CHINA'S DOMESTIC ECONOMY AND TRADE

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005467611
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 2
• Document Creation Date: June 23, 2015
• Document Release Date: December 11, 2009
• Case Number: F-2010-00133
• Publication Date: December 30, 1997

APPROVED FOR
RELEASE DATE:
30-Nov-2009
(b)(1)
(b)(3)
30 December i997
China's Domestic Economy and Trade
China has been the world's fastest growing major economy during the last
10 years, averaging almost 10-percent annual GDP growth. Dunng the 1990s. growth
has been even faster, as an investment-led boom not only pushed growth over
13 percent in 1992 and 1993 but also fueled sharp increases in inflation. Beijing
adopted a moderate austerity program in mid-1993 that gradually slowed growth and
helped sharply reduce inflation in 1995 and 1996:
Chinese press.
According to Chinese statistics, real GDP grew 9.7 percent in 1996-down
from 10.2 percent in'1995 and 11.8 percent in 1994. Preliminary data
indicate that growth dropped to 8.8 percent this year.
? Beijing's commitment to "relatively tight" monetary policies have helped
keep this year's rise in retail prices down to 0.8 percent, according to official
in addition to holding the line on monetary policy, senior leaders have stressed :l:at
state trite prise reform will require more layoffs, bankruptcies, and restructuring.
The economic slowdown has raised pressures for looser credit.
yearly one-half of
China's state industrial enterprises were in the red at the end of September,
Trade performance weakened in 1996, in part because the Chinese yuan
appreciated against other major currencies, but rebounded in 1991. According to
official projections, China will register a trade surplus of S40 billion this year:
? Lower than expected GDP growth has slowed import demand and
contributed to this booming trade surplus; moreover, government efforts to
speed payments of export tax rebates-which were frequently delayed early
last year-have also boosted export growth.
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SUBJECT: China's Domestic Economy and Trade
? Combined with foreign direct investment of S62 billion, this surplus pushed
foreign exchange reserves up by more than $30 billion to 5140 billion at the
end of 1997--second only to Japan,
China's trade surplus with the United States rose 23 percent in the first ten
months of this year to more than $41 billion, according to official US trade statistics.
Chinese imports from the United States grew by almost 13 percent during the same
period, as compared to a 21-percent increase in Chinese exports to the United States:
? Much of this year's slow growth in Chinese imports from the United States
was because of a decline in overall Chinese cereal purchases on the heels of
two successive record grain harvests.
? Foreign-invested enterprises were probably the main force behind the increase
of US imports from China: these were driven by steady growth :n US
purchases of Chinese medium-technology goods.
China's WTO accession efforts have been slowed because of pressure by the US
and other WTO members for greater market access for their goods and services
through tariff reductions and the elimination of nontariff barriers. Press repots show
that Chinese officials unveiled a "comprehensive" services liberalization offer on 5
December during the WTO multilateral working party meeting in Geneva. The offer
included commitments in the banking, insurance, and distribut' se rs but failed to
include anything on basic telecommunications.