CONTROL RECORD FOR SUPPLEMENTAL DISTRIBUTION

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79-00928A000100050001-9
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 31
• Document Creation Date: November 16, 2016
• Document Release Date: April 13, 2000
• Sequence Number: 1
• Publication Date: March 1, 1974
• Content Type: FORM

Analyst:
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- Jppr ve or a ease
CONTROL RECORD FOR SUPPLEMENTAL DISTRIBUTION STATINTL^
DISSEM: 21 Mar 74 NO ELITE
SERIES NUMBER
A ER 74-9 GRS aeries)
CLASSIFICATION OF REPORT
UNCLASSIFIED
DISTRIBUTION TO RC
102
DATE OF DOCUMENT ~ ~-
-March 1974
NUMBER OF COPIES
550
NUMBER IN RC
~-~p
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DATE
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22 Mar 74
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 Approved For a ease
CONTROL RECORD FOR SUPPLEMENTAL DISTRIBUTION
SERIES NUMBER
CLA SIFICATION OF R,gPORT
DISTRIBUTION TO RC
DATE OF DOCU~T
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Project No. ~ ~, ~p rp 9~
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gapore
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AFRICA NEAR EAST AND SOUTH ASIA
Afghanistan, Kabul
Algeria, Algiers Bangladesh, Dacca
Botswana, Gaberones Ceylon, Colombo
Burundi, Bujumbura Cyprus, Nicosia
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Ethopia, Addis Ababa Israel, Tel Aviv
Gabon, Libreville Jordan, Amman
Gambia, Bathurst Kuwait, Kuwait
Ghana, Accra Lebanon, Beirut
Guinea, Conakry Nepal, Katmandu
Ivory Coast, Abidjan Pakistan, Islamabad
Kenya, Nairabi Saudi Arabia, Jidda
Lesotho, Maseru South Yemen, Aden
l~iberia, Monrovia Syria, Damascus
Libya, Tripoli ~ Turkey, Ankara
Malagasy Republic, Tananarive
Mali, Bamako ARA
Malawi, Zomba
Mauritania, Novakchatt Argentina, Buenos Aires
Mauritius, Port~Louis Bahamas, Nassau
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Mozambique, Lourenco Marques Bolivia, La Paz
Niger, Niamey Brazil, Rio de Janeiro
Nigeria, Lagos Chile, Santiago
F..hodesia, Salisbury Colombia, Bogota
I'.wanda, Kigali Costa Rica, San Jose
Senegal, '~akar Dominican Republic, Santo Domingo
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MEMORANDUM FOR: St/A/DS
FROM: Chief, 5t/P/ C
SUBJECT: Dissemination o# ERA 74-9a An Index of
Construction Activity in China (Pro,ject
21.6694), UNCLASSIFIELI
You will receive 42 copies of subject report. It is requested
that they be disseminated as indicated below.
No. of Copies Recipient
1 St/SD
1 St / CS
~ 11 D/C {8-C/CIi; 1-C/RE; 1-C/IN)
2 D/U
2 D/I
1 D/S
1 D/D
23 St/plc 25X1A
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SANITIZING INST UCTIONS
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ITEM
DATE
INITIALS R OVE
25X1A
UNEDITED DRAFT
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DELETE
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RELEASABLE TO
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SUBSTITUTE
25X1 C
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FORM
4. 70
OBSOLETE PREVIOUS
2358 EDITIONS
(9- 6.43)
SECRET ~RODR ~
/L!~/
E.clu ed from automatic
downgrading and declassifcation
 25X1 C 25X1 C
25X1 C
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SOURCES
The sources providing information for estimating the amounts
used in construction and the price weights for the three building
materials are noted below.
Cement
1.
Chien-chu Tsai-liao Kung-yeh, #5, Peking, 7 .March 1964, p.
2.
2.
China News Service, Canton, 6 February 1965, and 22 February-1965.
3.
Foreign Broadcast Information Service, People's Republic of
China, ccc-2, 31 December 1964; b-10, 3 January 1972; b-1,
1 December 1972; b-12, 27 December 1973._.
4.
Jen-min Jih-~ao, Peking, 3 May 1.964, p. 1; 29 November 1.971, p. 4.
5.
U.S. Congress, Joint Economic Committee,' People's Republic of
China: An Economic Assessment, Washington, D.G., 1972.
6.
New China News Agency, various releases..
7.
Peking Review, #2, 11 January 1974, p. 23.
8.
BBC, Summary of World Broadcasts, FE/W707/A/13, 17 January 1973;
FE/W241/B/28, 4 December 1963.
9.
Survey of Ch~,na Mainland. Press, #2191, 1 February 1960, p.
8.
10.
Ten Great Yearsa Statistics of 'the Economic and Cultural
A.c;hie_vements of _the _People ? s Repuhli c_ of_ China, Fe'~cing,
Foreign .Lan.c~tzac~cs Press, 1960.
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Timber
In addition to the sources above, the following were used:
1. Chao, Kang. Thy Construction: Industry iri Cammurii.st China,
Aldine Pubiishi.ng Ca., Chicago, 196.8.
2. C_hi--~iua Ching-'chi (Planned Econam~r) , #11, 1957, p. 22.
3, Richardson, S.D., Forestry~in Communist China,. Johns Hopkins
University Press, Baltimore, 1966.
Steel
In addition to the sources for cement and timber, the following
were used:
1. Foreign Broad'cas't Information Service, Far East, BSB?{6,
2Q October 1959.
2. Jen-min Jih=paa, Peking, 12 February' 1962, p. ~.
3. Chi-hua Ching-chi (Planned Economy}, #9, 1957, p. 13.
4. Yeh-chin Pao, #48, Peking, 4 December 1959, p. 37.
5. W_o kuo Ti i ke Wu-Wien-chi'-hua-shih-chi. Ti: Sheng-tsari 'Ho
Hsiao-fei_ Kuan-hsi, State Statistical Bureau, Peking, 1959,
p. 69.
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 Approved For Release 2000/05/1.1 :CIA-RDP79-00928A000100050001-9
Price Weights
Except for the compendium of Shanghai prices published in
1958*, only fragmentary information an prices in China is avail-
able. .The scattered references, often to individual products
with inadequate specifications, have been gathered from a wide
variety of newspapers, journals, and other :sources. Most of
the individual prices used in this paper are for the year 1957
and are, for the most part, ex-factory or wholesale prices.
These price data have been weighted by estimates of the amounts
used in construction, by types and. grades, of each of the three
building materials in order to derive the respective price
weights.
* Academia Sinica, Shanghai Economic Research Institute and
Shanghai Academy of Social Science, Rconomic Research Institute..
Shang-hai Ch.ieh-fang Chien-hou Wu--chieh Tzu-lino Hui-piers 1921-
1957 (A Compilation of Reference Materials of Shanghai Commodity
i~rices Ee~c~:re and After Liber.al~ion) , Shanc~hai; ~;~1aTiiJ'1J:i ~-en~--~:nin
Ch? u~-p~.z~.-she, October 1958.
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 Approved For Release
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...,
~. ffi ,~,~R 1974
MEMORANDUM FOR: CRS/ADD Release
SUBJECT: R~l~eseet cif A DER,} ?4-'~, .Are It~.dex of
C~x~~tructi.+~~ Activf~~ ~n China,
.~.
Yv,6arch 1#74, Uncla.a~ffied, to Foreign
Gave rz~rnents
1. It is requested that the .attached copy of subject report be
forwarded as follows:
~ c?~FY
STATINTL
2. All OER responsibilities as defined in the DDI memorandum
of 13 August 1952, "Procedures for Dissemination of Finished
Intelligence to Foreign Governments, " as applicable to this report
have been fulfilled.
Chief, St/P/C/OER
req'~e=tati by
1 cls~ n
"' fi't' ';? `,;
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.y~.: a:
0 ? ~ ~S ~'~'n:~~ ~~i
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This publication is prepared for the use of U. S. Govern-
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publication are designed to meet the specific requirements
of governmental users. All inquiries concerning this docu-
ment from non-U. S. Government users are to be addressed
to:
Document Expediting (DOCEX) Project
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Washington, D.C. 20540
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 Approved For Release 2000/05/11 :CIA-RDP79-00928A000100050001-9
~~]EA~C~-~[ t~II~
An index of Construction.
Activity in China
A (ER) 74-9
March 1974
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 Approved For Release 2000/05/11 :CIA-RDP79-00928A000100050001-9
AN INDEX OF CONSTRUCTION ACTIVITY IN CHINA
An index of construction activity should employ
estimates of either all outputs of the construction sector
or all inputs to the construction sector (building
materials, labor, and transportation) to be compre-
hensive. In the case of the PRC, gaps and deficiencies in
the available data do not perm it either of these two types
of indexes. However, an index of the major building
material inputs can be calculated from the information
available on the Chinese economy. The resulting index is
believed to represent correctly the general trends in
activity of the organized construction sector.
The term construction as used in this publication
refers to activity that results in additions to productive
capacity under the economic plans of major political
entities. Rural construction, which is not included in the
index, is construction undertaken and funded by smaller
units in the countryside, primarily communes, produc-
tion brigades, production teams, and households. Rural
construction sometimes uses labor assigned on a regular-
ized basis from the production teams; the laborers receive
credit in the form of work points that are the basis of the
year-end distribution of the collectives income. In other
cases, unpaid ~~volunteer~~ labor is extracted from the
members of the economic unit involved. Rural construc-
tion consists mainly of repair and construction of farm
buildings, small-scale irrigation and water conservancy
works, and small industrial facilities of various types.
Households are especially important in contributing to
the building, expansion, and maintenance of dwelling
units, normally on an afterhours basis with the use of
local materials. Funds accumulated for rural construction
activity are small on aproject-by-project accounting but
large in the aggregate.
occurred at the highest level. The State Capital Construc-
tion Commission was abolished in 1961 and merged with
the State Planning Commission. In 1965 a second
reorganization took place when the construction com-
mission was reestablished and the Ministry of Construc-
tion was divided into the Ministry of Construction and
the Ministry of Construction Materials. In 1971-72 the
two were again combined asthe Ministry of Construction
to enhance coordination between construction planning
and material supplies availability.
The actual construction of large, modern industrial
plants is performed by the construction and design
bureaus of the various industrial ministries. Provincial
construction bureaus handle smaller projects. Railroad
engineering divisions of the Peoples Liberation Army
construct portions of Chinas expanding rail network,
while other sections are the responsibility of civilian
engineering bureaus.
Trends in Construction and Other
Economic Aggregates
The index in this publication is a weighted index of
the three major material inputs {cement, timber, and
steel) used in construction in 1949-73. (For a chronology
of construction activity, see Appendix A.) A major
problem is to determine what proportions of total
supplies are assigned to the construction sector. Relative
weights, another problem, are handled by the use of 1957
Chinese internal prices as weights. The use of 1957 prices
implies that the commodity mix of grades of cement,
quality of timber, and types of steel is constant for all
years. A further assumption is that changes in inventories
of these building materials are negligible. These assump-
tions, although perhaps distorting the index for certain
individual years, probably have little effect on the
long-term trends ind icated by the index.
Organization of the Construction
Industry
The responsibility for construction in the PRC is
diffused among numerous governmental organizations.
The lines of authority cross regional and functional
boundaries, and there is much overlapping of responsi-
bility. Reorganizations of the control structure have
The trend in construction closely resembles the trend
in industrial output (see the chart). Construction
increased when industry boomed, and it declined when
hard times hit the economy. During the 16 years
195$-73, construction has grown at an average annual
rate of almost 6?k. This rate is sl ightly lower than the rate
of growth of industrial output. From 1949 through 1957,
construction increased at a higher rate than industrial
output.
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 Approved For Release 2000/05/11 :CIA-RDP79-00928A000100050001-9
Indexes of GNP, Industrial Output
and Construction in China
Comparative Indexes, 1957=100
O
1949 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 1973
In a developing country, construction typically grows
faster than GNP. This trend holds true for China.
Economic reverses, attributable to the Great Leap
Forward (1958-60) and the Cultural Revolution
(1966-69), depressed all indexes. Construction and
industrial output were more volatile than GNP; both fell
further than GNP in bad times and grew faster in good
times.
Methodology Used in Estimating
the Building Materials Index
of Construction Activity
The following methodological statement discusses
the estimates of the physical volume of the building
materials used in construction, the price weights, and the
full index of building materials. A final section compares
the building materials index for 1950-58 with an
independent index of construction inputs for that period
and discusses the effect on the building materials index of
including data on glass and bricks. (For a discussion of
sources, see Appendix B.)
Estimates of cement production of both the modern
sector and the smal I plant sector are given in Table 1. The
Chinese have recently stated that 70%-80%of small plant
cement is ~~used for agricultural needs.~~ On the basis of
this claim, 75% of small plant production is assumed to
have been supplied to rural construction for each year,
1957-73. A time series for cement exports-which go
principally to Hong Kong-was compiled from a variety
of sources. Cement exports and cement supplied to rural
construction were deducted from total cement produc-
tion to derive a time series of cement supplied to the
construction sector. Cement cannot be stored easily for
long periods and is generally used in the vicinity of
2
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 Approved For Release 2000/05/11 :CIA-RDP79-00928A000100050001-9
China: Estimated Cement Supplied to Construction
Production
Used in Construction
Modern
Small
Used in
Rural Con-
Index
Totall
Plants
Plants
Million M
struction2
etric Tons
Exports
Volume3
(1957=100)
1949
0.7
0.7
....
....
....
0.7
11
1950
1.4
1.4
....
....
....
1.4
24
1951
2.5
2.5
....
....
....
2.5
43
1952
2.9
2.9
....
....
....
2.9
49
1953
3.9
3.9
....
....
0.3
3.6
62
1954
4.6
4.6
....
....
0.3
4.3
74
1955
4.5
4.5
....
....
0.4
4.1
71
1956
6.4
6.4
....
....
0.8
5.6
96
1957
7.9
6.9
1.0
0.8
1.3
5.8
100
1958
10.7
9.3
1.4
1.0
0.9
8.8
151
1959
12.3
10.6
1.7
1.3
0.8
10.2
175
1960
12.0
9.0
3.0
2.2
0.8
9.0
154
1961
7.9
6.0
1.9
1.4
1.0
5.5
94
1962
7.1
5.6
1.5
1.1
1.1
4.9
84
1963
9.4
6.9
2.4
1.8
0.9
6.6
114
1964
11.2
9.0
2.2
1.7
0.7
8.9
152
1965
15.2
11.2
4.0
3.0
1.0
11.2
194
1966
17.4
12.9
4.5
3.4
1.0
13.1
225
1967
14.6
11.0
3.7
2.7
0.5
11.4
196
1968
15.5
11.3
4.2
3.1
0.3
12.1
208
1969
19.1
13.0
6.1
4.5
0.3
14.2
245
1970
19.7
13.3
6.4
4.8
0.3
14.6
252
1971
23.0
13.8
9.2
6.9
0.6
15.5
267
1972
28.4
14.8
13.6
10.2
0.7
17.5
301
1973
30.8
15.4
15.4
11.6
1.0
18.3
_314
1. Because of rounding, components may not add to the totals shown.
2. Constituting 75% of small plant production. Derived from unrounded data.
3. Total production of cement minus cement used in rural construction and cement exports.
manufacture owing to its lowvalue-to-weight ratio. Thus
the timelag between production and use of cement is The time series for timber production is presented in
small for most years. Table 2.1 Timber imports from the USSR were added to
"Chinese Industrial Development: 1949-70," People's Republic US Government Printing Office, May 1972, p. 83.
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China: Estimated Timber Supplied to Construction
Used in Construction
Total
Index
Production
Imports
Supplyl
Volume2
(1957=100)
Million Cubic Meters
1949
5,8
....
5.8
1.7
16
1950
6.6
....
6.6
2.0
l9
1951
7.6
....
7.6
2.3
22
L952
11.,2
....
1.1.2
3.4
32
1953
17.5
....
1.7.5
6.2
58
1.954
22.2
....
22.2
7.0
66
x955
20.9
....
20.9
7.2
67
1956
20,8
....
20.8
1.1.4
107
1957
27.9
....
27.9
10.6
100
1958
35.0
....
35.0
20.6
193
1.959
41.2
....
41.2
20.6
193
1960
33.0
....
33.0
16.5
155
1961
27.0
0.1
27.1
13.6
127
1.962
29.0
0.2
29.2
14.6
137
1963
32.0
0.5
32.5
16.2
1.52
1.964
34.0
0.5
34.5
17.2
162
1965
36.0
1.5
37.5
18.8
176
1966
38.0
1.5
39.5
1.9.7
1.85
1967
30.0
0.1
30.1
15.0
141
1968
32.0
....
32.0
16.0
150
1.969
35.4
....
35.4
17.7
1.66
1970
40.0
....
40.0
20.0
188
1971
43.0
....
43.0
21.5
202
1972
46.4
....
46.4
23.2.
218
1.973
50.0
....
50.0
25.0
235
1. Because of rounding, components may not add to the totals shown.
2. Constituting 50% of total supply of timber for 1959-73; calculated at the rate of 77,000 cubic
meters per 100 million yuan of investment in capital construction for 1949-58.
production to derive estimatesof total supplies of timber supplied by Kang Chao2 and S.D. Richardson.3 Thus the
each year. Other imports and exports of timber have been estimates of timber used in construction each year,
negligible. Construction in the 1960s received about 1959-73, were derived as 50%of the total supply.
one-half of the timber supply, according to the figures
2. Kang Chao, The Construction Industry in Communist (:hina,
Aldine Publishing Co., Chicago,1968, p. 202.
3. S.D, Richardson, Forestry in Communist China, Johns
Hopkins University Press, Baltimore, l 966, p.164.
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Estimates of production of finished steel are given in
Table 3. Net imports were added to domestic production
to derive estimates of the total supply of finished steel
each year. The amount of steel used in construction in
1949-58 was calculated from statements in the Chinese
press. For the years after 1958, information of th is type is
not available. Some relatively stable relationship presum-
ably exists between the quantities of cement and steel
China: Estimated Finished Steel Supplied to Construction
Production
Used in Construction
Crude
Finished
Net
Total
Index
Steel
Steels
Millio
Imports
n Metric T
Supply2
ons
Volume3
(1957=100)
1949
0.16
0.12
....
0.12
0.06
3
1950
0.6
0.4
0.6
1.0
0.1
7
1951
0.9
0.7
0.6
1.3
0.2
14
1952
1.3
1.1
0.5
1.6
0.3
18
1953
1.8
1.5
0.9
2.4
0.8
44
1954
2.2
1.7
0.6
2.4
0.9
53
1955
2.8
2.2
0.8
3.0
1.1
61
1956
4.5
3.2
0.6
3.8
2.0
116
1957
5.4
4.0
0.4
4.4
1.7
100
1958
8.0
6.0
1.5
7.5
2.6
151
1959
10.0
7.5
0.6
8.1
3.1
175
1960
13.0
10.0
0.7
10.7
2.6
151
1961
8.0
6.0
0.1
6.1
1.6
91
1962
8.0
6.0
....
6.0
1.4
79
1963
9.0
7.0
0.2
7.2
1.9
107
1964
10.0
7.5
0.4
7.9
2.4
140
1965
11.0
8.0
0.6
8.6
3.0
174
1966
13.0
10.0
1.3
11.3
3.5
199
1967
10.0
7.5
1.6
9.1
3.0
170
1968
12.0
9.0
1.7
10.7
3.1
177
1969
15.0
11.0
1.7
12.6
3.6
204
1970
18.0
13.0
2.2
15.2
3.6
206
1971
21.0
15.8
2.1
17.8
3.7
213
1972
23.0
17.2
2.1
19.3
4.1
235
1973
25.0
18.8
2.5
21.3
4.2
241
Finished Steel
Used in Construc-
tion as a Percent
of Total Supply
1. For 1949-SS these data were derived from Chinese sources; for 1959-73, finished steel production was
estimated as being about three-quarters of crude steel production.
2. Because of rounding, components may not add to the totals shown.
3. Calculated for 1949-58 from Chinese statements; calculated for 1959-73 on the basis of an
estimated steel/cement ratio as explained in the text.
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used in construction. The ratio of steel to cement used in
construction, 1950-58, is presented in Table 4. The
results for 1950-58 were used as a guide in estimating
ratios for the remaining years of the series.
The price weights used for the three corrimodities
follow:
The relationship between steel and cement usr:cl in
construction was a generally increasing one to 195E and
dropped off somewhat in 1957-58. The ratio of 0.30 for
1957-58 is quite high, compared with the ratio for other
nations--the USSR: 0.19 in 1969-70; the United States:
0.14 for the 1950s and the 1960s; and Japan: 0.09 in
1970-71. The ratio in China was high because of the
predominance of steel-intensive construction such as
heavy industrial buildings and railroad lines.
In estimating the amount of steel used in construc-
tion since 1959, we have arbitrarily assumed that the
steel-to-cement ratio has declined at the rate of 0.005
points per year on the basis of changes in the direction of
the construction effort and the experience in other
countries--the steel-cement ratio of the USSR declined
from about 0.30 in 1955 to 0.19 in 1969-70. The amount
of steel used in construction is then calculated from these
ratios by using the estimates of cement used in
construction in Table 1 4
4. Alternative assumptions about the rate of decline iri the
steel-to-cement ratio would yield lower or higher estimates of
steel used in construction, depending on whether the rate of
decline was higher or lower than 0.005 points per yeaz. However,
the rate of decline would have to vary considerably from 0.005
points per year to yield substantially different results in the final
index. For example, the use of the 0.005 figure gives an index of
248 for 1973 (with a 1957 base), whereas the use of a 0.01 figure
would have given an index of 236 and the assumption of an
Cement: 70 Yuan per metric ton.
Timber: 122 Yuan per cubic meter.
Finished steel: 6$2 yuan per metric ton.
The Building Materials Index
of Construction Activity
The building materials index of construction activity
is given in Table 5. The amounts of each building material
used in construction were multiplied by their respective
prices to derive a value figure for each commodity. These
value figures were added together to derive the total value
of the three commodities for each year. An index was
then calculated by setting the value in 1957 equ;~l to 100.
Comparison with Kang Chaos Index
of Construction
The index for this publication is tested against an
index by Professor Kang Chao of the University of
California. Kang Chao presents an index of inputs to the
construction sector covering 1950-58. He use:. official
Chinese data on steel, timber, cement, glass plates, other
building materials, and labor. This index, converted to
1957=100 from its 1952 base, is given in Table 6. The two
indexes show the same general pattern.
unchanging steel-cement ratio would have given an index of 279.
For the lower estimate the steel-to-cement ratio was not allowed
to decline below 0.20.
As indicated in Table 3, this methodology indicates that the
share of total steel supplies used in construction has tended to
drop over the years since 1956-57. Such a trend is reasonable
because the residual steel supplies have been used primarily by the
machine building industry. Chinese claims, as well as estimates by
foreign observers, indicate that the machine building industry has
been expanding much faster than both construction and
industrial production as a whole. See, for example, Peking
Review, 2 November 1973, p. 22; Field, op. cit., pp. f~7-68, 80;
and Thomas G. Rawski, "Recent Trends in the Chinese
Economy," China Quarterly, no. 53, January-Mazch 1973,p. 10.
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China: The Building Materials Index of Construction Activity
Cement
Timber
Total
Finished Steel Value
$uilding
Materials
Million
Metric Tons
Million
Yuanl
Million Cu-
bic Meters
Million
Yuanl
Million
Metric Tons
Million Million
Yuanl Yuan2
Index
1957=100
1949
0.7
46
1.7
211
0.1
38
295
10
1950
1.4
99
2.0
243
0.1
82
423
15
1951
2.5
174
2.3
280
0.2
170
624
22
1952
2.9
200
3.4
410
0.3
215
825
28
1953
3.6
250
6.2
752
0.8
527
1,528
53
1954
4.3
301
7.0
852
0.9
627
1,780
61
1955
4.1
287
7.2
874
1.1
730
1,891
65
1956
5.6
392
11.4
1,390
2.0
1,374
3,155
109
1957
5.8
407
10.6
1,299
1.7
1,189
2,895
100
1958
8.8
612
20.6
2,508
2.6
1,790
4,911
170
1959
10.2
713
20.6
2,513
3.1
2,083
5,309
183
1960
9.0
626
16.5
2,014
2.6
1,800
4,441
153
1961
5.5
383
13.6
1,655
1.6
1,081
3,118
108
1962
4.9
340
14.6
1,783
1.4
945
3,067
106
1963
6.6
464
16.2
1,980
1.9
1,266
3,711
128
1964
8.9
620
17.2
2,103
2.4
1,660
4,383
151
1965
11.2
787
18.8
2,288
3.0
2,070
5,145
178
1966
13.1
915
19.7
2,406
3.5
2,361
5,682
196
1967
11.4
798
15.0
1,834
3.0
2,022
4,655
161
1968
12.1
845
16.0
1,952
3.1
2,099
4,895
169
1969
14.2
995
17.7
2,159
3.6
2,424
5,578
193
1970
14.6
1,024
20.0
2,440
3.6
2,444
5,907
204
1971
15.5
1,084
21.5
2,623
3.7
2,535
6,242
216
1972
17.5
1,223
23.2
2,830
4.1
2,799
6,852
237
1973
18.3
1,278
25.0
3,050
4.2
2,864
7,193
248
1. Derived from unrounded data.
2. Because of rounding, components may not add to the totals shown.
Other Building Materials: Glass and brick). This expanded index differs little from the
and Brick original index (see Table 7). This result suggests that the
inclusion of glass and bricks in the whole index would not
No time series are available on such inputs to appreciably alter the pattern of construction activity as
construction as plywood, pre-cast concrete, and plastics. set forth in this publication. Bricks (at 40 Yuan per 1,000
Data on glass and brick production from 1949 through bricks) constitute 17%-21?~ of the total valueof building
1960, however, are available. A new index was calculated materials in the construction sector. Production thus
including all five materials (cement, timber, steel, glass, would have amounted to an estimated 45 billion to 50
7
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China: Comparison of the Present Index
and Kang Chao's Index
Building Materials
Index of this Publication
Kang Chao's Index of
Inputs to Consrivetion
1950
IS
12
19.51
22
21
1952
28
34
1953
53
53
1954
61
67
1955
65
72
1956
l09
i12
1957
100
100
1958
170
]66
China: Effect on Inclusion of Glass and Brick
on the Construction Index
----- -_ ----- ---
Index of this Publication) Five-It
1957 = 100
em lndex2
1949
10
10
1950
15
14
1.951
22
19
].952
28
25
1953
.53
45
1954
61
55
1955
65
62
1956
109
99
1957
1.00
100
1958
l70
159
1959
l83
l72
1960
153
151
B. Rased on comment, timber, and steel used in construction
2. Haled on cement, timber, steel, glass, and brick used in construction.
billion bricks in 1973--a not unreasonable figure,
considering the production of 30 billion bricks reported
for 1960. Glass (at 1.29 yuan per square meter)
represents only about 1.5?/ of the total value of building
materials, so that 1973 production would have been
about 100 million square meters of flat glass. In 1960 the
productian of glass was 66.5 million square meters.
8
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APPENDIX A
CHRONOLOGY OF CONSTRUCTION ACTIVITY 1949-73
1949-57: Rehabilitation and the First Five-Year Plan
During the reconstruction phase, construction ac-
tivity was directed toward the rebuilding of the
war-damaged industrial and transportation base. Rail
lines were mended, damaged or idle factories were
returned to production, and a small amount of new plant
construction was initiated. With the adoption of the First
Five-Year Plan { 1953-57), industry was given top priority
over other types of construction. Soviet building
specifications were adopted, and Soviet technical assist-
ance was provided. The main results were an increase in
basic heavy industry and in the railroad network.
The Chinese felt during the late 1950s that a much
faster pace of development could be attained by adding
massive inputs of labor to the construction process. This
idea resulted in the Great Leap Forward, a period of
forced draft development in which large inputs of labor
were used in an attempt to overcome material limitations
and to speed industrialization. In construction, con-
tinued work on the core Soviet-aid plants was accom-
panied by a rapid-pace program of building thousands of
small iron furnaces, fertilizer plants, cement plants, and
machine shops. Severe material shortages quickly de-
veloped, and quality of output plummeted. Industrial
and construction problems were exacerbated by the
harvest shortfalls. The combination of industrial collapse,
severe food shortages, and the withdrawal of the Soviet
advisers in mid-1960 brought the Leap Forward to an
inglorious end.
The period of readjustment and recovery was
characterized by a return to orthodox planning, including
the shutting down of useless small plants. Construction
work was first concentrated on major projects that could
be finished quickly. Later, renewed investment was
undertaken on a selective basis by the central govern-
ment-featuring the chemical fertilizer, petroleum, and
electronics industrieso Vast military and related construc-
tion was initiated. China turned to the West as a primary
source of modern technology and began to purchase
substantial amounts of machinery and whole plants. A
central theme of this period was the higher investment
priority accorded to agriculture and industries supporting
agriculture.
The Cultural Revolution-in which Mao tried to
rekindle the revolutionary spirit and chasten the apolit-
ical bureaucracy-was a period mixed in its purposes and
effects. The political turmoil disrupted the urban sector
and led to material shortages and to delays in the national
construction schedule. Some of the hurry-up philos-
ophies of the Greap Leap Forward were reinstated,
though on a much more moderate scale. Construction
materials and funds were once more wasted on poorly
conceived small-scale projects. Local decisions on invest-
ment were not coordinated with raw material supply or
need for the output. The re-establishment of political
order in 1969 was necessary for construction programs to
be again pursued effectively. In general, the Cultural
Revolution had little effect on agricultural production
and only temporarily halted the upward trend of industry
and construction.
Once the Cultural Revolution had faded, work moved
forward rapidly on major projects in industry, transporta-
tion, and other sectors, and the small-plant program was
pushed on a fairly rational basis. Small cement plants
were built in great numbers, reaching 2,800 by 1973,
with output equaling the output of the modern cement
plants. Small fertilizer plants also were stressed, and their
output is claimed to be greater than the modern plants.
By 1973 the construction of small plants had once more
outpaced the availability of construction materials and
supporting inputs, such as fuels. Another re-examination
of priorities among small plants has been in process, with
the result that the level of small-plant construction has
been drifting downward during the past year.
At the start of 1974, construction activity in the PRC
reflects the revised investment priorities of late 1972 and
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1973, under which Peking is attempting to bolster
deficiencies in agricultural and industrial performance.
Construction activity now features the buildup of electric
power capacity, port and harbor improvements, capital
improvements in the raw materials industry (mining-, and
industrial projects supporting agriculture. The PRC in
1973 contracted with Japan, the United States, and
Western Europe for US $1.2 billion worth of industrial
plants-mainly chemical fertilizer and artificial fiber
plants-which will heavily color the construction scene in
the late 1970s.
For the next two to five years, construction activity
will feature industries producing chemical products, raw
materials, and electric power. This activity will include
the construction of the numerous foreign plants now
under contract. Construction in the mining industry will
give priority to opencut mining, a technology in which
i:he PRC has much to learn from the West. Construction
of major new facilities at international ports will parallel
the rapid expansion of foreign trade. The steel industry
will continue to have high priority in construction, with
the major emphasis on capacity to produce finished steel.
The petroleum industry has been speeding up its already
fast pace. Development during the next few years will
give top billing to oil pipelines and to the opening up of
offshore deposits in the shallow Pohai Gulf.
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APPENDIX B
SOURCES
The sources providing information for estimating the amounts used in construction
and the price weights for the three building materials are noted below.
Cement
Chien-chu Tsai-liao Kung-yeh, no. 5, Peking, 7 Mar 1964, p. 2.
China News Service, Canton, 6 Feb 1965.
Ibid., 22 Feb 1965.
Foreign Broadcast Information Service, Peoples Republic of China, ccc-2, 31 Dec 1964.
Ibid., b-10, 3 Jan 1972.
Ibid., b-1, 1 Dec 1972.
Ibid., b-12, 27 Dec 1973.
Jen-min Jih-pao, Peking, 3 May 1964, p. 1.
Ibid., 29 Nov 1971, p. 4.
U5 Congress, Joint Economic Committee, Peoples Republic of China: An Economic
Assessment, Washington, D. C., 1972. .
New China News Agency, various releases.
Peking Review, no. 2, 11 Jan 1974, p. 23.
BBC, Summary of World Broadcasts, FE/W707/A/13, 17 Jan 1973.
Ibid., FE/W241/B/28, 4 Dec 1963.
Surve of China Mainland Press, no. 2191, 1 Feb 1960, p. 8.
Ten Great Years Statistics of the Economic and Cultural Achievements of the Peoples
Republic of China, Peking, Foreign Languages Press, 1960.
Timber
In addition to the sources above, the following were used:
Kang Chao, The Construction Industry in Communist China, Aldine Publishing Co.,
Chicago, 1968.
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Chi-hua Ching-chi_ (Planned Economy), no. 11, 1957, p. 22.
S. D. Richardson, Forestry in Communist China, Johns Hopkins University Press,
Baltimore, 1966.
fn addition to the sources for cement and timber, the following were used:
Foreign Broadcast Information Service, Far East, BBB-6, 20 Oct 1959.
Jen-min Jih-pao, Peking, 12 Feb 1962, p. 4.
Chi-hua Chink chi (Planned Economy, no. 9, 1957, p. 13.
Yeh-chin Pao, no. 48, Peking, 4 Dec 1959, p. 37.
Wo-kuo Ti-i-ke Wu-Wien-chi-hua-shih-chi Ti Sheng-tsan Ho Hsiao-fei Kuan-hsi, State
Statistical Bureau, Peking, 1959, p. 69.
Except for the compendium of Shanghai prices published in 1958,* only
fragmentary information on prices in China is available. The scattered references, often
to individual products with inadequate specifications, have been gathered from a wide
variety of newspapers, journals, and other sources. Most of the individual prices used
in this publication are for 1957 and are, for the most part, ex-factory or wholesale
prices. These price data have been weighted by estimates of the amounts used in
construction, by type and grade, of each of the three building materials in order to
derive the respective price weights.
* Academia Sinica, Shanghai Economic Research Institute, and Shanghai Academy of Social
Science, Economic Research Institute, Shang-hai Chieh-fang Chien-hou Wu-chieh Tzu-liao Hui-pien
1921-1957 (A Compliation of Reference Materials of Shanghai Commodity Prices Before and After
Liberation), Shanghai Jen-min Ch'u-pan-she, Shanghai, October 1958.
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