contributions to capital accumulation and welfare funds; the number of days to be contributed to maintenance of water control systems; and debt repayment schedules. Output raised in excess of state and collective obligations was the reward to the household. Families could consume the surplus or sell it in rural markets as they wished. Baogan permitted families to raise income through hard work, good management, wise use of technology, and reduction of production costs. While the overall level of investment within the agricultural sector did not change much during the reform period, substantial changes took place in investment patterns. National leaders called for greater investment in agriculture, but actual state expenditures declined in the first part of the 1980s. Whereas communes had invested considerable sums in agriculture, the rate of investment from the newly formed economic cooperatives was far below the rate before the reform. The revitalization and extension of the rural banking system (the Agricultural Bank and rural credit cooperatives) and favorable lending policies did provide a small but steady source of investment funds for the sector. The major change, however, was that after 1978 farm families were allowed to invest funds, and their investment in small tractors, rural industry, and housing was substantial. In 1983 rural households invested -Y21 billion (for the value of the yuan--see Glossary) in housing compared with -Y11 billion from state sources. Mao Zedong's policy of self-reliance was relaxed, and his dictum "grow grain everywhere" was abandoned. Farm households began to produce crops and animals best suited for their natural conditions. Excellent cotton growing land in Shandong Province that had grown grain during the Cultural Revolution returned to growing cotton. Areas sown with grain crops declined, and areas sown with cotton, oilseeds, and other cash crops expanded. Reform policies also reduced major administrative barriers that had limited labor and capital from moving beyond commune boundaries. Households with insufficient labor or little inclination to farm were able to transfer land contracts to families that were interested in cultivation and animal husbandry. Rural workers were permitted to shift from crop cultivation to commercial, service, construction, and industrial activities in rural townships. Capital in rural areas was permitted to move across administrative boundaries, and individuals invested not only in their own farm production but also in business ventures outside their own villages. The rural marketing system changed substantially in the post-Mao period. The system of mandatory sales of farm produce to local state purchasing stations ended, as did state rationing of food grains, cooking oil, and cotton cloth to consumers. Households with marketable surpluses had several options: goods could be consumed on the farm, sold in local markets, or sold to state stations according to signed purchase contracts. Rural markets disbanded during the Cultural Revolution were reopened, and the number of markets rose from 33,000 in 1978 to 61,000 in 1985. Total trade in these markets increased from -Y12.5 billion in 1978 to -Y63.2 billion in 1985. Consumers purchased food and daily necessities in stores run by the state, cooperatives, and private entrepreneurs and in local free markets. Coincident with these reforms, the state raised procurement prices to improve incentives and increase production by farmers. From 1966 to 1982, wheat and rice procurement prices rose by 66 percent, while oilseed prices increased 85 percent. To avoid urban discontent over high prices, the state absorbed the increasing additional costs, and retail prices for these goods remained constant. The new policies quickly began to produce results. The gross value of agricultural output nearly doubled from 1978 to 1985. Production of grain, oilseeds, cotton, and livestock increased rapidly in this period (see Production, this ch.). Per capita net income of peasant households rose dramatically from -Y134 in 1978 to -Y397 in 1985, but income inequality increased. The demise of collective institutions, however, brought decreases in health, education, and welfare services. Less attention was paid to maintaining the environment, and some water, soil, and forest resources were wasted. Despite this, mid-1980s observers opined that prospects were good for an overall rise in rural prosperity. Reforms in the late 1970s and early 1980s also swept away policies and administrative rules restricting business activity. Old commune production and brigade enterprises were reorganized, and a host of new firms were founded by economic cooperatives and citizens. Business activity included manufacturing, mining, transportation, catering, construction, and services. By the mid-1980s the value generated by these enterprises surpassed the value of output from raising crops and livestock. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90046 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 48 DB Rec# - 641 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.03 Title :CHAPTER 6.03: PLANNING AND ORGANIZATION Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : PLANNING AND ORGANIZATION The state's role in the mid-1980s was chiefly to plan production and manage resources. Among state institutions at the national level, the Ministry of Agriculture, Animal Husbandry, and Fishery was primarily responsible for coordinating agricultural programs. Other central bodies of importance in agricultural policy matters included the State Economic Commission; the State Planning Commission; the ministries of commerce, forestry, and the chemical industry; the State Statistical Bureau; and the Agricultural Bank; and various academies and institutions that conducted research on agricultural science, agricultural economics, and related subjects. Between state institutions at the national level and the townships and villages at the base of the administrative hierarchy were various provincial-level, prefectural, and county-level government organs that also administered programs, including some agricultural research and extension activities. Some 2,000 county-level units coordinated programs and enforced policies with the economic cooperatives and households in their jurisdictions. County-level units sometimes operated their own chemical fertilizer plants or other factories producing basic agricultural items, and they helped direct the allocation of the materials produced to peasant farmers. Some agricultural production occurred on state farms where workers received regular wages, like factory workers. State farms were mostly found on the fringes of the main agricultural areas, especially on newly reclaimed land and particularly in the northeast, where they nevertheless accounted for only about 4 percent of total cultivated land. Most of the economic activity in rural areas took place within the context of collectively and privately owned enterprises. Economic cooperatives, enterprises, and households were guided by their own self-sufficiency requirements, pursuit of profits, and compliance with annual economic plans. Forces of self-sufficiency continued to play an important role in decision making, especially as farm households allocated resources to ensure their own food grain rations. The pursuit of profit traditionally had been a driving force in rural areas, and although this energy had largely been curbed in the past, in the 1980s farmers were encouraged to seek profits. The state drafted annual economic plans that were passed down through administrative channels to assist local cadres. Operators of farms and other enterprises reviewed the plan targets, which guided them to make proper economic decisions. The state has used both direct and indirect methods to affect decisions. In past decades cadres decided what would be produced, what production techniques were to be employed, and how output was to be distributed on the basis of annual plans. Indirect controls, such as prices and interest rates, became more important after 1980. Different combinations of the forces of self-sufficiency, profits, and state plans affected decision making for a given product in a given year. For example, in 1985 cotton farmers were told via state plans how much area to plant in cotton, whereas farmers received no state plans to sow fields with melons; rather, they planted melons in the hope of increasing profits. The state continued to control the economic behavior of farm households, economic cooperatives, and enterprises through powerful political and administrative mechanisms in the late 1980s. The first of these mechanisms was the more than 83,000 township governments, which were responsible for civil and military affairs, public security (police), family planning, and statistics. Village committees numbered more than 940,000 and were subordinate to townships. Although they were not formal government institutions, they maintained public order, managed welfare services, and oversaw water conservancy projects. Probably the most powerful entities on the local level were Chinese Communist Party committees in townships and the subordinate party branches in villages. More than 20 million rural party members staffed posts and headed committees that supervised all aspects of rural life. They coordinated relations between party, government, and economic entities, and they ensured that party policies were followed. They nominated candidates to administrative posts and approved applications for military service, jobs, and opportunities for higher education (see Rural Society, ch. 3; The Cadre System, ch. 10). The second mechanism--control of marketing functions--gave the state powerful tools to influence agricultural decisions. As in other centrally planned economies, the state was responsible for organizing and directing a major part of the flow of resources between sectors. It could achieve this using a variety of means, including prices and markets as well as direct controls. It needed to balance the needs of various sectors for input such as fuel, cement, timber, and machinery (as well as the needs of consumers in both rural and urban areas) in trying to meet its goals (see Structure and Operation of the Economy; Living Standards, ch. 5). The government procured grain and other agricultural products from the peasants to supply urban areas and food-deficient regions with subsistence and to provide raw materials for textile and other light industries. Part of the required amount was obtained simply as a direct tax. The proportion obtained from taxes declined over time, however, and the tax in 1984 was less than 3 percent of the value of total production. The remainder was obtained through purchases by state procurement agencies. In the period from 1957 to 1978, the state raised prices for agricultural produce while lowering the prices of basic items such as fertilizer and fuel used in agricultural production. This was necessary to promote the use of more fertilizer and fuel to obtain greater production and to provide incentives for the production and sale of agricultural commodities. As a third mechanism, the state exercised considerable leverage in rural affairs through its control over credit and agricultural production supplies. The state owned and controlled some 27,000 agricultural banks that served rural areas and provided production loans. Agricultural banks also supervised the activities of more than 42,000 credit cooperatives that provided banking services for cooperatives and rural households and provided production and consumer loans to customers. The state controlled banking activities through administrative regulations, loan policy, and interest rates. The state regulated delivery of fertilizer, machinery, and fuel through its marketing channels. In addition, government control of water and electricity supplies provided the state with an important lever to induce farmers to comply with political policies and economic plans (see table 12, Appendix A). Finally, local governments possessed considerable influence in local affairs because they delivered social welfare services. Economic cooperatives and peasant households were not likely to engage in activities that could lead to diminishing supplies of social services. Rural families desired and increasingly felt entitled to medical, education, welfare, and cultural benefits. Villages competed to have these facilities located within their boundaries, not only to have more convenient access to their services but also to take advantage of the employment opportunities they afforded. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90047 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 49 DB Rec# - 642 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.04 Title :CHAPTER 6.04: OPERATIONAL METHODS AND INPUTS Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : OPERATIONAL METHODS AND INPUTS China's farmers have long used techniques such as fertilization and irrigation to increase the productivity of their scarce land. Over time, many farming techniques have been modernized: chemical fertilizers have supplemented organic fertilizers, and mechanical pumps have come into use in irrigation. Government planners in the 1980s emphasized increased use of fertilizer, improved irrigation, mechanization of agriculture, and extension of improved seed varieties as leading features of the agricultural modernization program. Cropping Patterns All of these elements of modern agriculture are used in the context of the traditional intensive cropping patterns. To maximize year-round use of the land, two or more crops are planted each year where possible. Rice, wheat, cotton, vegetable, and other crop seedlings are sometimes raised in special seedbeds and then transplanted to fields. Transplanting shortens the time required for a crop to mature, which allows farmers the opportunity to squeeze in an additional crop each growing season. Another method to make optimum use of scarce land is to plant seedlings in a mature stand of another crop. For example, when planting winter wheat in October, farmers in the north leave spaces among the rows so that cotton seedlings can be planted or transplanted in April and May. Without intercropping, farmers could raise only one crop a year. Mechanization supports this intensive cropping pattern. Despite a huge rural labor force, labor shortages occur each season when farmers are required to harvest one crop and plant another in its place, all within the space of a few weeks. In the 1980s farmers invested in harvesting and planting machinery to overcome the shortage of labor. Seed breeders also supported intensive cropping patterns by selecting and breeding varieties that had shorter growing seasons. Fertilizer Intensive use of the arable soil made the use of fertilizer imperative to replace nutrients and to help improve yields. Organic fertilizers have long supplied the bulk of soil nutrients and have helped to maintain the structure of the soil. Over the centuries, use of organic fertilizers also increased with the growth in population and with the increased size of livestock herds. Peasants have traditionally used a large proportion of their labor in collecting organic materials for fertilizers. Use has been especially heavy in south China, where more intensive cropping has required more fertilizer and where the sources of fertilizer have been more abundant. Chemical fertilizers, however, have been used more widely since the 1960s. Use of chemical fertilizers in 1985 was more than 150 kilograms per hectare, measured in nutrient weight. The country's considerable future requirements will have to be met by chemical fertilizer because of the natural limits on rapid increases in production of organic fertilizers. Production and imports of chemical fertilizers increased rapidly under the "agriculture first" programs of the early 1960s. The domestic industry was expanded, partly with the help of imported fertilizer factories, and production reached 1.7 million tons by 1965. Imports in 1965 were more than 600,000 tons. In the mid-1960s the government also began to emphasize the production of nitrogen fertilizer in small plants, usually operated by counties, that yielded about 10,000 tons per year. Their products were used locally, which helped conserve transportation resources. In 1972 the government contracted to import thirteen large-scale urea plants, each capable of producing more than 1 million tons of standard nitrogen fertilizer a year. By 1980 these were in operation, and total chemical fertilizer production in 1985 was 13.4 million tons, of which 12.3 million tons were nitrogen fertilizer. Imports added another 7.6 million tons. In the 1980s chemical fertilizer use per hectare was less than the Japanese and Korean averages but more than the Indonesian and Indian averages. Future production and imports were likely to emphasize phosphate and potassium content in order to balance the nutrients obtained from organic fertilizers and from existing factories. Institutional reforms in the early 1980s encouraged households to cut costs and maximize earnings, which probably led to more efficient use of chemical fertilizer as farmers applied fertilizer to those crops giving the highest rates of return. Mechanization Post-Mao reforms dramatically affected farm mechanization. Most commune tractor stations were disbanded, and farm households were allowed to purchase equipment. The percentage of privately owned tractors increased from near zero in 1975 to more than 80 percent in 1985. The area plowed and planted by machine decreased in this period, but peasant use of tractors and trucks to transport goods soared dramatically. As much as 60 percent of tractor use was devoted to local hauling. Firms manufacturing farm machinery adjusted to the shift in rural organization by producing more small tractors, appropriate tractor-drawn equipment, better quality hand tools, and food and feed processing equipment. A rural electric power system--dams, generators, and transmission lines--had been under construction since 1949, and in 1987 most villages had access to electricity. In the period of the Four Modernizations, rural electric power consumption rose by 179 percent, from 18.3 billion kilowatt-hours in 1975 to 51.2 billion kilowatt-hours in 1985. Despite the large stock and high production rate of tractors, most farm tasks in the mid-1980s were performed manually. Rice continued to be transplanted by hand, as local engineers had yet to develop and produce rice transplanters in substantial quantities. Only 36 percent of the land was plowed by machines, only 8 percent sown by machines, and only 3 percent of the crop area was harvested by machines. Draft animals continued to be important sources of power, and the number of animals increased sharply in the post-Mao period. Success in mechanization enabled surplus rural laborers to leave the fields to find jobs in rural industry and commerce. In the 1980s most observers believed that China would continue for some time to use mechanization to solve labor shortages at times of peak labor demand and to concentrate mechanization in areas of large-scale farming, as in the North China Plain and the northeast. Water Conservancy Irrigation was important in China's traditional agriculture, and some facilities existed as long as 2,000 years ago. The extension of water conservancy facilities by labor-intensive means was an important part of the agricultural development programs of the 1950s. During the Great Leap Forward, a number of water conservancy projects were undertaken, but with insufficient planning and capital. During the turmoil and bad weather of 1959-61, many water conservancy works were washed out by floods or otherwise destroyed, considerably reducing the irrigated acreage. Facilities were rebuilt in the early 1960s. By the 1980s irrigation facilities covered nearly half the cultivated land; systems installed since the late 1960s extended over a considerable part of north China, especially on the North China Plain. In the era of post-Mao reform, irrigation and drainage systems expanded to increase the stock of stable and high-yielding land. The inventory of mechanical pumps also greatly increased; powered irrigation equipment reached almost 80 million horsepower in 1985. In this period the government began to charge fees for the water the farmers used, and farmers therefore limited the amount of water applied to their crops on a benefit cost basis. The reorganization of rural institutions weakened administrative measures necessary to make large- scale waterworks function. Lowered investment, poor maintenance, and outright damage to facilities lessened the effectiveness of the system. Adding additional acreage was likely to be increasingly costly because areas not under irrigation were remote from easily tapped water sources. In the mid-1980s government officials recognized the problems and undertook to correct them. North China is chronically short of water and subject to frequent droughts (see Climate, ch. 2). A considerable proportion of its irrigation water comes from wells. Officials in the Ministry of Water Resources and Electric Power (and its predecessors) have periodically proposed diverting water from the Chang Jiang to irrigate the North China Plain. The enormous expense of constructing such a project has precluded its realization. Farmers have also been encouraged to use sprinkler systems, a more efficient use of scarce water resources than flood-type irrigation systems. Pest Control In 1987 the main method of weed and insect control continued to be labor-intensive cultivation. Fields were carefully tended, and a variety of biological controls, such as breeding natural enemies of crop pests, were used. Production and use of chemical herbicides and pesticides increased rapidly from the mid-1950s to the mid-1970s, but output fell subsequently by more than half (to about 200,000 tons) because the products were relatively ineffective, expensive, and highly toxic. Chemical pesticide use, therefore, was low compared with use in other countries. Seed Varieties Improved seed varieties have contributed significantly to improving crop yields. Highly fertilizer-responsive varieties came into use beginning in the mid-1960s. These were comparable to those developed outside China but were adapted to the shorter growing season imposed by multiple cropping. Their extensive use has complemented the large increases in fertilizer use and the increase in irrigated area. In the mid-1970s farmers began to plant hybrid rice, claiming yield increases of more than 20 percent. Hybrid rice is not used elsewhere because of the amount of labor it requires, but more than 6 million hectares of it were planted in the mid-1980s, accounting for 20 percent of total rice area. The China National Seed Company was established in 1978 to popularize improved seed varieties; it exported Chinese vegetable seeds and imported improved grain, cotton, forage, and oil seeds. About 5 percent of China's arable land was being used to raise seed in the mid-1980s, and the company operated more than 2,000 seed companies at provincial, prefectural, and county levels. Agricultural Science Agricultural science suffered from changes in policy and emphasis after the 1950s. The Cultural Revolution disrupted agricultural science training and research programs, but since the mid-1970s training and research programs have been restored. Government officials emphasized practical, production-oriented scientific work. The rural extension system popularized new techniques and new inputs, such as sprinkler irrigation systems. In 1987 eighty-four agricultural colleges and research institutes pursued research in seven broad fields: agriculture, forestry, aquatic production, land reclamation, mechanization, water conservation, and meteorology. In addition, almost 500 agricultural schools had a total staff of 29,000 teachers and 71,000 students. In the 1980s thousands of researchers and students were sent abroad (see Educational Investment, ch. 4). Research was being strengthened by the construction of sixteen regionally distributed agricultural experiment stations. New agricultural journals and societies were established to promote the dissemination of research results within the country. The Chinese sought technical information abroad as well through the import of technology and machinery and the international exchange of delegations. -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90048 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 50 DB Rec# - 643 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.05 Title :CHAPTER 6.05: PRODUCTION Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : PRODUCTION Five economic activities generated the bulk of agricultural output: crops, livestock, forestry, fishery, and sideline production (rural industry). Crop raising was the dominant activity, generating as much as 80 percent of the total value of output in the mid-1950s. The policy of stressing crop output was relaxed in the early 1980s, and by 1985 this figure fell to about 50 percent. The proportion of output generated by the livestock, forestry, and fishery sectors increased slowly after the 1950s. The sector that expanded the most rapidly was sideline production, whose share increased from 4 percent in 1955 to 30 percent in 1985. The results of China's agricultural policies in terms of output have been mixed. Food consumption was maintained at subsistence level despite the catastrophic drop in production following the Great Leap Forward but failed to increase much above that level until the 1980s. Investment in irrigation and water control projects blunted the effects of severe weather on output, but in many parts of the country production continued to be negatively affected by the weather. Production rates varied considerably throughout the country, creating income inequalities. Despite rapid gains in rural areas in the 1980s, a substantial gap remained between rural and urban living standards (see Differentiation, ch. 3). Crops In the mid-1980s China's farmers annually planted crops on about 145 million hectares of land. Eighty percent of the land was sown with grain, 5 percent with oilseed crops, 5 percent with fruits, 3 percent with vegetables, 2 percent with fiber crops, and 0.5 percent with sugar crops and tobacco. Other crops made up the remaining 4 percent. In the 1960s and 1970s, when policies emphasized grain output, the area sown with grain exceeded 85 percent. After the reforms were launched in the early 1980s, the area sown with grain fell below 80 percent and the area sown with other crops expanded correspondingly. Grain is China's most important agricultural product. It is the source of most of the calories and protein in the average diet and accounts for a sizable proportion of the value of agricultural production. China's statisticians define grain to include wheat, rice, corn, sorghum, millet, potatoes (at one-fifth their fresh weight), soybeans, barley, oats, buckwheat, field peas, and beans. Grain output paralleled the increase in population from 1949 through 1975 but rose rapidly in the decade between 1975 and 1985 (see table 13, Appendix A). In 1987 China was the world's largest producer of rice, and the crop made up a little less than half of the country's total grain output. In a given year total rice output came from four different crops. The early rice crop grows primarily in provinces along the Chang Jiang and in provinces in the south; it is planted in February to April and harvested in June and July and contributes about 34 percent to total rice output. Intermediate and single-crop late rice grows in the southwest and along the Chang Jiang; it is planted in March to June and harvested in October and November and also contributed about 34 percent to total rice output in the 1980s. Double-crop late rice, planted after the early crop is reaped, is harvested in October to November and adds about 25 percent to total rice production. Rice grown in the north is planted from April to June and harvested from September to October; it contributes about 7 percent to total production. All rice cultivation is highly labor intensive. Rice is generally grown as a wetland crop in fields flooded to supply water during the growing season. Transplanting seedlings requires many hours of labor, as does harvesting. Mechanization of rice cultivation is only minimally advanced. Rice cultivation also demands more of other inputs, such as fertilizer, than most other crops. Rice is highly prized by consumers as a food grain, especially in south China, and per capita consumption has risen through the years. Also, as incomes have risen, consumers have preferred to eat more rice and less potatoes, corn, sorghum, and millet. Large production increases in the early 1980s and poor local transportation systems combined to induce farmers to feed large quantities of lower quality rice to livestock. In 1987 China ranked third in the world as a producer of wheat. Winter wheat, which in the same year accounted for about 88 percent of total national output, is grown primarily in the Chang Jiang Valley and on the North China Plain. The crop is sown each fall from September through November and is harvested in May and June the subsequent year. Spring wheat is planted each spring in the north and northeast and is harvested in late summer. Spring wheat contributes about 12 percent of total wheat output. Wheat is the staple food grain in north China and is eaten in the form of steamed bread and noodles. Per capita consumption has risen, and the demand for wheat flour has increased as incomes have risen. Wheat has been by far the most important imported grain. Corn is grown in most parts of the country but is most common in areas that also produce wheat. Corn production has increased substantially over time and in some years has been second only to production of rice. Consumers have traditionally considered corn less desirable for human use than rice or wheat. Nevertheless, it frequently yields more per unit of land than other varieties of grain, making it useful for maintaining subsistence. As incomes rose in the early 1980s, consumer demand for corn as a food grain decreased, and increasing quantities of corn were allocated for animal feed. Millet and sorghum are raised in the northern provinces, primarily in areas affected by drought. Millet is used primarily as a food grain. Sorghum is not a preferred food grain and in the 1980s was used for livestock feed and maotai, a potent alcoholic beverage. Both Irish and sweet potatoes are grown in China. In the 1980s about 20 percent of output came from Irish potatoes grown mostly in the northern part of the country. The remaining 80 percent of output came primarily from sweet potatoes grown in central and south China (cassava output was also included in total potato production). Potatoes are generally considered to be a somewhat lower-quality food grain. Per capita consumption has declined through time. Potatoes are also used in the production of vodka and as a livestock feed. Other grains, such as field peas, beans, and pulses, are grown throughout China. These grains are good sources of plant protein and add variety to the diet. Barley is a major grain produced in the lower Chang Jiang Basin. It is used for direct human consumption, livestock feed, and increasingly is in great demand as a feedstock to produce beer. Soybeans, a leguminous crop, are also included in China's grain statistics. The northeast has traditionally been the most important producing area, but substantial amounts of soybeans are also produced on the North China Plain. Production of soybeans declined after the Great Leap Forward, and output did not regain the 10-million-ton level of the late 1950s until 1985. Population growth has greatly outstripped soybean output, and per capita consumption has fallen. Soybeans are a useful source of protein and fat, an important consideration given the limited amount of meat available and the grain- and vegetable-based diet. Oilseed cakes, by-products of soybean oil extraction, are used as animal feed and fertilizer. Cotton is China's most important fiber crop. The crop is grown on the North China Plain and in the middle and lower reaches of the Chang Jiang Valley. In the 1970s domestic output did not meet demand, and significant quantities of raw cotton were imported. Production expanded dramatically in the early 1980s to reach a record 6 million tons in 1984. Although production declined to 4.2 million tons in 1985, China was still by far the largest cotton producer in the world. In the 1980s raw cotton imports ceased, and China became a major exporter of cotton. Significant quantities of jute and hemp are also produced in China. Production of these crops expanded from 257,000 tons in 1955 to 3.4 million tons in 1985. Major producing provinces include Heilongjiang and Henan and also provinces along the Chang Jiang. China is an important producer of oilseeds, including peanuts, rapeseed, sesame seed, sunflower seed, and safflower seed. Oilseed output in 1955 was 4.8 million tons. Output, however, did not expand between 1955 and 1975, which meant per capita oilseed availability decreased substantially because of population growth. Production from 1975 to 1985 more than tripled, to 15.5 million tons, but China continues to have one of the world's lowest levels of per capita consumption of oilseeds. Sugarcane accounted for about 83 percent of total output of sugar crops in 1985. Major producing provinces include Guangdong, Fujian, and Yunnan provinces and Guangxi-Zhuang Autonomous Region. Production has grown steadily through the years from about 8 million tons in 1955 to over 51 million tons in 1985. Sugar beet production accounted for the remaining 17 percent of total output in 1985. Major producing provinces and autonomous regions include Heilongjiang, Jilin, Nei Monggol, and Xinjiang. Sugar beet production rose from 1.6 million tons in 1955 to 8.9 million tons in 1985. Despite these impressive increases in output, per capita consumption was still very low, and large quantities were imported. China is the world's largest producer of leaf tobacco. Farmers produce many kinds of tobacco, but flue-cured varieties often make up more than 80 percent of total output. Major producing areas include Henan, Shandong, Sichuan, Guizhou, and Yunnan provinces. Tea and silk, produced mainly in the south, have traditionally been important commercial crops. The domestic market for these products has been substantial, and they continue to be important exports. Given China's different agricultural climatic regions, many varieties of vegetables are grown. Farmers raise vegetables in private plots for their own consumption. Near towns and cities, farmers grow vegetables for sale to meet the demand of urban consumers. Vegetables are an important source of vitamins and minerals in the diet. Temperate, subtropical, and tropical fruits are cultivated in China. Output expanded from 2.6 million tons in 1955 to more than 11 million tons in 1985. Reforms in the early 1980s encouraged farmers to plant orchards, and the output of apples, pears, bananas, and citrus fruit was expected to expand in the late 1980s. Animal Husbandry In 1987 China had the largest inventory of hogs in the world. The number increased from about 88 million in 1955 to an estimated 331 million in 1985. Hogs are raised in large numbers in every part of China except in Muslim areas in the northwest. Most hogs are raised in pens by individual farm households, but in the mid-1980s the Chinese were constructing large mechanized feeding operations on the outskirts of major cities. Before the 1980s the state's major goal was to increase output with little regard to the ratio of meat to fat. In the 1980s consumers became more conscious of fat content, and breeders and raisers were shifting to the production of leaner hogs. Draft animals are important sources of motive power in rural areas. Draft animal numbers increased steadily from about 56 million in 1955 to 67 million in 1985 despite rapid increases in the number of tractors and trucks in rural areas. Animals that provide draft power for crop cultivation and rural transportation include water buffalo, horses, mules, donkeys, oxen, and camels. Sheep and goats are China's most important grazing animals. Most of these animals are bred in the semiarid steppes and deserts in the north, west, and northwest. The number of sheep and goats has expanded steadily from about 42 million in 1949 to approximately 156 million in 1985. Overgrazed, fragile rangelands have been seriously threatened by erosion, and in the late 1980s authorities were in the midst of a campaign to improve pastures and rangelands and limit erosion. The dairy and poultry sectors of the livestock economy grew most rapidly in the 1980s. Dairy cows numbered just under 500,000 in 1978 but tripled to around 1.5 million in 1985. Consumers with rising incomes demanded more fresh and powdered milk for infants and elderly people. A large part of this increased demand was met by individual farmers who were permitted to purchase and own their animals. The government supported increased milk output by importing breeding animals and constructing large dairies and processing facilities. Most poultry was still grown in farmyard flocks, but reforms encouraged individuals and groups of households to invest in confined feeding operations. Egg output, especially, increased rapidly in the 1980s. China's first modern feed mills were constructed in the 1970s, followed by many mills equipped with imported technology. Production of mixed and compound feed grew rapidly, reaching more than 12 million tons in 1985. This development supported the growth of animal husbandry. Forestry Forests were cleared in China's main agricultural areas centuries ago. Most timber, therefore, comes from northeast China and the less densely populated parts of the northwest and southwest. The yield totaled around 60 million cubic meters in 1985. Bamboo poles and products are grown in the Chang Jiang Valley and in south China, and output reached 230 million poles in 1985. Rubber trees are cultivated in Guangdong Province; output rose steadily from 68,000 tons in 1975 to 190,000 tons in 1985. Other important forestry products include lacquer, tea oilseed, tung oil, pine resin, walnuts, chestnuts, plywood, and fiberboard. The area covered by forests amounted to some 12 percent of total land area, which officials hoped to increase over the long term to 30 percent. Afforestation campaigns are carried out annually to re-establish forests, plant shelter belts, and set up soil stabilization areas. But because of continued overcutting of forests and low seedling survival rates in newly planted sections, China's forests are in a precarious situation. Better management and increased investment over a long period of time will be required to increase output of valuable forest products. Fishery Aquatic production increased slowly after the 1950s, reaching 6.2 million tons in 1985. Output is composed of both marine and freshwater fish, shellfish, and kelp. Marine products contributed 63 percent to total aquatic production. Fishermen collected more than 83 percent of marine output from the open seas. The remaining 17 percent of output came from sea farms along China's coasts. The freshwater catch accounted for 37 percent of total aquatic output in the mid-1980s. Fish farming in ponds accounted for 80 percent of the total freshwater catch; only 20 percent was collected in natural rivers, lakes, and streams. Fish from all sources provides consumers with an important source of protein and added variety in their diet. Sideline Production In addition to improving the principal yield of agricultural units, the post-Mao economic reforms greatly stimulated sideline production in rural areas. Before 1984 sideline production generated by production brigades, production teams, and households included hunting, fishing, collecting wild herbs, and producing family handicrafts, as well as various kinds of industry, commerce, transportation, and services. Sideline industrial output included fertilizer, farm machinery, textiles, bricks, electrical appliances, and various consumer goods. Sideline industrial activities also included processing cotton, grain, and oilseeds; mining coal, iron ore, and gold; and dredging gravel and sand. Among the services included in sideline output were barbering, entertainment, and catering. As part of the sideline economy, rural entities transported people and goods and operated retail stores; rural construction groups built dams, factory sites, roads, and houses. Of all kinds of sideline production, the state counted only the industrial output of enterprises operated by counties and communes in its total industrial output. Output rose so rapidly that by 1985 the value of production generated in sidelines exceeded the value of principal crop and livestock production. To make the gross value of agricultural output more realistically represent agricultural production, statisticians in 1985 limited sideline production to hunting and fishing, collecting wild herbs, and producing family handicrafts. After 1985, therefore, there were at least three aggregate measures of economic performance: gross value of output; gross value of agricultural output (crops, livestock, forestry, aquatic, and sideline); and gross value of rural society, which included the gross value of agricultural output plus the value of rural industrial, transportation, construction, and other output (see Rural Industry, ch. 7). -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90049 . ARMY AREA HANDBOOK access is provided courtesy of UM-St. Louis Libraries Match 51 DB Rec# - 644 Dataset-ARMAN Source :U.S. DEPARTMENT OF THE ARMY Source key :AR Program :ARMY AREA HANDBOOKS Program key :AR ARMAN Update sched. :Occasionally ID number :AR ARMAN CHINACH6.06 Title :CHAPTER 6.06: AGRICULTURAL TRADE Data type :TEXT End year :1994 Date of record:04/19/1994 Keywords 3 : | China Text : AGRICULTURAL TRADE Since 1949 agricultural exports for most years have exceeded agricultural imports. China's officials have used this export surplus as an important source for financing the importation of high-priority industrial items. Agricultural exports have risen through the years but have not grown as fast as industrial exports. In 1970, for example, agricultural exports accounted for 45 percent of total exports, but in 1985 China's US$6.5 billion in agricultural exports was only 20 percent of the total exports. In the 1970s agricultural imports accounted for about 30 percent of total imports. For example, of the US$7.1 billion worth of products imported in 1977, US$2.1 billion (30 percent) were agricultural products. In 1985 US$4.7 billion worth of agricultural products were imported, which was only 5 percent of the US$42.8 billion of total imports (see fig. 10; table 14, Appendix A). The ratio of agricultural imports to other imports was expected to rise in the late 1980s and 1990s. Wheat has been imported nearly every year since the early 1950s. These imports averaged about 5 million tons in the 1960s and 1970s but rose to a peak of more than 13 million tons in 1982. Wheat imports fell as wheat output expanded rapidly, so that by 1985 imports fell to just under 5.5 million tons. Argentina, Australia, Canada, France, and the United States have been major sources of China's wheat imports. China is one of the world's largest rice exporters, annually shipping out about 1 million tons. Rice exports go primarily to Asian and East European countries and to Cuba. China is both an importer and an exporter of coarse grains. Up to 1984 sorghum, millet, and corn exports usually totaled only several hundred thousand tons but reached a peak of over 5 million tons in 1985 (see Crops, this ch.). In the mid-1980s corn was shipped primarily to Japan, North Korea, and the Soviet Union. Barley is imported as a livestock feed and as a feedstock to brew beer. Corn is imported for human consumption and for livestock feed. Quantities imported varied considerably depending on internal supply conditions and prices in international markets. Large quantities of corn were imported during the Great Leap Forward (when grain production fell dramatically), in the early 1970s, and at the end of the 1970s, when corn imports hit a peak of 3.6 million tons. Major coarse grain suppliers include Argentina, Australia, Canada, France, Thailand, and the United States. Soybeans have been a major foreign exchange earner for most of this century. Static production and rising domestic demand for soybeans and soybean products meant a decline in exports until the early 1980s. For example, in 1981 Argentina and the United States shipped more than 500,000 tons of soybeans to China; these two countries and Brazil also exported soybean oil to China. Domestic production expanded in the early 1980s, however, and by 1985 soybean imports fell and exports exceeded 1 million tons. Also in the early 1980s, China began to ship soybean meal to Asian markets. Before 1983 China was one of the world's largest importers of raw cotton. These imports averaged around 100,000 tons annually but climbed to a peak of nearly 900,000 tons in 1980. A dramatic increase in domestic cotton production filled domestic demand, and exports exceeded imports in 1983. In 1985 China shipped nearly 500,000 tons of raw cotton to Asian and European markets. Sugar imports to China come primarily from Australia, Cuba, the Philippines, and Thailand. Quantities imported climbed steadily from 100,000 tons in 1955 to 500,000 tons in the mid-1970s and continued to rise dramatically to a peak of more than 2 million tons in 1985. In addition to the commodities just noted, China also exports a host of other products from its vast agricultural resources. Large quantities of live animals, meat, fish, vegetables, and fruits are shipped to Asian markets. Tea, spices, and essential oils are shipped to major international markets. China also exports animal products, such as hog bristles, fur, and other animal products. Agricultural trade remains an important component of China's general agricultural modernization effort. China is likely to continue to import grain and other agricultural products for the foreseeable future. These imports would be used to maintain or improve living standards, especially in urban areas. In rural areas, imports help reduce the pressure for more procurement, freeing resources for increased consumption or investment in local agricultural programs. In the long run, China may reduce the expenditure of foreign exchange needed to finance agricultural imports. These expenditures reduce the amount of other imports that can be used for modernization and investment in the nonagricultural sectors of the economy. Success in reducing agricultural imports will eventually depend on the development of domestic sources of supply, for which China hopes to rely in part on new production bases for marketable crops. Pressure for increased consumption is likely to continue. The increase in population and the need for more agricultural goods (including grain, industrial crops, and grain-consuming livestock) to support higher real incomes both in urban areas and in the new agricultural base areas will continue to be factors creating this pressure. * * * Useful general works on China's agricultural sector include Dwight H. Perkins' Agricultural Development in China 1368-1968; Randolph Barker, Radha Sinha, and Beth Rose's The Chinese Agricultural Economy; and Nicholas R. Lardy's Agriculture in China's Modern Economic Development. Since 1981 China's State Statistical Bureau has published data on the agricultural sector in annual statistical yearbooks. More detailed statistics, summary information, and policy statements are published by the Ministry of Agriculture, Animal Husbandry, and Fishery in its Nongye Nianjian (Agricultural Yearbook). The China Daily, printed in English and published in China, contains important data and policy statements. Thousands of Chinese-language books on agricultural topics, and newspapers such as Zhongguo Nongbao (China Agriculture), are available by purchase or subscription. The China Quarterly, published in London, frequently contains articles on Chinese agriculture by foreign observers. The National Academy of Sciences Committee on Scholarly Communication with the People's Republic of China has published several interesting trip reports by United States agricultural delegations. The United States government also publishes information and analysis concerning China. The Joint Economic Committee of the United States Congress periodically publishes a volume on China's economy; the 1986 edition is entitled China's Economy Looks Toward the Year 2000. Each year the United States Department of Agriculture publishes China: Situation and Outlook Report, which reviews China's agricultural production and trade for the past year and provides an outlook for the coming year. The department also publishes monthly forecasts of production and trade and prepares specialized reports on various topics. (For further -------------------------------------------------------------------------- This file extracted from Dept. of Commerce, Economics & Statistic's Division's May 1994 NATIONAL TRADE DATA BANK (NDTB) CD-ROM, SuDoc C1.88:994/5/V.2 Processed 6/10/1994 by RCM (UM-St. Louis Libraries)/ AAH90050 .