CHINA'S INTERNATIONAL ECONOMIC RELATIONS

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP83B00551R000200050011-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 52
• Document Creation Date: December 20, 2016
• Document Release Date: August 15, 2007
• Sequence Number: 11
• Publication Date: October 28, 1981
• Content Type: MEMO

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MEMORANDUM
Central Intelligence Agency
National Foreign Assessment Center
28 October 1981
China's International Economic Relations
In the five years since the death of Mao Zedong China's new
leaders have moved the country unrelentingly towards greater
participation in the world's economy. Beijing has dropped its
ideological aversion to foreign debt, has encouraged foreign
investment in the domestic economy, established diplomatic
relations with the United States, joined the International
Monetary Fund and World Bank, decentralized its trade
organizations to promote direct foreign contacts at the
enterprise level, and sent thousands of students abroad for a
Western education.
Dealing With Deficits
In this improved atmosphere China's foreign trade has grown
rapidly. Since 1977, China has maintained an average annual
growth rate of nearly 35 percent for exports. This was done by
diverting marginal amounts of output away from domestic
consumption and by penetrating established Western markets
through competitive pricing policies (see Figure 1). In real
terms exports have increased 20 to 25 percent annually over the
same period. Despite the rapid increase in trade, China's
exports still amount to only a small fraction of domestic output
or of world trade.
In general, Chinese imports have increased concomitantly
(see Figure 2). On two occasions, however, the Chinese have
incurred significant trade deficits--during the winters of 1978-
79 and 1980-81 (see Figure 3). Each time, the Chinese turned to
foreign sources for balance of payments support.
China's trade balance, which had been running in surplus
though the first 3 quarters of 1978, turned into a $400 million
deficit in the fourth quarter (measured on an f.o.b. basis), then
plunged to a $700 million deficit in the first quarter of 1979--
the largest quarterly deficit the Chinese had ever experienced.
EA M 81-10009
This memorandum was prepared by of the China External
Division of the Office of East Asian Affairs, National Foreign
Assessment Center in response to a Treasury Department request.
Questions and comments are welcome and may be addressed to the
author
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Figure 1
China: Exports, f.o.b.
Billion US $
7
4
3
I Ili!!! i I i ii I i i i I
Figure 2
China: Imports, f.o.b.
Billion US $
7
6
Total
5
4
Less
Developed
3
Countries
Developed
Countries
2
1
Communist
Countries
III IV I II III IV I II III IV I Ilillivi II III iv i IIIIIlII II
1975 76 77 78 79 80 81
585583 10-81
^4'
I
Total
Developed
Countries
Less
Developed
Countries
Communist
Countries
III IV I II IIIIV I II III IV I II i iiI iv I III iv I II
1975 76 77 78 79 80 81
585584 10-81
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Figure 3
China: Trade Balance'
Billion US $
With Non-Communist Countries
1.2
II I I i liii liii I I
III IV I II III IV I II III IV I II in iv I II III IV I II III IV I II
1975 76 77 78 79 80 81
Billion US $
With Communist Countries
0.2
?0.2
I I I I I I I I I I I I I I I j 1 1 I I I I I I
III IV I II III IV I II III IV I II In IV I 11111 IV I II III IV I II
1975 76 77 78 79 80 81
a f.o.b., f.o.b.
585585 10-81
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In addition, the Chinese had contracted to make downpayments of
approximately $600 million for plants ordered in the second half
of 1978. Downpayments on the $7 billion in contracts had left
Beijing dangerously low on foreign exchange. Reserves had fallen
to about $1.5 billion by the beginning of 1979.
In early 1979, the Chinese arranged commercial credit lines
amounting to nearly $10 billion, mostly-with Japanese banks.
Moreover, in anticipation of making major capital purchases, the
Chinese had amassed by mid-1979 over $17 billion worth of pledges
for officially-supported export credits from France ($7.3
billion), the United Kingdom ($5 billion), Japan ($1.8 billion),
Canada ($1.7 billion) and Italy ($1.0 billion), with smaller
amounts from Belgium, Sweden, and Australia. Ironically, the
Chinese have not used most of these credits. Between May and
August 1979, LIBOR rates jumped from 10 1/2 percent to 17
percent, making these funds too expensive for the fiscally
conservative Chinese. Moreover, the readjustment of the economy
dictated a massive cutback in capital expenditures, leaving
little need for these loans.
China's balance of payments position improved dramatically
over the next year as a result of excellent export growth. In
fourth quarter 1980, however, a surge in imports resulted in
another bout of trade deficits. In November China drew its
reserve tranche of $280 million from the International Monetary
Fund, the first drawing since China's entrance into the IMF in
May 1980. The trade imbalance continued into the first quarter
of 1981, and by the end of March Beijing had withdrawn a total of
$1.1 billion, exhausting its first credit tranche at the IMF.
China also drew heavily on short-term foreign commercial loans
during this period. By yearend 1980, total debt outstanding may
have surpassed the $3.4 billion mark predicted by the Chinese in
September 1980.
Plant Contracts--Killed then Revived
Reacting to a rapidly deteriorating foreign exchange
situation as well as to a general rethinking of China's
development strategy, in February 1979 the Ministry of Finance
sent notice to 20 Japanese firms that contracts they had signed
with China's National Technical Import Corporation had failed to
obtain Bank of China approval. As a result, the contracts--
valued at $2.6 billion--were suspended while China reexamined the
projects and the financial commitments associated with them.
Although the contracts were reinstated immediately after
commercial Japanese banks put together a long-promised financial
package, the Chinese never utilized any of these funds but
continued to accept delivery of the equipment on a cash payment
basis.
Unlike the plant contract suspensions of February 1979, the
Chinese decision to cancel nearly $2.0 billion worth of contracts
for the Baoshan steel mill and for four petrochemical plant
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complexes in February 1981 probably was motivated more by
internal economic considerations than by external financial
constraints. Domestic investment was badly overextended, partly
because of the local expenditures needed to construct plants
purchased overseas. Moreover, it had become apparent that energy
supplies for the plants would not be available. As in 1979, the
Chinese told the Japanese that in order to complete the plant
deals China would need low interest loans. Unlike the earlier
loans, however, part of the new financing request was to cover
the local costs of the projects. In effect, the Chinese wanted
to finance their domestic budget deficits with foreign loans.
If the plant cancellations were precipitated by perceived
balance of payments problems, the Chinese reaction was too
draconian. China's hard-currency reserves were adequate, with
earnings more than sufficient to make scheduled payments for the
plants. By the Bank of China's own account, China's foreign
exchange reserves jumped from $2.5 billion at the end of March to
$3.8 billion at the end of June. Even after canceling the
plants, the Chinese continued to accept delivery of equipment,
paying for each shipment in cash. As a result of excellent
export growth and a cutback in agricultural imports, China's
trade balance improved dramatically in second quarter 1981--from
a $400 million first-quarter deficit to a $1 billion hard-
currency surplus.
New Directions in Trade Policy
Traditionally, Chinese exports have been spread over a wide
range of commodities and markets. Adverse foreign economic
situations would have minimal impact on China's domestic economic
plans, because exports of any one commodity accounted for only a
small portion of domestic production.
In 1970 agricultural commodities accounted for more than
half of China's exports. This proportion fell steadily during
the decade, and in 1979, less than one-third of total earnings
came from the agricultural sector (see Figure 4.) China became a
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Figure ,e4
China: Commodity Composition of Trade, 1979
Percent
Exports: By Sector of Origin
El Manufacturing 56
CI Agriculture 29
LI Extractive 15
Imports: By End Use
Cl Industrial Supplies 58
CI Capital Goods 27
CI Foodstuffs 13
0 Consumer Durables 2
Coal 1
Crude Minerals & Metals 2
Crude Oil 12
Other 6
Oilseeds 2
Grain 2
Crude Animal Materials 3
Textile Fibers 4
Fruit & Vegetables 5
Animals, Meat, & Fish 6
Other 2
Sugar 1
Grain 10
Other 1
Electric Machinery 4
Transport Equipment 9
Nonelectric Machinery 13
Textile Yarn & Fabric 16
Clothing & Footwear 9
Chemicals 6
Metals & Metal Products 5
Petroleum Products 4
Machinery & Equipment 3
Other 12
Consumer Durables 2
Iron & Steel 23
Chemicals 10
Textile Fibers 8
Nonferrous Metals 3
Rubber 2
Textile Fabrics 2
Other 9
585586 10-81
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net oil exporter for
the first time in 1973, and
by 1979
extractive exports accounted for nearly 15 percent of total
revenues. Exports of manufactures--led by textiles, clothing,
and footwear--have made the greatest gains and now account for
over half of export revenues. Despite these shifts, China is
still a net exporter of agricultural goods and
a net importer of
manufactures.
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Fundamental Chinese attitudes have been changing with
respect to the role of trade in a planned economy.. Exports no
Longer are seen purely as a means of paying for imports; they
also have become a leading force for upgrading China's domestic
industry. By prodding sleepy domestic industries to compete for
foreign exchange in Western markets, ?the leadership is attempting
to improve the quality of goods produced for the domestic market
as well. The Chinese now recognize that in order to maximize
their gains from trade, they must specialize along lines of
comparative advantage in labor-intensive industries. It is no
longer enough to export domestic surpluses. By diverting
investment funds from heavy to light industry the Chinese expect
to reap a larger return on investment, and in much less time.
Beijing's attitude with respect to the role of imports also
is changing. Until the policy of "readjustment" was announced in
December 1978, imports basically were used to overcome
bottlenecks in the domestic economy and were concentrated in
industrial supplies and other goods that were critical to the
needs of the state (see Figure 4). Beijing followed a policy of
import substitution: Imports of capital goods were aimed at
eventually eliminating the need for imports of fertilizer,
chemicals, steel, and nonferrous metals. Under the
"readjustment" policy, import priorities have shifted toward
satisfyin! the needs of the people and towards expanding export
earnings.
In 1980 China's readjustment policies began to have a major
impact on the commodity composition of imports, and hence, on the
direction of trade. Deliveries of complete industrial plants
continued at a high pace. New orders, however, fell sharply.
Steel imports also declined. On the other hand, Beijing's
emphasis on improving the Chinese standard of living, boosting
export earnings, and channeling investment funds into light
industry has led to much larger imports of cotton and synthetic
fibers, fertilizers, pesticides and insecticides, plastics and
paper products, as well as increased purchases of grain and
consumer goods.
The net result of these changes has been a shift in the
direction of Chinese purchases (see Figure 5). The United States
and Hong Kong have been the major beneficiaries, whereas West
European countries have lost the most. Japan, by virtue of its
close geographic and cultural proximity as well as its greater
experience and flexibility in trading with China, so far appears
to have broken even: Japan's dominant share of China's trade has
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Figure 5
China: Geographic Distribution of Trade, 1980
629610 5-81
Trade Region
Turnover
Million US $
I Japan 9,247.3 VI Latin America(including Cuba) 1,531.6 XI Far Eastern Communist Countries 595.8
II Southeast Asia (including Hong Kong and Macau) 8,402.3 VII Middle East 1,441.2 XII USSR 486.9
III United States and Canada 5,684.7 VIII Sub-Saharan Africa 1,376.4 XIII North Africa 385.5
IV Western Europe 5,574.0 IX Australia and New Zealand 1,185.8
V Eastern Europe (including Albania and Yugoslavia) 2,687.7 X South Asia 606.1
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changed little in
the last
five
years. The Communist
countries
have fared the worst; last
year
their share of the total slipped
to 10 percent, the lowest
ever.
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Multilateral Ties
China has substantially expanded its involvement with
international economic institutions during the past two years.
Since joining the International Monetary Fund (IMF) and World
Bank in April and May of 1980 respectively, China has tapped both
organizations as part of its effort to obtain as much subsidized,
long-term, low-interest money as is available. In June, Beijing
received a conditional commitment for its first World Bank loan--
$200 million to upgrade its technical education system. Since
last November, China has made $1.1 billion in drawings from the
IMF. In a significant departure from its past policy of self-
reliance, in December of 1980 Beijing made its first request for
international disaster relief assistance through the United
Nations. A United Nations team that visited the flooded areas of
Hubei province and the drought-stricken portions of Hebei
province recommended that China receive approximately $700
million worth of food, seed, and reclamation aid. However, given
the meager international response?amounting to less than 2
percent of the requested funds--and leadership sensitivities
toward the subject, Beijing may think twice before seeking such
aid again. Claiming lack of familiarity with the benefits of
membership, Beijing is still reluctant to join the General
Agreement on Tariffs and Trade (GATT). To rectify this situation
Chinese representatives have attended several GATT meetings and
have enrolled an official in 'a four-month GATT training course.
According to one senior Chinese diplomat, China probably will not
make a decision on GATT membership before late 1982.
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China remains committed to the policy of opening its economy
to foreign investment and is currently taking steps to make the
terms more precise and attractive so as to ease investor
uncertainty. The equity joint venture program offers China an
opportunity to obtain considerable foreign technological and
management expertise without the financial risk associated with
debt financing. Still, after two years, the program has failed
to attract many investors, primarily because of Beijing's
slowness in developing a legal framework. To date, only 23
equity joint ventures with a total capital value of about $200
million have been established within China. Many of these are
with Hong Kong Chinese businessmen. Beijing is still formulating
detailed regulations to supplement the original 1979 joint
venture law which most investors considered to be too vague.
Beijing expects to promulgate these new regulations by the end of
1981. China also plans to offer over 100 potential joint
ventures for detailed negotiation with foreign investors at a
1982 conference to be co-sponsored by the United Nations.
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China has established four special economic zones located in
Fujian Province and near Hong Kong and Macao in Guangdong.
Beijing offers foreign investors the opportunity to set up joint
ventures or even wholly foreign-owned and foreign-managed
enterprises within the zones at concessional land, labor, and tax
rates. As in other parts of China, compensation trade has become
an important form of commerce in the zones. Under compensation
trade, foreign investors typically provide China with a
combination of equipment, technology, or raw materials. In turn,
the Chinese either return the finished product to the foreign
partner after processing or compensate the supplier with either
cash or barter goods. At present, insufficient infrastructure
development has combined with problems in labor productivity to
cause Beijing to take steps to stimulate investor interest in the
zones. In July, a State Council-sponsored conference on the
zones proposed the relaxation of visa and duty regulations as
well as greater investor control over labor matters. Premier
Zhao Ziyang underscored Beijing's committment to solving the
zone's problems by making a three-day inspection tour in August
to two of the zones.
Although the new regulations governing equity joint ventures
and the special economic zones probably will help clarify several
legal questions, the success of both programs remains somewhat in
doubt. Even with a more rational legal and commercial structure,
Beijing must still overcome its inexperience and develop such
intangibles as credibility and dependability in its relationships
with foreign entreoeneurs before foreign investment programs will
mushroom.
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TABLE 1
rhinn: Pxports and Imports
Million US
Exports
f.o.b.
II
III
IV
YEAR
1970
505.0
483.0
472.9
698.7
2.159.8
1971
560.7
548.9
576.6
849.4
2.535.6
1972
732.5
762.1
792.5
952.3
3.239.4
1973
937.7
1,184.3
1,395.4
1,594.2
5.111.4
1974
1,504.1
1,734.0
1,626.0
1,900.1
6,764.0
1975
1,556.3
1,704.6
1,744.3
2,126.2
7.131.3
1976
1,786.3
1,564.6
1,733.5
2.154.8
7,269.4
1977
1,920.7
1,864.6
1,945.1
2,442.0
8,172.5
1978
2,194.2
2,333.5
2,561.1
3,081.3
10.170.0
1979
2,748.8
3,153.0
3,506.9
4,363.9
13,772.6
1980
4,129.5
4,690.5
4,998.9
5,789.5
19.608.3
1981
5,305.7
5,810.9
5,954.1
.0
.0
Imports
f.o.b.
1970
494.7
591.2
496.9
463.5
2,046.3
1971
455.9
525.4
572.5
590.9
2,144.7
1972
567.3
602.1
557.8
869.1
2,595.8
1973
878.7
1,039.5
1,222.4
1,432.8
4,573.4
1974
1,530.0
1,686.2
1,856.7
1,657.5
6.730.2
1975
1,666.9
1,641.6
1,774.1
1,743.3
6.826.0
1976
1,852.2
1,625.0
1,158.5
929.5
5,565.2
1977
1,237.0
1,412.6
1,911.4
2.053.4
6,614.5
1978
1,921.4
2,408.8
2,529.5
3,491.0
10.350,6
1979
3,488.8
3,513.2
3,389.4
3,991.5
14,382.8
1980
4,107.4
4,220.3
4.953.7
6,090.3
19.367.5
1981
5,662.6
4,568.0
5,217.2
.0
.0
Imports
c.i.f.
1970
536.5
639.0
537.5
500.9
2,214.0
1971
491.9
567.9
617,.2
637.3
2,314.3
1972
613.6
652.6
603.8
941.8
2,811.4
1973
953.8
1,129.1
1,328.2
1,554.4
4,965.6
1974
1,664.8
1,827.5
2,012.4
1,786.4
7,291.0
1975
1,800.5
1,781.2
1,919.4
1.894.0
7,395.3
1976
2,002.0
1,767.7
1,252.4
997.4
6.019.6
1977
1.',328.1
1,524.4
2,062.9
2,220.6
7.136.1
1978
2,087.6
2,609.1
2,741.4
3,779.1
11,217.2
1979
3.785.6
3,819.5
3,690.1
4,321.9
15,617.0
1980
4,448.6
4,547.0
5,353.2
6,549.2
20,893.4
1981
6,095.9
4,908.3
5,605.9
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TABLE 2
CHINA:
EXPORTS,
FOB. BY
AREA AND COUNTRY
a/
Million US $
II
1979
III
IV
I
1980
II III
IV
1981
I II
1978
ANNUAL
1979 1980
WORLD
3,153.0
3,506.9
4,363.9
4,129.5
4,690.5
4,998.9
5,789.5
5,305.7
5,810.9
10,170.0
13,772.6
19.608.3
NON-COMMUNIST COUNTRIES
2,772.5
3,086.2
3,752.4
3,725.0
4,237.2
4,548.4
5,135.5
4,778.2
5.269.1
8.523.4
12,017.5
17,646.2
DEVELOPED COUNTRIES
1,297.5
1,499.3
1,696.7
1,769.9
2,032.4
2,133.3
2,328.0
2,218.9
2,441.5
3,776.1
5.642.6
8.263.6
EAST ASIA AND PACIFIC
717.1
830.3
847.1
899.0
1,125.2
1,132.2
1,266.2
1,120.8
1,333.2
2,107.1
2,993.2
4,422.5
Australia
38.6
39.7
37.9
75.7
51.0
50.7
66.8
74'1.4
123.7
139.5
166.3
244.1
Japan
671.6
780.3
798.0
812.1
1,064.6
1,071.8
1,190.2
1,041.2
1.202.2
1,947.5
2,793.3
4,138.7
NORTH AMERICA
179.8
208.7
212.5
239.9
288.8
318.4
340.6
412.1
533.6
406.5
73.7.0
1,187.7
Canada
35.3
42.2
30.6
35.5
39.0
29.3
28.4
36.4
51.1
82.8
142.8
132.2
United States
144.5
166.5
181.8
204.4
249.8
289.1
312.3
375.7
482.5
323.6
594.2
1,055.5
WESTERN EUROPE
400.6
460.3
637.1
631.0
618.4
682.8
721.2
686.0
574.7
1.262.5
1,912.4
2,553.4
Belgium
13.5
15.0
26.0
32.5
43.9
40.5
48.2
40.7
25.1
39.1
57.0
165.1
Fiance
60.4
69.0
94.3
94.2
107.4
100.7
104.2
129.0
90.8
196.3
284.3
405,4
West Germany
102.3
115.7
153.7
168.6
159.3
190.2
184.5
192.9
144.4
318.7
464.2
702.6
Italy
69.0
79.3
137.6
95.6
84.1
92.3
107.9
92.6
84.7
174.1
344.3
379.8
.Netherlands
32.8
34.3
42.0
43.2
47.2
67.8
78.9
57.4
51.5
109.1
115.0
237.1
Spain
22.6
30.8
34.7
26.3
25.6
22.5
28.1
20.5
23.0
59.4
115.3
102.5
Sweden
14.8
17.0
20.9
24.9
21.0
25.7
21.5
23.8
17.3
48.4
68.4
93.0
Switzerland
10.0
11.7
14.9
15.1
15.4
17.7
18.6
15.6
15.9
43.5
47.5
65.8
'United Kingdom
49.7
57.6
70,3
84.8
66.7
78.3
86.7
69.9
76.4
185.7
255.0
316.5
LESS DEVELOPED COUNTRIES.
1,475.0
1,586.9
2,055.8
1,955.1
2,204.8
2,415.0
2,807.5
2,559.3
2,827.6
4,747.3
6,374.9
9,382.5
SOUTHEAST ASIA
981.9
1,079.8
1.362.2
1,281.7
1.491.4
1,627.3
1,875.1
1,678.0
1,869.7
3,197,3
4,271.2
6.275,6
Hong Kong
693.3
770.5
960.0
895.1
1,054.9
1,141.9
1,308.9
1,148.0
1,313.1
2,249.4
3,020.8
4,400.8
Indonesia
33.3
37.3
34.3
39.2
36.6
48.1
63.9
58.6
64.0
116.2
125.3
187.8
Malaysia
43.8
46.3
72.6
60.8
51.3
65.4
63.9
61.6
67.3
210.6
212.0
241.4
Philippines
27.2
18.1
52.8
27.9
39.5
74:2
68.9
60.5
75.0
112.2
121.1
210.5
Singapore
98.1
101.9
106.1
140.7
131.1
147.7
179.2
174.9
159.6
325.8
391.6
598.8
Thailand
44.7
63.2
81.4
66.6
119.0
85.6
125.6
115.1
125.8
79.9
230.4
395.8
SOUTH ASIA
77.3
52.9
76.9
73.3
80.6
94.3
93.4
100.9
103.7
158.2
252.8
341.7
Bonnladesh
20.9
14.9
17.2
17.6
17.8
23.4
38.0
34.9
38.1
42.4
55.1
95.8
Pakistan
31.8
25.9
40.0
33.4
41.5
47.6
37.3
42.1
45.0
79.4
117.4
159.8
Sri Lanka
20.9
7.9
14.3
14.7
12.7
14.1
7.4
14.2
10.0
27.6
53.6
48.8
MIDDLE EAST
169.8
200.9
246.0
237.8
256.8
274.9
314.4
288.2
315.3
564.9
752.3
1,083.9
I; an
19.0
21.2
26.5
25.6
29.0
31.0
35.5
32.6
35.6
59.9
83.3
121.3
Kuwait
27.2
31.9
43.1
41.9
47.5
50.7
58.0
53.1
58.1
91.5
125.3
198.0
Saudi Arabia
28.3
38.9
42.7
44.1
52.1
55.5
63.6
58.3
63.7
90.3
127.9
215.3
Syria
14.0
5.9
17.3
12.0
8.5
9.1
10.4
9.5
10.4
47.4
47.2
40.0
United Arab Emirates
22.2
25.0
33.5
30.9
29.1
31.1
35.6
32.7
35.6
73.8
105.7
125.8
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
Approved ForRelease2007/08/15 : CIA-RDP83B00551R000200050011-1
TABLE 2
--rnNITNurn
CHINA: EXPORTS, FOB, BY AREA AND COUNTRY a/
Million US $
1979 1980 1981 ANNUAL
II III IV I II III IV I II 1978 1979 1980
NORTH AFRICA 41.7 39.0 53.3 58.6 66.6 71.1 81.3 84.2 92.0 167.4 173.8 277.5
Egypt 6.8 7.6 9.5 13.8 15.7 16.7 19.1 17.5 19.1 52.0 29.9 65.2
Libya 16.1 18.0 22.3 21.7 24.6 26.3 30.1 27.6 30.1 50.7 70.5 102.6
SUR-SAHARA AFRICA 144.1 155.9 190.1 189.4 208.6 222.1 256.2 234.2 256.0 533.4 618.8 876.6
Nigeria 59.4 66.2 82.5 80.0 90.7 96.7 110.7 101.5 111.0 186.8 259.9 378 3
Sudan 10.1 11.3 14.1 13.7 15.5 16.5 18.9 17.4 19.0 46.6 44.4 64.7
Tanzania 7.9 8.8 10.9 10.6 12.0 12.8 14.6 13.4 14.7 35.4 34.4 50.0
Zambia 1.9 .0 .0 .0 .0 .0 .0 .0 .0 7.7 2.3 .1
LATIN AMERICA 60.1 58.4 127.3 114.3 100.7 125..3 187.1 173.8 191.0 126.0 286.1 527.2
Argentina 2.1 2.5 4.9 5.2 7.7 9.2 10.5 9.7 10.6 2.4 10.6 32,7
Brazil 13.3 7.2 61.3 54.9 29.1 52.6 102.7 94.2 103.0 4.3 85.9 239.4
Chile 6.5 5.5 7.5 5.6 9.3 6.6 7.4 6.8 7.4 10.7 23.9 29.0
Mexico 9.0 10.1 12.5 13.4 15.2 16.2 18.5 16.9 18.5 26.8 39.5 63.1
Peru 3.2 3.6 4.4 .4.3 4.9 5.2 6.0 5.5 6.0 10.0 14.0 20.3
COMMUNIST COUNTRIES 380.5 420.7 611.5 404.6 453.3 450.5 654.0 527.5 541.8 1,646.6 1.755.1 1,962.1
USSR 35.9 40.4 121.4 49.1 47.6 41.7 91.5 35.7 26.3 257.3 '240.7 229.9
EASTERN EUROPE 246.1 276.2 360.5 271.6 310.4 307.1 446.3 385.3 399.0 981.8 1 096.0 1.335.3
Ciechoslovakia 31.2 34.9 43.5 42.2 47.8 51.0 58.4 53.5 58.5 136.0 136.9 199.4
East Germany 43.4 48.4 60.3 58.6 66.4 70.8 81.0 74.3 81.2 138.0 190.0 276.7
HI.i!,priry 11.7 14.0 21.2 12.4 11.2 14.7 20.8 10.2 11.2 65.8 53.2 S9.2
Poland... ......... 19.3 24.6 46.5 27.2 37.0 20.2 45.0 27.6 8,0 91.3 104.8 129.3
Romania 119.6 133.6 166.3 109.0 123.9 132.2 220.0 201.7 220.5 415.3 524 0 595.0
Yucloslavia 12.0 10.7 10.3 14.4 15.3 8.9 10.3 8.1 8.8 70.2 48.0 49.0
OTHER b/ 98.5 104.1 129.6 83.9 95.3 101.7 116.2 106.5 116.5 407.5 418.4 306.9
PERCENT OF ESTIMATE OBTAINED FROM TRADE PARTNER DATA: c/
WORLD 93.87 93.73 93.68 87.98 87.73 86.09 85.99 71.43 65.14 98.79 93.82 86.135
DEVELOPED COUNTRIES 100.00 100.00 100.00 100.00 100.00 100.00 100.00 98.66 95.22 100.00 100.00 100.00
LESS DEVELOPED COUNTRIES 87.03 86.28 86.71 79.90 79.21 76.37 76.20 59.47 50.44 97.54 86.78 77.72
COMMUNIST COUNTRIES 99.50 99.49 99.56 74.43 74.15 72.26 78.13 14.96 6.34 99.63 99.51 75.10
a/ Country listings for any given area are not exhaustive: only major trade partners are presented. Country data for all
quarters to the right of an asterisk are extrapolated and are subject to change. See appendix A, China: International Trade
Quarterly Review, First Quarter 1979 for further details.
h/ Kampuchea. Cuba. Mongolian Republic, Laos, North Korea, and Vietnam.
c/ Includes quarterly data that have been interpolated from annual trade partner data.
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
TABLE 3
CHINA:
IMPORTS,
FOB. BY
AREA AND COUNTRY a/
Milli on
US I;
1979
1980
1981
ANNUAL
II
III
IV
I
II
III
IV
I II
1978
1979
1980
WORLD
3,513.2
3,389.4
3,991.5
4,107.4
4,220.3
4,953.7
6,090.3
5,662.6
4,568.0
10,350.6
14.382.8
19,367.5
NON-COMMUNIST COUNTRIES
3,085.02,942.1
3,382.3
3,674.0
3,802.6
4,478.2
5,454.7
5,174.4
4,198.9
8,782.2
12,440.2
17.405.4
DEVELOPED COUNTRIES
2,573.6
2,387.1
2,750.6
2,785.52,983.8
3.536.74,203.0
3,834.0
3,135.9
7,267.7
10,158.0
13,508.3
EAST ASIA AND PACIFIC
1,219.7
958.6
1,205.5
1,132.0
1,458.0
1,475.1
2.000.5
1,690.7
1,597.2
3,622.5
4,539.1
6.065.6
Australia
166.1
191.6
287.4
226.7
236.0
234.2
99.2
267.6
232.6
483.5
776.1
796.1
Japan
1,035.6
755.6
881.6
859.9
1,199.2
1,212.8
1,836.7
1,430.8
1.345.4
3,073.9
3.673.5
5,108.6
NORTH AMERICA
454.2
517.9
735.1
896.5
966.4
1,289.8
1,344.3
1,385.5
886.7
1,306.7
2,230.5
4,497,0
Canada
139.8
141.3
97.6
121.7
252.2
203.8
164.3
201.9
207.8
442.1
56.7
742.0
United StatPs
314.4
376.6
637.5
774.8
714.2
1,086.0
1,180.0
1,183.6
678.9
864.6
1,723.8
3.755 0
WESTERN EUROPE
899.8
910.6
810.0
757.0
559.3
771.8
858.2
757.8
652.0
2,328.5
3.338.4
2.?46 3
Ec:?lgium
44.9
13.2
17.4
16.3
28.0
26.4
33.6
20.5
38.2
205.4
129.4
104.1
Fiati,:n
72.4
85.1
84.0
54.2
66.5
83.7
98.6
70.8
86.8
199.2
319.2
203 0
titnst Germany
389.2
410.1
371.2
420.8
185.5
272.8
266.3
278.9
264.7
995.2
1.4E12.5
1 149 4
,It:ily?
87.7
63.6
61.8
38.7
52.0
76.9
86.8
116.1
57.9
188.4
278.3
254.4
Netherlands
37.3
26.8
36.1
20.2
25.5
47.1
54.3
32.3
18.6
135.0
159,4
147.1
Spain
42.1
30.2
21.4
5.6
10.5
10.4
37.0
17.3
9.2
66.3
127.8
61,5
Sw'"n
27.7
26.6
31.6
22.1
6.8
33.9
19.9
27.2
15.4
83.4
113.5
82.7
Switzerland
23.4
27.5
43.2
32.6
27.6
30.2
48.9
25.9
31.3
94.6
118.9
129.3
United Kingdom
131.5
177.6
90.0
118.8
93.5
90.7
90.9
119.7
96.6
175.6
453.0
293.9
LESS DEVELOPED COUNTRIES.
511.4
555.0
631.8
888.6
818.8
941.5
1,251.7
1,340.4
1,063.0
1.514.5
2,212.1
3,896.5
SOUTHEAST ASIA
173.9
241.6
302.7
389.1
430.8
499.8
636.2
611.2
606.2
387.1
832.7
1,956.0
Hon 9 K^nn
77.5
94.6
165.9
195.1
278.8
323.1
452.2
470.8
481.2
62.9
232.2
4,249.3
Indhnin
.0
.0
.0
.0
.1
.0
.0
.o
.o
.0
.0
Malavia
19.4
57.2
44.3
39.2
59.8
63.5
54.4
30.2
24.4
110.2
181.9
217.3
Philippines
15.6
20.5
10.2
9.8
7.1
16.3
11.5'
40.1
37.8
47.4
51.2
'14.8
Sinoaperb
45.8
36.8
54.1
93.8
58.4
61.8
93.4
47.1
44.4
57.9
1C9.9
207 5
Thailand
12.9
16.2
26.9
48.6
25.6
25.6
23.8
22.2
17.9
76.8
77.0
23.71
SOUTH ASIA
16.4
43.8
37.3
121.8
64.9
51.2
129.7
275.7
90.5
132.3
123.2
367.6
Bangladesh
3.6
3.2
5.0
6.9
8.4
7.0
8.8
6.6
5.3
24.4
19.4
21.1
Pakistan
3.3
7.8
10.6
94.5
32.7
9.0
85.0
226.9
57.4
30.7
25.0
221.3
Sri Lanka
3.7
27.2
15.1
6.5
9.6
18.6
15.5
23.2
12.4
61.2
55.0
50.3
MIDDLE EAST
34.0
32.7
57.7
67.9
63.7
78.6
92.6
85.7
69.8
155.8
190.6
302.6
Iraq
10.6
10.3
12.1
12.8
13.1
15.3
18.9
17.6
14.2
30.3
43.5
50.1
.1
2.9
17.9
18.9
19.4
22.8
28.0
26.0
21.0
22.8
27.0
89.1
Saudi Arabia
1.6
.0
.2
.0
2.7
3.2
3.9
3.6
2.9
.0
1.8
9 7
Syria
.6
.0
4.0
13.2
3.7
4.3
5.3
4.9
4.0
33.2
30.4
26.5
United Arab Emirates
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
.0
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
TABLE 3
--CONTINUED
.CHINA: IMPORTS. FOB, BY AREA AND COUNTRY a/
Million US $
1979 1980 1981 ANNUAL
II III IV I II III IV I II 1978 1979 1960
NORTH AFRICA 20.4 14.7 18.0 29.8 32.3 37.7 46.4 46.1 37.2 107.3 75.0 146.1
Eoypt 7.6 7.3 8.7 15.9 16.4 19.1 23.5 21.9 17.7 64.8 31.2 75.0
Libya .0 .0 .0 ' .0 .0 0 .0 .0 .0 .0 .0 .0
SUB-SAHARA AFRICA 61.2 55.0 64.7 70.6 70.0 84.0 104.4 96.1 77.5 172.9 235.2 325:0
Nigeria 2.6 2.5 2.9 3.1 3.2 3.7 4.6 4.3 3.4 7.3 10.6 14.6
Sudan 22.4 21.6 25.6 27.1 27,8 32.5 40.0 37.2 30.0 40.0 91.9 127.4
inn7ania .0 .0 .0 .0 .0 .0 .0 .0 .0 13.1 . .1 .1
Zambia 11.4 10.8 12.8 13.5 13.9 16.3 20.0 18.6 15.0 25:4 41.5 69.6
LATIN AMERICA 205.5 167.2 151.5 209.5 157.1 190.2 242.3 225.5 181.8 559.1 765.4 799.2
Algootioa 47.7 15.7 17.0 85.3 32.7 19.0 52.0 48.4 39.0 61.6 193.0 189.1
Brazil 28.9 43.3 21.3 22.5 23.1 27.1 33.3 31.0 25.0 129.2 118 3 106.1
Chile 28.8 24.8 31.3 18.3 15.6 44.0 33.8 31.5 25.4 29.7 06.6 it? 8
r,I,4vicn 27.9 26.8 31.8 19.8 20.4 23.8 29.3 27.3 22.0 124.1 114.3 93.4
12.7 12.3 14.4 15.3 15.7 18.3 22.6 21.0 16.9 35.9 52.0 71.8
CONMNNISt COUNTRIES 428.2 447.2 609.1 433.4 417:7 475.5 635.6 488.2 369.1 1,568.4 1,942.7 1.962.1
USSR 25.2 44.2 129.1 77.0 44.6 60.3 111.6 42.5 12.4 242.2 268.1 291.5
?
EASTERN FURORE 296.8 300.9 358.9 275,0 289.4 317.4 403.6 333.7 266.4 ? 968.1 1,211.4 1.255.1
Czechoslovakia 35.8 34.4 40.9 43.2 44.4 52.0 63.9 59.5 48.0 126.2 146.8 203.5
En7t. ttormany 46.4 44.6 52.9 56.0 57.5 67.3 82.8 .77.0 62.1 182.0 150.0 71.5
liongary 12.9 19.2 31.9 9.8 11.7 9.5 23.6 8.3 6.7 57.5 67.9 54.7
Poland 30.3 38.7 44.4 35.4 23.0 24.6 25.5 11.9 6.9 98.0 148.1 lutt 7
Pbm.-inia 141.4 136.0 161.4 106.8 109.9 128.3 170.0 158.1 127.6 374.4 579.7 516 0
Yugoslavia 13.8 12.5 9.0 16.1 34.9 26.5 26.4 8.3 6.7 34.7 41.0 101 1
0111FP 5/ 106.2 102.1 121.1 81.4 83.7 97.8 120.4 112.0 90.3 358.1 435.1 123.1
PERCENT OF ESTIMATE OBTAINED FROM TRADE PARTNER DATA: Cl
WORLD 97.05 97.04 97.05 92.62 92.55 92.35 91.87 83.13 78.42 99.07 97.05 92.32
DEVELOPED COUNTRIES 100.00 100.00 100.00 100.00 100.00 100.00 100.00 98.82 96.20 100.00 100.00 100 00
LESS DEVELOPED COUNTRIES 79.94 82.11 81.53 77.19 74.19 72.60 72.29 63.46 51.38 93.81 6.1.50 73.96
COMMUNISI COUNIRIFS 99.77 99.78 99.82 76.82 75.32 74.60 76.63 13.99 5.22 99.81 99.79 75.91
a/ Cn9ntry 115.trIgs for any given area are not exhaustive; only major trade partners are presented. Country data for all
gb;ii401; to the right of an asterisk are extrapolated and are subject to change. See appendix A, China: International Trade
Quarterly Rnview. First Quarter 1979 for further details.
b/ Kampuchea. Cuba. Mongolian Republic, Laos, North Korea, and Vietnam.
1Hclud,,; quarterly data that have been interpolated from annual trade partner data.
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
Approved For Release 2007/08/15: CIA-RDP83B00551R000200050011-1
TABLE 4
CHINA: TRADE BALANCES, FOB,
BY AREA
AND COUNTRY a/
Million
US $
1979
1980
1981
ANNUAL
II
III
IV
I
11
III
IV
I II
1978
1979
128.0
WORLD
-360.2
117.5
372.5
22.1
470.2
45.2
-300.7
-356.9
1,243.0-
-180.6
-610.2
240.8
NON-COMMUNIST COUNTRIES
-312.6
144.1
370.1
50.9
434.6
70.1
-319.2
-396.2
1,070.2
-258.8
-422.6
240.7
DEVELOPED COUNIRIES
-1276.2
-887.8
-1053.9
-1,015.6
-951.4
-1403.4
-1875.0
-1.615.2
-694.4
-3,491.6
-4,525.4
-5.245.3
EAST ASIA AND PACIFIC
-502.6
-128.3
-358.4
-233.0
-332.9
-342.9
-734.3
-570.0
-264.0
-1,515.3
-1,545.9
-1,643.1
Australia
-127.4
-152.0
-249.6
-151.0
-185.0
-183.5
-32.4
-136.2
-108.9
-344.0
-609.8
Japan
-364.0
24.7
-83.6
-47.8
-134.6
-141.0
-646.5
-389.6
-143.2
-1,126.4
-880.2
-969.9
?
NORTH AMERICA
-274.4
-309.2
-522.6
.-656.6
-677.6
-971.4
-1003.7
-973.4
-353.1
-900.2
1,493.5
-3.383.3
Canada
-104.5
-99.1
-67.0
-86.2
-213.2
-174.5
-135.9
165.5
156.7
-359.3
-363.9
United States
-169.9
-210.1
-455.7
-570.4
-464.4
-796.9
-867.7
-541.0
1,129.6
-2,699.5
WESTERN EUROPE
-499.2
450.3
-172.9
-126.0
59.1
-89.0
-137.0
-71.8
-77.3
1,076.0
-1,486.1
-291.0
Belgium
-31.4
1.8
8.6
16.2
15.9
14.1
14.6
20.2
-13.1
-166.3
-62.4
6') .F3
Eranc.
-12.0
-16.1
10.3
40.0
40.9
17.0
5.6
58.2
4.0
-2.9
-54.9
18,2:4
West Germany
286.9
-294.4
-217.5
-252.2
-26.2
-82.6
-81.8
-86.0
120.3
676.5
1.028.3
-442.8
Italy
-18.7
15.7
75.8
56.9
32.1
15.4
21.1
-23.5
26.8
-14.3
66.0
125 4
Netherlands
-4.5
7.5
5.9
23.0
21.7
20.7
24.6.
25.1
32.9
-25.9
-23.4
90.0
Spa in
-19.5
.6
13.4
20.7
15.1
12.1
-8.9
3.3
13.8
-6.9
-12.4
20 0
Sweden
-12.9
-9.6
-10.7
2.8
14.2
,-8.2
1.6
-3.4
1.9
-35.0
-45.1
10.1
Switzerland
-13.4
-15.8
-28.3
-17.5
-12.2
-12.5
-30.3
-10.3
-15.4
-51.1
-71.4
-72.5
United Kingdom
-81.8
-120.0
-19.7
-34.0
-26.8
-12.4
-4.2
-49.8
-20.2
10.3
-195.0
-77,4
LESS OFVELOPED COUNTRIES..
963.6
1,031.9
1,424.0
1 066.5
1,386.0
1,473.5
1,555.8
1,219.0
1.764.6
3,232.8
4,102.8
5,485.1
SOUTHEAST ASIA
808.0
838.2
1.059.5
892.6
1,060.6
1,127.5
1,238.9
1,066.8
1.263.5
2,810.3
3,998.5
4,21',3 6
1i,7-nq Kong
615.8
675.9
794.1
700.0
776.2
818.8
856.7
677.2
832.0
2,186.5
2.6'38.6
3,151.6
Indonn=ia
33,3
37.3
34.3
39.2
36.5
48.1
63.9
58.6
64.0
116.2
125.3
182.7
MplPvsin
24.4
-10.9
28.3
21.6
-8.5
1.9
9.5
31.3
42.9
100.2
. 90.1
24.4
Ehilippines
11.6
-2.4
42.6
18.1
32.3
58.0
57.3
20.4
37.2
64.8
70.0
.11
SinInnro
52.3
65.1
52.0
46.8
72.7
85.9
85.8
127.8
115.2
267.9
221.8
2d1
1.1,111and
31.8
47.0
54.5
18.0
93.3
60.0
101.7
93.0
108.0
3.1
153.4
273.i
sourIA ASIA
60.9
9.2
39.6
-48.4'
15.7
43.1
-36.4
-174.8
13.2
25.9
139.5
-26.0
Bangladesh
17.2
11.8
12.2
10.8
9.4
16.3
29.2
28.3
32.8
18.0
45.7
65.8
Pakistan
28.5
18.1
29.4
-61.1
8.8
38.6
-47.7
-184.8
-12.5
48.7
92.4
-61.4
Sri Lanka
17.2
-19.3
-.8
8.1
3.0
-4.5
-8.1
-9.0
-2.4
-33.6
8.5
MIDDLE EAST
135.8
168.1
188.3
170.0
193.1
196.3
221.8
202.5
245.5
409.2
571.7
781.2
Iraq
8.4
10.9
14.4
12.8
15.9
15.7
16.6
15.0
21.4
29.6
33.8
61.2
Kuwait
27.1
29.0
25.2
23.0
28.1
27.9
30.0
27.1
37.1
68.7
98.3
109.9
Saudi Arabia
26.7
38.9
42.5
44.1
49.4
52.3
59.7
54.7
60.8
90.3
126.1
205.6
sy-nia
13.4
5.8
13.2
-1.2
4.8
4.8
5.1
4.6
6.4
14.2
16.8
11.5
United Arab Emirates
22.2
25.0
33.5
30.9
29.1
31.1
35.6
32.7
35.6.
73.8
105.7
126.8
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--CONTINUED
CHINA: TRADE BALANCES, FOB, BY AREA AND CDONIPY a
1979 1980 i98i
_lv.u_?-__
II III IV I II I I I IV I I I 1970 1379
NORM AFRICA 21.3 24.2 35.3 28.8 34.4 33.4 35.0 38.1 54.8
Egvpt -.8 .3 .8 -2.1 -.7 -2.4 -4.5 -4.4 1.5
Linen 16.1 18.0 22.3 21.7 24.6 26.3 30.1 27.6 30.1
602 'm 5
-12.8 -1.3
50.7 70.5 102 5
SUB-SAHARA AFRICA 82.9 100.9 125.4 118.8 138.6 138.1 151.8 138.0 178.5 360.5
Nigeria 56.8 63.7 79.6 76.9 87.5 93.0 106.1 97.2 107.6 179.5
Sudan -12.3 -10.2 -11.5 -13.4 -12.3 -16.0 -21.1 o-19.9 -11.0 6.6
Tanzania 7.8 8.7 10.9' 10.6 12.0 12.8 14.6 13.4 14.7 22.2
Zambia -9.6 -10.8 -12.8 -13.5 -13.9 -16.2 -20.0 -18.6 -15.0 -17.6
981.6
242.3
-47.5
34.3
41.2
551.7
I .7
?5,7 8
49.9
03.5
LATIN AMERICA -145.3 -108.8 -24.2 -95.2 -56.4 -64.9 -55.3 -51.6 9.1 -433.1 -470.1 -27, 0
Alq9ntina -45.6 -13.2 -12.0 -80.1 -250 -9.8 -41.5 -38.7 -28.5 -53.2 -132.4 -1'Lr; 4
Brazil -15.7 -36.1 40.0 32.4 6.0 25.5 69.4 63.2 78.0 -124.9 -32.4 13t 3
Chile -22.4 -19.3 -23.9 -12.7 . -6.3 -37.4 -26.4 -24.7 -18.0 -19.0 -12.7 .P;) P,
-18.9 -16.7 -19.3 -6.4 -5.2 -7.6 -10.8 -10.4 -3.5 -07.3 -74 8
Peru -9.5 -8.7 -10.0 -11.0 -10.8 -13.1 -16.6 -15.5 -11.0 -25.9 -33.0 51 h
COMMUNIST- COUNTRIES -47.7 -26.5 2.4
USSR 10.7 -3.8 -7.7
-28.8 35.6 -24.9 18.4 39.3 172.7 78.2 -181.6 .0
-27.9 3.0 -18.6 -20.1 -6.8 13.9' 10.1 -27.4 -53.0
EASTERN EUROPE -50.7 -24.7 1.6 . -3.5 21.0 -10.3 42.7 51.6 132.6 13.7 -143.4 50.0
Czecho5lovakin -4.6 .5 2.6 -1.0 3.4 -1.0 -5.5 -5.9 10.6 9.8 -9.0 '4.1
East Germany -3.0 3.8 7.4 2.6 . 8.9 3.5 -1.8 -2.7 19.1 -44.0 .0 13.2
Hungary -1.2 -5.2 -10.7 2.6 -.5 5.2 -2.8 1.9 4.5 13.3 -14.7 4.5
Poland -11.0 -14.1 2.1 -8.3 13.9 -4.5 19.4 15.7 1.2 -6.7 -43.3 20.6
Rumania -21.9 -2.4 4,9 2.2 13.9 3.9 50.0 43.6 92.9 40.9 -52.7 70.0
itigoi-.1avia -1.8 -1.7 1.3 -1.7 -19.5 -17.6 -16.1 -.2 2.1 35.5 7.1 -04.9
OIHER b/
-7.7
2.0 8.5
2.5 11.5
3.9 -4.2
-5.6 26.2
49,4
-16.7 11.7
a/ Country listings for any given area are not exhaustive; only major trade partners are presented Country data for All
Quarters to the right of an asterisk are extrapolated and are subject to change. See appendix A, China: International Trade
Quarterly Review, First Quarter 1979 for further details.
0 Kampuchea. Cuba, Mongolian Republic, Laos, North Korea, and Vietnam.
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Table 5
China: Balance
(Billion
of Payments
US$)
1978
1/
1979
1980
Current Account
0.9
0.2
1.2
Merchandise Trade
-0.2
-0.6
0.2
Exports (fob)
10.2
13.8
19.6
Imports (fob)
-10.4
-14.4
-19.4
Services and Transfers
1.1
0.8
1.0
Tourism
0.3
0.4
0.6
Freight
0.2
0.2
0.4
Unrequited Transfers
0.3
0.5
0.4
Technology
negl.
-0.3
-0.3
Interest
0.1
-0.1
negl.
Earnings from Hong Kong
0.1
0.2
0.2
Other invisibles
0.1
-0.1
-0.3
Capital Account
-1.1
0.3
0.8
Medium and Long Term
-0.9
-0.6
0.4
Whole Plant
-0.1
-0.2
0.2
Government Credits
-0.8
-0.5
-0.2
International Organizations
0
0
0.3
Foreign Investment
0
negl.
0.1
Grain
negl.
0.1
0.1
Short Terms
-0.3
0.9
0.4
Down-payments for Whole Plants
-0.4
-0.2
0.3
Commercial
0.4
1.2
0.1
Settlement Accounts
-0.4
-0.2
-0.1
Changes in Reserves 2/
-0.1
-0.2
0.1
Errors and Omissions
0.3
-0.2
-2.1
1/ Tables may not add due to rounding.
2/ Negative sign indicates an increase in foreign exchange reserves.
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CONFIDENTIAL
Central Intelligence Agency
National Foreign Assessment Center
28 October 1981
MEMORANDUM
China's Political and Economic Leadership
In classic Leninist fashion, the Chinese Communist Party
makes fundamental policy decisions and oversees their
implementation, whereas the government is charged with carrying
them out. All authority rests ultimately with the party, and in
practice senior government officials usuallu hold ranking
positions in the party as well.
The ultimate decisionmaking authority rests in the
Politburo--a body of 24 who meet periodically to discuss issues
of major importance--and within that body, in the Standing
Committee, composed of Party Chairman Hu Yaobang and the six vice
chairmen. Since February 1980, the Politburo has been less
active, however, and much of its authority has devolved to the
party Secretariat. The Secretariat, staffed by younger and abler
men--each of whom is responsible for a particular functional
area--handles the day-to-day affairs of the Chinese Communist
Party, making policy recommendations and launching major
initiatives in problem areas. The Secretariat is formally
chaired by Hu, but Xi Zhongxun may now be in charge of day-to-day
matters.
Associated with the Politburo and the Secretariat are a
number of research institutes under the Chinese Academies of
Science (CAS) and Social Sciences (CASS). Although they are
formally governmental rather than party organs, the CAS and CASS
conduct basic research on important political and economic
problems, draft position papers and speeches for senior party
leaders, and oversee advanced training in the sciences and social
EA M 81-10010
This memorandum was prepared by of the China
Internal Division of the Office of East Asian Analysis, National
Foreign Assessment Center in response to a Treasury Department
request. Questions and comments are welcome and may be directed
to the author
CONFIDENTIAL
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sciences. For particularly sensitive issues, such as the party
assessment of Mao's place in history or when special expertise is
required, the CAS or CASS convene ad hoc committees.
The locus of authority in the government is the State
Council, headed by Premier Zhao Ziyang and 11 vice-premiers; with
three exceptions all are concurrently members of the Politburo or
the Secretariat (see chart). State Council members collectively
preside over 38 ministries as well as 62 offices, special
agencies, and commissions that cut across ministerial lines.
Each State Council member heads one or more of the agencies
directly subordinate to the council.
China's senior leaders are united in their rejection of the
radicalism of the Cultural Revolution and in general favor social
and institutional reform as well as the opening to the West.
They differ, however, over the means of attaining these
objectives. The majority put greater emphasis on the creation of
a more open society, development of a vigorous if small free
market, the judicious use of material incentives in the
workplace, and a pragmatic approach to ideology. Hu, Zhao, de
facto ruler Deng Xiaoping, and to a lesser extent Chen Yun,
China's senior economic planner, support these views, whereas
other more orthodox leaders, including Ye Jianying, Li Xiannian,
and disgraced former party chairman Hua Guofeng, have
reservations about a number of these policies.
These different approaches have been reflected in recent
discussions of economic policy. Economic policymakers just below
the senior level of the party have disagreed over the last two
years on such subjects as the proper mix of investment between
heavy and light industry, the merits of decentralizing foreign
trade, the political and economic effects of greater reliance on
market forces, and the role of whole plant imports and foreign
loans in building China's economy. Principal figures in these
debates include:
-- Bo Yibo, Central Committee member, Vice Premier, and
Minister in Charge of the State Machine Building
Industry Commission, presides over the reform of China's
extensive machine building industry and is the principal
figure in Sino-US economic relations.
Gu Mu, Secretariat member, Vice Premier, and Minister in
Charge of the Foreign Investment Control Commission and
the Import/Export Commission, is particularly active in
setting foreign trade policy and is generally associated
with the more orthodox policymakers.
-- Yu Qiuli, Politburo and Secretariat member, Vice Premier,
and Minister in Charge of the State Energy Commission,
appears to favor a higher priority for heavy industrial
development.
2
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Yao Yilin is a Secretariat member, Vice Premier, Minister
in Charge of the State Planning Commission, and a
protege of Chen Yun. Yao favors raising the standard of
living by increasing agricultural and light industrial
production.
Wan Li, Secretariat member, Vice Premier, and Minister
Charge of the State Agricultural Commission, also
stresses raising living standards.
Heads of other key ministries and economic commissions
include:
Wang Bingqian, Minister of Finance, a protege of Vice
Premier Bo Yibo and career financial expert, who has
served as Director of the Budget and Vice Minister.
Zheng Tuobin, recently appointed Minister of Foreign
Trade, a technocrat who supports current efforts to
decentralize foreign trade.
in
Han Guang, appointed Minister in Charge of the State
Capital Construction Commission in March, a technocrat
charged with bringing the PRC capital investment program
under control.
Yuan Baohua, Minister in Charge of the State Economic
Commission and a proven economic manager, whose
appointment in March reflects the leadership's
determination to improve performance and managerial
competence in key ministries.
3
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Central Intelligence Agency
National Foreign Assessment Center
28 October 1981
MEMORANDUM
China's Banking and Foreign Exchange System
Like most other economic institutions-in China, the banking
system is undergoing significant changes. The central government
is trying to revive the system as.a major instrument for
coordinating and controlling economic activity. The need for
overhaul results from damage incurred during the Cultural
Revolution, when the banking system was relegated to a position
of little more than cashier(accountant for the Ministry of
Finance.
In 1978 the People's Bank of China (PBOC)--China's central
bank--resumed its position at the apex of a system that includes
the Agricultural Bank and its credit cooperatives, the Bank of
China (the foreign banking arm), and the Capital Construction
Bank. The PBOC reports directly to the State Council, the
highest executive organ of the Chinese Government. After the
State Planning Commission establishes the annual economic plan,
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budgetary authorities and banking officials allocate and
coordinate the flow of funds required to fulfill the plan.
Although basic planning is done in terms of goods and services,
Chinese banking leaders draw up a parallel plan in monetary terms
to correspond as closely
as possible to
the planned flow of real
goods and services.
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The Domestic Banking
Structure
The Peoples Bank of China is the country's main operating
bank, with more than 15,000 branch and subbranch officesand
330,000 staff and employees throughout the country. As China's
central bank, it issues currency, sets the interest and foreign
exchange rates, and formulates and implements nationwide credit
and cash reserve plans. In addition, the Bank is the major
source of short- and medium-term credit for state enterprises
over and above the level anticipated in the enterprise financial
EA M 81-10011
This memorandum was prepared by the China External
Division of the Office of East Asian Analysis, National Foreign
Assessment Center in response to a Treasury Department request.
Questions and comments are welcome and may be directed to the
author
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plans. Most Pixed and working capital requirements still are
satisfied via budgetary grants channeled through the banking
system, but increasingly funds are being loaned by the banks, at
different rates of interest, based on creditworthiness.
The Agricultural Bank is the primary instrument for
providing modern banking operations in China's huge rural sector
and was formally reestablished in February 1979. Central
government efforts to mobilize rural sources of savings and to
make more credit available to the agricultural sector have
fluctuated with changes in Beijing's priorities for developing
agriculture. The Agricultural Bank was established in 1955,
abolished in 1957, reopened again in 1963, and was abolished
again some time in the late 1960s or early 1970s. During those
periods when the Agricultural Bank was out of operation, rural
banking was supervised by an agricultural department within the
Peoples Bank. The Agricultural Bank now operates under the
guidance of the Peoples Bank and is the main channel for state
investment and credits to agriculture as well as for the
collection of state revenue in the countryside. The Bank has
1,300 branches and offices in rural areas and employs 230,000
workers and staff. The Bank also manages China's 62,000 credit
cooperatives, which employ an additional 260,000 full-time staff
members and some 400,000 part-time workers.
The Capital Construction Bank is a specialized bank for
managing state investment in capital construction. Unlike the
Agricultural Bank, which is overseen by the Peoples Bank, the
Construction Bank operates under the joint guidance of the State
Capital Construction Commission and the Ministry of Finance. The
Bank disburses budgetary grants for construction projects,
provides credits, and maintains the accounts for units involved
in geological survey, construction, and installation, and for
enterprises that purvey construction materials. Recent
discussions of the problems of waste and diversion of funds imply
that the Construction Bank has inadequately.monitored the uses of
investment funds. This suggests that the Construction Bank also
may be brought under the Peoples Bank.
The Enhanced Role of Banking in the Domestic Economy
During the past two years, the central government has made
active use of the banking system to alleviate inflationary
pressures and may soon employ the system as a major tool for
encouraging more efficient use of both fixed and working capital.
China's banking system also regulates the quantity of cash
available to the economy. The rise of urban and rural incomes
since early 1979 and the continued inability of the economy to
satisfy the demand for goods and services have become a major
concern for the central authorities. The cash balances of
individuals are controlled, not by regulation, but by social
pressures and modest interest payments on savings deposits.
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Interest rates on the deposits of individuals have been raised
twice, in April 1979 and again in April 1980. Although sources
differ on the size and rates of growth of urban and rural
deposits, the higher interest rates apparently are generating
significant increases in deposits. Individual deposits appear to
have risen by about 30 percent during 1979 to approximatel 28
billion yuan, 20 billion of which represent urban savings.
Beijing has made similar efforts to tighten control over the
funds of industrial and commercial enterprises. Since 1950,
government units, public institutions, and state enterprises have
been required to deposit their funds--beyond mall cash
holdings--with the Peoples Bank. In contrast, during the 1950s
collectively owned units--mainly rural agricultural and
industrial production units and rural communes--had no such
requirements. Today, these units must deposit most of their
funds with of the Peoples Bank or the rural credit cooperative.
Cash is used only for payment of wages and pensions, state
purchases of agricultural products, and payments between
individuals. More than 90 percent of the cash released is for
paying wages and purchasing farm production and rural
handicrafts. Bank transfers rather than cash account for the
vast majority of transactions in the economy.
Recent moves by the central authorities to have the banks
check more closely the cash balances of enterprises, improve loan
collection, and ensure that funds are used for their intended
purposes suggest a lax enforcement of regulations in recent
years. Beijing has kept the interest rate paid on deposits by
state and collective enterprises at 1.9 percent a year since
1972. To encourage reductions in cash balances, however, the
government has instituted new penalties for nonpayment or misuse
of loans. In March 1980 the state placed a 20-percent surcharge
on the previous interest rate for overdue loans, a 30-percent
surcharge on loans covering excess inventories, and a 50-percent
surcharge on loans used to meet excess expenditures for capital
construction projects. The three surcharges are aimed at
remedying problems that have long impeded obstacles to more rapid
and balanced industrial growth:
-- the limited availability of credit caused by the
apparently large quantities of funds tied up in loans in
arrears.
extremely high inventories of finished but, in many
cases, unsalable products and larger-than-necessary
stocks of raw materials and intermediate products held
by industrial enterprises.
chronic overruns in the costs of constructing new
productive capacity.
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International Banking Activities
The Bank of China (BOC) is the specialized foreign exchange
bank of the PRC. Although it was nominally given independent
status directly under the State Council in February 1979, the BOC
continues in fact to refer important business and administrative
matters to the People's Bank. The Chairman of the Bank of China,
Bu Ming, also is vice president of the PBOC. BOC has more than
70 domestic branches and subbranches as well as overseas branches
in Hong Kong, Singapore, Luxembourg, and London. Overseas posts
established within the past year include a representative office
in Tokyo and a branch in New York. A Paris branch reportedly is
in the offing. The BOC also recently began to consolidate the
so-called "sister banks"--13 essentially state-owned banks in
Hong Kong and Macau that are legally classified as private
companies--into what will be on of the largest banking groups in
Hong Kong.
Although all elements within China's banking system have
undergone major overhauls, the changes adopted by the BOC perhaps
best illustrate how far Beijing is willing to go to promote
economic modernization. Before 1978 the Bank took a strictly
passive role in the international market. Activities of overseas
branches were limited to accepting remittances, financing trade,
and on rare occasions arranging credit. Now BOC managers are
encouraged to engage in any profitable banking practice. Since
1978 the Bank has helped manage loan syndications and real estate
purchases and has arranged well over $30 billion in credits. In
addition, it has cooperated with US and Japanese bankers to set
up merchant banks in Hong Kong and is well along the way to
floating bonds in both Japan and Hong Kong. There are even
rumors that the BOC will soon invest in Western stock markets.
Domestic responsibilities also have been broadened. Bank of
China branches nationwide are being encouraged to lend to
enterprises with export-earning potential. Loans can either be
in foreign exchange or local currency. Light industry has been
singled out for special emphasis because of its labor-intensive
nature and its ability to rapidly generate foreign exchange. In
Guandong, Fujian, Shanghai, Tianjin and Beijing--areas having
greatest economic autonomy--BOC branches have authority to
provide loans of up to $5 million without seeking higher-level
approval. Branches in other provinces are also gaining authority
albeit over small amounts of funds. After making loans, the
banks are expected to follow the progress of the projects and
assist in all aspects of management to ensure proper use of the
funds.
The speed with which most of the changes were introduced has
severely taxed the Bank's personnel and, in part at least, has
been responsible for a less than favorable Western view of
Chinese capabilities. Foreign bankers over the past two years
have found their Chinese counterparts generally ignorant of
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standard Western banking practices. Although the Chinese are
gradually acquiring experience, occasional problems reoccur.
Early this year, the Bank drew criticism for its hi
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a recent Beijing decree
or i ing enterprises from depositing the foreign exchange
outside China, the Bank had difficulty attracting deposits.
Under decentralization, enterprises that could retain a portion
of their foreign exchange earnings were depositing the bulk of
their funds in Hong Kong to take advantage of easier
accessibility and higher interest rates.
The Changing Foreign Exchange System
The Bank of China also played a major role in revamping
China's foreign exchange rate mechanism. Since December 1980
China has been using a two-tiered exchange rate system with both
an official (external) rate and an internal rate. Foreigners--
travelers as well as businessmen--continue to observe only one
exchange rate, officially set at about 1.7 yuan per dollar, when
purchasing or selling renminbi (RMB). 1/ Domestic enterprises,
however, now face an internal exchange rate of 2.8 yuan per
dollar--a de facto depreciation of 46 ntkevbuvar
sell foreign exchange through the Bank of China.
Internally, the introduction of a two-tiered system is
undoubtedly an attempt to make exporting profitable and importing
more costly while at the same time avoiding the stigma usually
associated with a currency devaluation. In the past, China's
foreign trade corporations (FTCs), which handle the bulk of two-
way trade, have generally shown book losses on exports and
profits on imports. The losses came about because the FTCs were
required to purchase goods on the domestic market at prices set
by fiat rather than by production costs or market forces. The
RMB prices that the FTCs paid for these goods, when converted
into foreign currency at the official exchange rate, exceeded the
prices that these goods commanded on the world market. On the
import side, for analogous reasons, foreign goods generally
commanded a higher RMB price in the home market than the FTCs
spent in purchasing (at the official exchange rate) the foreign
exchange necessary to acquire goods from abroad.
So long as most trade was handled by organs of the central
government, the profitability question created no real
problems. The volume and type of exports, to a large degree,
1. At present, the renminbi, like all Communist currencies, is
not convertible on the world market. Foreigners may purchase
only enough RMB to carry out specific trade or financial
transactions. The official rate is reportedly tied to a basket
of currencies and therefore fluctuates moderately over time.
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were determined by State plans, which the FTCs were expected to
carry out regardless of profitability. Losses sustained in
exporting were offset either by FTC profits from importing or by
government funds extended through the Bank of China. With
Beijing now emphasizing profitability as a measure of efficiency,
however, the standardization of the two-tier exchange rate system
can be viewed as a means to forestall possible shifts out of
exports and into imports by profit-seeking domestic traders.
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China's Banking System
State Council
People's Construction
Bank of China (provides
funding for major
construction projects)
2,500 branches
Agricultural Bank of
China (provides loans
for agriculture)
23.000 branches
60.000 credit cooperatives
Ministry of Finance
(China's principal
financial administrative
organ)
Departments: ? Representative to
International Monetary
Administrative Finance Fund
Agricultural Finance
Budget
Defense Firiance
Economic Construction
People's Bank of China
(China's monopoly bank
of issue and savings)
Subsidiaries: Departments:
China Financial Editorial
Financial Research Institute
Accounting and Currency
Issue
Advisors
Bank Note Printing
Credit and Loan
Planning
Savings Deposits
Science and Education
Supervision
External Financial Relations Bank of China (China's
.
monopoly foreign
Financial Affairs of exchange bank)
Enterprises
Foreign Affairs
Inspectorate
Departments: 77 domestic branches
Taxation
Accounting
Taxation of Foreigners
Banking Transactions 6 overseas branches
Credit
Foreign Exchange Representative to
World Bank
International Accounts
International Relations 948 correspondent banks
Solid line: Direct connection
Broken line. Incirect connection or guiaance
General Administration of
Exchange Control (the
agency which sets
China's foreign exchange
rates)
Departments:
Foreign Exchange Control
Policies
Foreign Exchange Rates
Foreign Exchange Rules
and Regulations
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MEMORANDUM
CONFIDENTIAL
Central Intelligence Agency
National Foreign Assessment Center
28 October 1981
Chinese Investment and Tax Laws
Following the chaos of the Cultural Revolution, Beijing in
the late 1970s seriously sought to create a new judicial system
having a distinct body of legal rules and the agencies to
administer them. Beijing also has concentrated on rebuilding the
courts and the formal criminal process. China's judicial
hierarchy now consists of three types of courts: the Supreme
People's Court in Beijing, a three-tiered system of local
people's courts, and special courts. This structure, however, is
new and untested, and Western businessmen are frequently confused
and dissatisifed with the 7aps and ambiguities within the Chinese
legal arena.
China's Legal Framework
Beijing has recently established economic tribunals under
the people's courts in some cities and major towns. These
tribunals are of special interest to foreign investors and
traders because they are responsible for handling cases involving
speculation, profiteering and other (unspecified) economic
crimes, for adjudicating economic conflicts between enterprises
(including Chinese and foreign enterprises), and for promoting a
stable atmosphere for China's economic growth. The orecise scope
of their jurisdiction, however, is unclear.
Chinese Perceptions of the Role of Law in Society
Culture has helped shape the nature of legal institutions
and government policies in China. China's present legal
institutions not only reflect strong continuities with
traditional Chinese views about law but also show the influence
of Soviet legal theory. A clear, functional separation between
the legal system and the government bureaucracy does not exist.
EA M 81-10012
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to the author 25X1
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CONFIDENTIAL
Law continues to be a veht.cle for the expression of official
philosophy guarded by an elite, which in theory governs by virtue
of noble example and deep wisdom. Encounters with the legal
system still provoke fear and suspicion among a populace, which
regards any such experience as a serious breakdown in the social
order. Local loyalties and personal networks continue to play a
strong role in identifying and punishing violators of the social
order. Chinese society never developed a concept of individual
rights guaranteed by the state. Moreover, contracts are
commercial documents that are needed only to define the desired
outcome of a transaction rather than to establish the rights and
responsibilities of the contracting parties.
Beijing's efforts to reorganize China's legal system reflect
a need to construct more effective legal institutions and to
establish standards for official behavior. The primary functions
of the new institutions are to reinforce discipline and maintain
social order, to control arbitrary actions by officials, and to
provide guidelines for individual behavior and organizational
management, particularly in the economic sector. The role of law
in China's international economic relations is to regulate
foreign economic activity in China, from direct investments to a
variety of joint transactions.
Implications for Foreign Trade, Finance, and Investment
China's broadening of international economic activity is
also forcing Beijing to adapt its legal system more to Western
concepts. The Chinese traditionally preferred loosely drawn
agreements with disputes settled on an informal basis, whereas
Westerners insist on tightly drawn, detailed legal documents,
with the courts as the arbiter of disputes.
Although trade dealings and plant purchases have accorded
China some familiarity with Western contract law over the years,
China's opening to foreign investment presented new problems for
the PRC legal system. After an initial burst of interest,'
potential investors immediately grew apprehensive about entering
into deals where no legal structure spelled out investor rights,
obligations, and protections. After some delay, China published
in mid 1979 the Joint Venture Law, which governs participation of
foreign companies in joint ventures, licensing deals, processing
operations, and compensation trade. This law also stimulated
further economic legislation designed to promote and regulate
foreign trade and investment while protecting China's interests
and sovereignty. Investors still found the law vague, and
further interpretive-legislation was required. Among the laws
adopted since August 1980 to regulate foreign economic activities
in China were those pertaining to labor management, the
registration of joint ventures, joint venture taxes, the
Guangdong special economic zones, and foreign exchange control.
2
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CONFIDENTIAL
The Chinese are still attempting to define the legal aspects
of economic relationships. China's traditional preference for
settling all disputes--including foreign economic matters--by
compromise remains. Although the regulations on labor management
provide for a bureau to arbitrate disputes and permit the
dissatisfied party to sue in the local people's courts, the real
extent of bureau and court authority is untested. Bilateral
trade as well as economic and shipping agreements that China has
concluded with other governments usually include provisions that
allow the parties involved to determine the course and location
of any arbitration. The viability of the other regulations will
be tested as investors attempt to apply them in meeting,
changing, or canceling contract terms.
Problems
The ambiguous and inconsistently applied economic rules, the
vacillating policies, the inexperienced legal and regulatory
institutions, and an unfamiliarity with Western commercial and
legal practices--all these factors have complicated-the
production and implementation of rules covering foreign economic
partners and have retarded growth of outside investment in
China. Although the Chinese have accommodated some foreign
commercial practices, they have done so in response to the needs
and demands expressed by prospective outside investors without
regard for the complexity of the task of creating clear rules
where none had existed. Moreover, in attempting to clarify some
points of law through supplemental regulations, the Chinese
frequently have departed from the intent and meaning of the
original law.
Inconsistencies and changes in policies on which the laws
are based have led to misinterpretations. Although
decentralization has permitted Chinese negotiators to enter into
and approve transactions with foreigners without central
endorsement, the extent and limits of the authority and of the
regulations governing foreign investments are unclear.
Differences in the characteristics of Chinese and foreign
negotiating styles also have created problems. Linguistic and
cultural differences and the absence of a common background for
problem solving have produced divergent concepts of proper
methods of doing business and perceptions of the legal aspects of
commercial transactions. Because of limited experience in
complicated commercial transactions, the Chinese have continued
to apply concepts associated with simpler transactions to more
complex ones, and disagreements over the definition and validity
of contracts have been common. Long, confusing, and frequently
unsuccessful negotiating sessions are the norm.
Foreigners have expressed concern over matters that remain
unresolved or untested. These include standards for defining a
valid contract, guarantees of the rights and responsibilities
stipulated in contract terms, the question of tax creditability,
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CONFIDENTIAL
guaranteed investment protection, patent rights, and standard
arbitration facilities and procedures. Until these problems are
clarified and a track record of dealings and dispute settlements
between foreign firms and the Chinese develops, the Chinese legal
system will continue to be an enigma and impediment to foreign
economic relations.
4
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MEMORANDUM
Central Intelligence Agency
National Foreign Assessment Center
28 October 1981
China's Energy Outlook
China's energy output will drop by about 3 percent in 1981
after a 1-percent decline last year. This decline, following
three decades of rapid growth, is already beginning to constrain
Chinese industrial and transport activity.
The outlook through 1985 is hardly encouraging inasmuch as
large investments are required in China's coal mines and
oilfields just to maintain current output rates. New capacity in
these industries is coming on stream very slowly, and ambitious
plans to develop hydroelectric and nuclear power are lagging.
The long lead times associated with new energy resources make a
resurgence of energy growth rates commensurate with desired
industrial growth unlikely until the late 1980s. In the last two
years, energy conservation has lessened the impact of fuel
shortages, but a rapid shift of the country's industrial output
mix toward light industry--forcing a sharp decline in energy
intensive heavy industry--has been the main factor in reducing
energy demand. With a likely shift toward restoring some growth
in heavy industry, however, a further decline in energy output
would prove much more serious.
Oil Production Decline
Although down only marginally in 1980, crude oil output is
currently running at 2.02 million barrels a day, 5 percent below
last year's rate. Just three years ago, China's leaders expected
oil output to more than double, producing 4 to 5 million barrels
a day by 1985. Now they admit that China will do well just to
maintain a 2-million b/d rate through the mid 1980s.
EA M 81-10013
This memorandum was prepared by of the China
Internal Division of the Office of East Asian Affairs, National
Foreign Assessment Center in response to a Treasury Department
request. Questions and comments are welcome and may be directed
to the author
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High-level Chinese officials suggest that the slowdown
results from an overemphasis on production without sufficient
attention to the exploration and development of new fields. In
fact, considerable exploration has taken place, but antiquated
equipment and outmoded techniques contributed to an apparent
exaggeration of reserves, especially in the geologically complex
Huabei (North China) Basin near Beijing. Development efforts
have often been inappropriate to the geologic environment and in
some cases have harmed the prospects for sustaining high
output. Meanwhile, production in some of China's older oil
fields--most notably Daqing and Shengli, which together produce
70 percent of China's oil--has leveled off and may soon begin to
decline.
Fall in Gas Output
Natural gas production faces many of the same problems as
oil, but output has declined even more steeply--10.3 percent--
this year. About half of the gas output comes from fields in
Sichuan Province where known reserves are reportedly being
depleted. Much of the rest is produced residually with crude oil
in the major oilfields. The decline in gas output is affecting
industrial consumers in Sichuan Province even though supplies to
almost all nonindustrial consumers have been terminated.
Fertilizer plants there and in .th- 8; - ? s y appear
to be particularly hard hit.
Coal Output Stagnates
China's coal industry is now under pressure to fill the
expected energy gap caused by oil shortages. In 1980, however,
coal production declined by 2.4 percent to 620 million tons, and
Beijing anticipates a further drop to 600 million tons in 1981.
Monthly output figures so far indicate that the target will
barely be met. Production in some of the older mining areas,
particularly in the Liaoning fields, has leveled off and may be
declining. Moreover, the central government has deliberately
retarded the growth of uneconomical small mines, which have
accounted for much of the increase in China's coal output in
recent years. Inadequate investment has slowed development of
large new mines and has prevented the construction of adequate
rail and port facilities to transport the coal.
To maximize the return on still inadequate investment
levels, the Chinese are concentrating on a few areas which
already have large proven reserves. Eight coalfields or bases
are earmarked for most of the investment funds allocated to
developing new mines. These coal bases have rich deposits
totaling about 120 billion tons and already have some working
mines and required infrastructure. The Chinese also are focusing
on rail and port facilites. For instance, four of the five
railroads which serve coal-rich Shanxi Province are being
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upgraded either by electrification or double tracking. These
efforts probably will permit production to increase slowly,
perhaps to 650 million tons or more by 1985.
Electric Power Shortages
Despite significant progress in developing its electric
power, China's generating capacity is still embryonic and unable
to meet the increasing demand from industry and agriculture.
There have been widespread reports of factories operating at only
70 to 80 percent capacity because of electricity shortages, and
many new plants lack sufficient power to start operation.
Despite improved hydroelectric output, total electric power
production is up only 1.4 percent this year, far below the rates
required to support planned modernization.
In the face of power shortages, the industry is receiving a
larger share of an admittedly smaller capital investment budget.
At present about 22,000 megawatts (MW) of new capacity is under
construction--10,000 MW of hydroelecric and 12,000 MW of thermal--
to add to the country's 60,000 MW capacity. By 1985 about 18,000
MW should become operational, an annual growth rate of just over
5 percent. Although this matches most forecasts of industrial
growth, electric power requirements general_y increase faster
than industry as a whole.
To satisfy growing needs in the late 1980s and 1990s, Beijing
has attempted to draw up a major program of large coal-fired and
nuclear-powered thermal plants and several exceptionally large
hydroelectric projects. These plans, however, are only
preliminary. Because hydro- and nuclear-power projects are
capital-intensive and require long lead times, their development
has been postponed in favor of coal-fired thermal plants.
Outlook for US Involvement
Beijing's high priority on energy considerations--
particularly in the petroleum, coal, and electric power
industries--augurs well for American contracts. US energy-
related firms are regarded by the Chinese as having the best
technolgy and expertise. Moreover, foreign exchange constraints
are not as binding as in other sectors, partly because oil and
coal can be important foreign exchange earners.
Nevertheless, progress in signing contracts has been slow.
Although this has been discouraging to many firms, Chinese
slowness should be expected, given the scale of many of the
energy projects. Because the projects are so large and costly
and diverge from past policies that discouraged foreign
involvement, the Chinese bureaucracy is having a difficult time
making decisions. Major planning mistakes in the past, like
those associated with the Baoshan steel mill, have made
decisionmaking even more difficult.
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The most promising area for potential cooperation is
offshore oil exploration and development. If contracts are
signed and exploration is even moderately successful, oil could
easily became the strongest commercial link between the United
States and China.
Western firms, primarily US, already have spent almost $200
million on a gratis basis in the South China Sea to complete one
of the most comprehensive seismic surveys ever done. The surveys
have identified a considerable number of geological structures
favorable for oil or gas accumulation. Reserves cannot be proven
without extensive exploratory drilling, but the Chinese are
suggesting that the area could produce on the order of one
million barrels per day by the early 1990s, enough to-offset the
declines expected at Daqing and Shengli by then. Given the
nature of oil exploration, it is also possible that the area will
produce little oil.
The Chinese Ministry of Petroleum was expected to issue
invitations to bid by late 1980, but legal and technical problems
caused a postponement. Beijing now says invitations will be
extended within a few months.
Oil firms are expected to use their own funds
for exploration, whereas substantial bank or government financing
probably will be required for development expenses. Under such
arrangements, the Chinese would provide relatively small amounts
of capital, but in turn would five 7p a sizable portion of
ultimate output.
Despite China's looming oil shortages, Beijing's caution and
slowness about negotiating with Western firms are understandable.
Although China would benefit from the technology shared in the
offshore effort, it would be putting into foreign hands one of
its most likely sources for maintaining oil self-sufficiency.
Given the poor record of its own offshore program, Beijing would
appear to have little choice, but some among China's leadership
and in its petroleum industry may hold different views.
US firms also are well positioned to aid in and benefit from
the development of China's electric power system. To
successfully modernize, China will have to spend about $100
billion over the next 20 years on power plants and transmission
systems. For development on such a scale, China almost certainly
will attempt to build its own manufacturing capacity and
incorporate a host of improved and new technologies--possibly
including nuclear power reactors. Emphasis on acquiring new
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manufacturing technology will make equipment sales to China
difficult, but US firms may benefit from joint venture and
licensing agreements.
The Westinghouse and Combustion Engineering contracts for
sharing technology to manufacture 300 MW generators--financed in
part by Eximbank's first loans to China--are an example. These
units probably will become the standard generator for scores of
Chinese powerplants over the next 20 years, and this would
promise the US equipment suppliers a long-term beneficial
relationship with China.
Chinese purchase of a US-built nuclear power plant or a
licensing agreement to manufacture in China the major parts of
such plants likewise would inaugurate a long term commercial
relationship. Questions regarding the economics of the capitalr
intensive nuclear plants have not been definitively resolved,
however, in part because the Chinese system is not well equipped
to handle such issues. Feasibility studies suggest that major
demand areas like Gwangdong, Liaoning, and Shanghai might support
nuclear plants. Whether such plants would be built by the
domestic nuclear machine building industry on its own or would be
imported from the West (Framatome of France is the strongest
competitor to US firms) also must be resolved. At present, on
the basis of a reported postponement of the proposed
Gwangdong/Hong Kong nuclear power plant and a tentative approval
to construct a small domestically built plant in the Shanghai
area, Beijing appears to be favoring a limited program of
domestic construction. In any case, nuclear power is unlikely to
make a significant contribution through the end of the century.
Prospects for large-scale US participation in China's coal
and hydropower industries are less promising, but US equipment
supply firms probably will continue to export significant amounts
of their products. Much of the equipment for coal and hydropower
development is available domestically or can be imported from
highly competitive Japanese or West German firms. Even so,
Chinese purchases of US earthmoving equipment have been
substantial--$100 million out of total imports of $500 million
for earthmoving equipment in 1979. Such imports declined sharply
in 1980, however, due to readjustment cutbacks. Technical
exchange agreements such as the US-China hydropower protocol
signed last year improve the prospects for future sales.
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China: Primary Energy Production, 1970-1981
Million tons of standard coal equivalenta
700
600
500
400
300
200
100
1
1970
75
aBased on coal yielding 7,000 kilocalories per kilogram.
bprojected figures.
1
81 b
80
, Natural gas
Hydroelectric power
Oil
'Coal
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BO Yibo
(Phonetic: bwo)
(5631/0001/3134)
Vice Premier; Minister in
Charge, State Machine-
Building Industry Com-
mission
Addressed as:
Mr. Vice Premier
A longtime special-
ist in economic manage-
ment, Bo Yibo was ap-
pointed a vice premier in
July 1979, a member of
the Central Committee of
the Chinese Communist
CHINA
Party in September of that year, and Minister in
Charge of the newly created State Machine-Building
Industry Commission in February 1980. The Commis-
sion is charged with strengthening management and
integrating civilian and defense aspects of the
machine-building industry.
A native of Shanxi Province, Bo graduated from
Guomin Normal School in Taiyuan in 1930. He later
took courses at Beijing University but did not grad-
uate, probably because he was jailed for participat-
ing in anti-Japanese disturbances. He served as
China's first Minister of Finance during 1949-53.
Bo was Chairman of the State Construction Commission
from 1954 to 1956, when he became Chairman of the
State Economic Commission and was named a vice pre-
mier. From 1962 to 1966 he concurrently served as
Vice Chairman of the State Planning Commission. Bo
was purged during the Cultural Revolution (1966-69)
and did not reappear until 1978. In September 1980
he led a delegation of the State Machine-Building
Industry Commission to the United States.
Bo, 73, is a widower and has several chil-
dren. His wife was a government official who was
persecuted during the Cultural Revolution. She died
in 1967.
16 October 1981
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CHEN Yun
(Phonetic: chun)
(7115/0061)
Member, Chinese Communist
Party Politburo Standing
Committee; Vice Chairman,
CCP Central Committee;
First Secretary, Central
Discipline Inspection
Commission (since De-
cember 1978)
Addressed as:
Mr. Chen
Chen Yun, China's
elder statesman for eco-
nomic affairs, is respon-
sible for overall long-term economic planning. The
architect of China's economic programs from 1949 to
1958, Chen is an advocate of gradual, balanced eco-
nomic growth that stresses agriculture and light
industry. From July 1979 until his resignation in
September 1980, he served as a vice premier in addi-
tion to all his other duties. He was also Minister
in charge of the influential State Financial and
Economic Commission from July 1979 until March 1981,
when the Commission was dissolved.
CHINA
Active in Chinese Communist Party affairs since
the 1920s, Chen rose to become the ranking vice pre-
mier by 1954 and a member of the Politburo Standing
Committee in 1956. In 1958 Mao Zedong launched the
Great Leap Forward, an ambitious program to produce
rapid economic growth. Chen criticized Mao's poli-
cies as unrealistic, and his political influence
began to erode. Denounced during the Cultural Rev-
olution (1966-69), he lost his membership on the
Politburo and his vice-premiership. After Mao died
in September 1976, Chen regained much of his former
stature.
Chen, who is about 76 years old, is a native of
Jiangsu Province.
19 October 1981
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FANG Yi
(Phonetic: fahng)
(2455/3015)
Member, Politburo and
Secretariat, Chinese
Communist Party Central
Committee; Vice Premier;
Minister in Charge of the
State Scientific and Tech-
nological Commission
Addressed as:
Mr. Vice Premier
Fang Yi is China's
ranking science adminis-
trator and a prominent
spokesman for making
scientific and educational excellence the cutting
edge of China's modernization drive. The elevation
of Fang--then a vice president of the Chinese Acad-
emy of Sciences (CAS)--to the Politburo in August
1977 reflected the commitment of the post-Mao Zedong
leadership to rejuvenate civilian science. Fang
assumed control of the State Scientific and Techno-
logical Commission in October 1977. In that post he
coordinates the work of the three pillars of Chinese
research and development--the CAS, the universities
and the ministerial research institutes. In March
1978 he was named a vice premier. From July 1979
until May 1981 he was president of the CAS. He was
appointed to the Communist Party Secretariat, the
day-to-day working body of the Central Committee, in
February 1980.
CHINA
Experienced in finance and trade matters, Fang
shaped China's foreign aid program from the mid-
1950s through the mid-1970s. Before his current
assignments he had served as Minister of Economic
Relations with Foreign Countries during 1970-77.
Fang, 65, understands English and has some
knowledge of Japanese and German. He has a notice-
able red birthmark on the right side of his face.
He is married.
20 October 1981
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GU Mu
(Phonetic: goo)
(6253/3668)
Vice Premier; Minister in
Charge, Import-Export
Commission and Foreign
Investment Control Com-
mission
Addressed as:
Mr. Vice Premier
A senior economic
manager for more than two
decades, Gu Mu plays a
part in nearly every area
of the economy and is
especially active in the
current modernization program for agriculture and
industry. He has been a vice premier since 1975.
In 1979 he assumed his posts at the Foreign Invest-
ment Control Commission and the Import-Export Com-
mission. He has been a member of the Secretariat of
the Chinese Communist Party (CCP) Central Committee
since 1980.
CHINA
Gu regularly hosts foreign visitors from indus-
trialized countries and participates in domestic
economic and industrial conferences. He frequently
travels abroad to meet with economic officials.
Between 1979 and 1981 he visited Japan several times
in attempts to sooth Sino-Japanese tensions brought
on by the cancellation of contracts between the two
countries.
After joining the CCP in 1932, Gu served as a
provincial and municipal official until 1954, when
he transferred to Beijing to become first a vice
chairman and then chairman (1965) of the State Con-
struction Commission, a predecessor of the State
Capital Construction Commission. At the Commission
he was involved in directing the national economy.
Purged in 1967 during the Cultural Revolution, he
returned to public life in 1972 and was elected a
full member of the CCP Central Committee in 1973.
From 1973 until early 1981 he was Minister in Charge
of the State Capital Construction Commission. Gu,
who is about 67, is married.
16 October 1981
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HAN Guang
(Phonetic: hahn)
(7281/0342)
Minister in Charge, State
Capital Construction Com-
mission (since March
1981)
Addressed as:
Mr. Minister
One of the few heads
of major commissions who
are not concurrently vice
premiers, Han Guang is
responsible for adminis-
tering the organization
that has principal au-
thority over capital investment in China. Before he
became Minister, he had served as a vice minister of
the Capital Construction Commission for nearly three
years. He has been a member of the Chinese Commu-
nist Party (CCP) Central Committee since August 1977
and has served on its Discipline Inspection Commis-
sion since December 1978.
CHINA
0
Han has been active in CCP affairs since he
joined the party in 1931. He studied in the Soviet
Union during the late 1930s. After he returned to
China in about 1939, he served briefly in Xinjiang
Province and then in Yanan, the CCP's wartime head-
quarters. Between 1946 and 1957 he served in vari-
ous party and government posts in northeast China,
including those of mayor of Luda and Governor of
Heilongjiang Province. In 1957 Han transferred to
Beijing to deal with scientific and technological
matters. By 1958 he had become a vice chairman of
the Science and Technology Commission. Han retained
that position until 1967, when he was purged during
the Cultural Revolution. He was rehabilitated in
1973 as a member of the China Council for the Pro-
motion of International Trade.
Han, who is about 70, speaks some Russian.
19 October 1981
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TANG Ke
(Phonetic: tahng)
(0781/0344)
Minister of the Metallurgi-
cal Industry (since July
1977)
Addressed as:
Mr. Minister
An experienced ad-
ministrator, Tang Ke has
guided the metals indus-
try through major produc-
tion gains during the
past several years. Al-
though metallurgy.has
played a significant role
in China's economic modernization, the regime's
currently more conservative plans have slowed the
growth rate of the metals industry in favor of other
sectors. Since late 1979 Tang and the industry have
been publicly criticized for overly rapid develop-
ment and for problems surrounding the construction
of the costly Baoshan iron and steel works near
Shanghai.
CHINA
Before he
about 20 years
try. He was a
Control Bureau
went into metallurgy, Tang had spent
in the Ministry of Petroleum Indus-
deputy director of the Petroleum
by 1951 and held the post for at
least five years. He became a vice minister of
petroleum industry in 1965. In 1967, during the
Cultural Revolution, Tang was purged, and he made no
public appearances until 1970. By December 1971 he
had become a vice minister of the newly formed Min-
istry of the Fuel and Chemical Industries. He later
served as a vice minister of the metallurgical in-
dustry (1975-77). He has been a member of the Chi-
nese Communist Party Central Committee since 1977.
Tang, 63, has traveled widely. In 1972 he
attended the UN Conference on the Human Environment
in Stockholm. He toured several Latin American
countries in 1974 and 1975, visited Europe in 1978,
and led metallurgical delegations to the United
States and Japan in 1979.
19 October 1981
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WAN Li
(Phonetic: wahn)
(8001/6849)
Vice Premier; Member,
Secretariat, Chinese
Communist Party Central
Committee; Minister in
Charge, State Agricul-
tural Commission
Addressed as:
Mr. Vice Premier
In February 1980 Wan
Li became a member of the
Secretariat of the Cen-
tral Committee of the
Chinese Communist Party. c
In April he was appointed a vice premier, and in
July he took over the State Agricultural Commission,
thus becoming China's top agricultural official.
Wan has had a long association with party Vice
Chairman Deng Xiaoping, dating back to 1950, when
Wan worked under Deng's supervision in Chongqing,
Sichuan Province.
CHINA
After the founding of the People's Republic in
1949, Wan held several economic posts. In 1955 he
became a vice minister of building, and during 1956-
58 he was Minister of Urban Construction. For the
next eight years he was a Beijing party secretary
and vice mayor. Purged in 1966 during the Cultural
Revolution, Wan emerged from disgrace in 1971 as a
member of the standing committee of the Beijing
party committee. By 1974 he had regained his pre-
Cultural Revolution status as a Beijing party secre-
tary and a vice chairman of the city government.
During 1975-76 he served as Minister of Railways,
but in mid-1976 he encountered political difficul-
ties with the Gang of Four and other leftists.
After the fall of the Gang of Four in late 1976, Wan
served as a vice minister of light industry (Janu-
ary-June 1977). In mid-1977 he was dispatched to
Anhui Province, where he held the top party and
government posts. He remained in Anhui until his
transfer to Beijing in February 1980.
Wan, who is about 65, was leader of a delega-
tion of agricultural experts that visited the United
States in 1979 at the invitation of the State of
Maryland.
20 April 1981
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WANG Bingqian
(Phonetic: wahng)
(3769/0014/0051)
Minister of Finance
(since August 1980)
Addressed as:
Mr. Minister
A veteran finance
officer, Wang Bingqian
had served as a vice
minister of finance for
seven years before he was
named Minister. During
his tenure as a vice
minister he was active in
meeting and hosting for- e
eign economic delegations.
CHINA
Wang has been affiliated with the Finance Min-
istry since at least 1963, when he was director of
the Budget Department. He did not appear in public
between 1963 and 1970. In 1971 he worked in the
People's Bank of China, which was then subordinate
to the Finance Ministry.
Wang served on the Committee to Examine Motions
during the second session of the Fifth National
People's Congress (China's legislature) in June
1979. He was elected president of the Chinese Ac-
counting Society in January 1980. He is 55 years
Old.
20 April 1981
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YAO Yilin
(Rhymes with wow)
(1202/0181/2651)
Vice Premier; Member,
Secretariat, and Direc-
tor, General Office,
Chinese Communist Party
Central Committee; Min-
ister in Charge, State
Planning Commission
Addressed as:
Mr. Vice Premier
In 1979 Yao Yilin,
an experienced economic
administrator, became a
vice premier and head of the General Office of the
Chinese Communist Party (CCP) Central Committee.
The following year he was appointed to serve concur-
rently on the Secretariat of the Central Committee
and as Minister in Charge of the State Planning Com-
mission.
CHINA
One of China's top economic decision makers, he
has stressed agricultural and light industrial pro-
duction, as well as raising the purchasing power of
the people. He has stated that China must concen-
trate on the development of coal, petroleum, and hy-
droelectric power resources. He has also said that
there should be an increased use of petroleum as a
raw material for the chemical industry and a deem-
phasis of its use as a fuel.
Yao joined the CCP in the 1930s. He became a
vice minister of trade in 1949. During 1959-66 he
served in the Finance and Trade Offices of both the
Central Committee and the State Council; he concur-
rently held the post of Minister of Commerce from
1960 until he was dismissed in 1967 during the Cul-
tural Revolution (1966-69). He reemerged in 1973 as
Vice Minister of Foreign Trade. During 1978 he
briefly served once again as Minister of Commerce.
Yao, 64, has been a host to many foreign visi-
tors to Beijing. He traveled to Europe in April
1977. At one time he spoke some English, but he cur-
rently uses an interpreter.
16 October 1981
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YU Qiuli
(Phonetic: yew)
(0151/4428/6849)
Vice Premier; Minister in
Charge, State Energy Com-
mission; Member, Polit-
buro and Secretariat,
Chinese Communist Party
Central Committee
Addressed as:
Mr. Vice Premier
An acknowledged
economic planning spe-
cialist, Yu Qiuli was
made a vice premier in @
1975. He has been a member of the Politburo of the
Chinese Communist Party Central Committee since
August 1977 and of the party Secretariat since Feb-
ruary 1980. As Minister in Charge of the State
Energy Commission--a post created in August 1980--he
directs China's energy ministries. In September
1980 he was named to the Committee for the Revision
of the Constitution.
CHINA
Yu is a native of Jiangxi Province. He became
a member of the Communist Youth League in 1929 and
of the Communist Party in 1931. He subsequently
joined the People's Liberation Army, eventually
rising to the rank of lieutenant general before
leaving the military in 1958 to become Minister of
the Petroleum Industry. In that capacity he was in-
volved in the development of the large Daqing oil-
field in Heilongjiang Province in the 1960s. Yu was
the target of Red Guard criticism during the Cultur-
al Revolution (1966-69), but he emerged from the ex-
perience relatively unscathed. In 1972 he was ap-
pointed Minister in Charge of the State Planning
Commission--a position that gave him responsibility
for planning in all sectors of the economy; he was
removed from that post in August 1980. In late 1979
he accompanied then party Chairman Hua Guofeng on a
visit to four West European countries.
Yu, who is about 67, has only one arm-'-his
right.
7 July 1981
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YUAN Baohua
(Phonetic: yooen)
(5913/1405/5478)
Minister in Charge, State
Economic Commission;
Chairman, China Enter-
prise Management Asso-
ciation
Addressed as:
Mr. Minister
Yuan Baohua became
Minister in Charge of the
State Economic Commission
in March 1981, after hav-
ing served since 1978 as
a vice minister of the
Commission. As Minister, he is responsible for
translating long-term economic plans into workable
programs for improving the industrial and transpor-
tation sectors of the economy. Since 1979 Yuan has
been chairman of the China Enterprise Management
Association, an organization composed of scholars,
experts and managers interested in upgrading the
quality of economic management practices.
CHINA
0
Involved in economic affairs since 1950, Yuan
first gained national attention in the Ministry of
Metallurgy, where he served as a vice minister from
1959 to 1960. During 1960-63 he was a vice chairman
of the Economic Commission. In 1963 he was appoint-
ed director of the General Bureau for Allocation of
Materials. The following year he was promoted to
Minister when the bureau became the Ministry of Al-
locations. Although Yuan was criticized during the
Cultural Revolution (1966-69), he apparently was not
purged because he appeared in public in 1969 and
1970 as a "leading member" of an unidentified State
Council office. He served as vice minister of the
State Planning Commission during 1974-78.
Yuan, 65, is a native of Henan Province. He
led an economic delegation to the United States in
November 1979 and one to Western Europe during May-
June 1980.
25 September 1981
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ZHAO Ziyang
(Phonetic: jaow)
(6392/4793/7122)
Premier; Vice Chairman,
Chinese Communist Party
Addressed as:
Mr. Premier
Agriculture special-
ist and administrator
Zhao Ziyang was named
Premier in September
1980, only five months
after he had been trans-
ferred from his provin-
cial leadership posts to
become a vice premier.
In June 1981 he was elected third-ranking vice
chairman of the Chinese Communist Party after having
served less than two years on the elite Politburo.
Zhao's rapid rise has been widely attributed to his
enthusiastic implementation of CCP Vice Chairman
Deng Xiaoping's economic reform policies while hold-
ing his provincial posts during 1975-80.
Until his transfer to Beijing, Zhao had spent
his entire career in local government. During most
of the Sino-Japanese war (1937-45) he served as a
county and prefectural party secretary in east Chi-
na. By 1965 Zhao had risen to CCP first secretary
of Guangdong Province, but he was purged in 1967
during the Cultural Revolution. He reappeared in
north China in 1971 and the next year returned to
Guangdong, where he was restored to his old post by
1974. In December 1975 he became first secretary
and Governor of Sichuan, China's most populous prov-
ince. Zhao was initially elected to the CCP Central
Committee in 1973. He became an alternate member of
the Politburo in 1977 and a full member in 1979.
According to Western press reports, Zhao is
relaxed, friendly and easy to deal with. While a
provincial leader, he visited Iran, Romania, Yugo-
slavia and Western Europe. In his current capacity
he has traveled to Pakistan, Bangladesh, Nepal and
Southeast Asia. Zhao, who is married, is about 62
years old.
CHINA
16 October 1981
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ZHENG Tuobin
(Phonetic: jung)
(6774/2148/1755)
Minister of Foreign Trade
(since 10 September 1981)
Addressed as:
Mr. Minister
A foreign trade
expert for more than 25
years, Zheng Tuobin had
been a vice minister of
foreign trade for nearly
four years before assum-
ing his current post.
During his career he has
dealt extensively with
Western and socialist governments.
CHINA
Zheng's career with the Foreign Trade Ministry
began in about 1953, when he was deputy chief of the
export section of the First Bureau (socialist coun-
tries). He left the Ministry in 1958 to become a
commercial counselor at the Embassy in Moscow and
remained there until 1964. By 1966 he had returned
to the Ministry as acting director of the First
Bureau. For the next five years he did not appear
in public. He reappeared in December 1971 but was
not identified in a specific post until April 1973.
From then until December 1977, he was director of
the Third Bureau, which is responsible for trade
with Western Europe, the Americas and Oceania.
Zheng has traveled widely in the course of his offi-
cial duties, but he has not yet been to the United
States.
Zheng, 57, is a native of Shaanxi Province. He
speaks and understands some English.
23 September 1981
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J.J
Central
Government
Organizations
of the People's
Republic of
China
State Council Organizations
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Standing Committee of the
National People's Congress
Chairman
III YE Jianying
Secretary General
II YANG Shangkun
Vice Chairmen
BANQEN Erdini Qoigyi Gyancan
? DENG Yingchao (f)
HU Juewen (f)
? LI Jingquan
? LIAO Chengzhi
NGAPOI Ngawang Jigme
? PENG Chong
MI PENG Zhen
? SEYPIDIN
SHI Liang (f)
SOONG Ching Ling (f)
? SU Yu
? TAN Zhenlin
? ULANHU
IIII WEI Guoqing
III XI Zhongxun
? XIAO Jingguang
XU Deheng
? YANG Shangkun
ZHU Yunshan (f)
State Council
Premier
? ZHAO Ziyang
Secretary General
DU Xingyuan
Vice Premiers (in Rank Order)
II WAN Li
III YU Qiuli
^ GENG Biao
? FANG Yi
II GU Mu
? YAO Yilin
? KANG Shi'en
? CHEN Muhua (f)
? BO Yibo
JI Pengfei
? YANG Jingren
^ ZHANG Aiping
II HUANG Hua
Supreme
People's Court
President
II JIANG Hua
Vice Presidents
HE Lanjie
WANG Weigang
ZENG Hanzhou
ZHENG Shaowen
Supreme People's
Procuratorate
Chief Procurator
? HUANG Huoqing
Deputy Chief Procurators
CHEN Yangshan
GUAN Shanfu
LI Shiying
WANG Fu
XI Zhanyuan
YU Bing
ZHANG Su
Ministries
Agricultural Machinery
Minister
YANG Ligong
Education
Minister
? JIANG Nanxiang
Machine Building (1)
Minister
RAO Bin
National Defense
Minister
? GENG Biao
Agriculture
Minister
? LIN Hujia
Electric Power Industry
Minister
LI Peng
Machine Building (2)
Minister
III LIU Wei
Petroleum Industry
Minister
KANG Shi'en
Building Materials
Minister
SONG Yangchu
Finance
Minister
WANG Bingqian
Machine Building (3)
Minister
LU Dong
Posts and
Telecommunications
Minister
WEN Minsheng
Chemical Industry
Minister
SUN Jingwen
Food
Minister
ZHAO Xinchu
Machine Building (4)
Minister
QIAN Min
Public Health
Minister
QIAN Xinzhong
Civil Affairs
Minister
CHENG Zihua
Foreign Affairs
Minister
HUANG Hua
Machine Building (5)
Minister
? ZHANG Zhen
Public Security
Minister
ZHAO Cangbi
Coal Industry
Minister
GAO Yangwen
Foreign Trade
Minister
? LI Qiang
Machine Building (6)
Minister
CHAI Shufan
Railways
Minister
GUO Weichang
Commerce
Minister
WANG Lei
Forestry
Minister
YONG Wentao
Machine Building (7)
Minister
ZHENG Tianxiang
State Farms and
Land Reclamation
Minister
III GAO Yang
Communications
Minister
PENG Deqing
Geology
Minister
SUN Daguang
Machine Building (8)
Minister
Textile Industry
Minister
? HAO Jianxiu (f)
Culture
Minister
Justice
Minister
WEI Wenbo
Metallurgical Industry
Minister
TANG Ke
Water Conservancy
Minister
QIAN Zhengying (f)
Economic Relations
With Foreign Countries
Minister
? CHEN Muhua (f)
Light Industry
Minister (acting)
SONG Jiwen
This chart identifies officials known to hold leading positions in
the Central Government of the People's Republic of China.
Information received as of 15 May 1981
has been used in preparing this chart.
CR-81-10215 (Supersedes CR-78-13497)
May 1981
584043 5-81
Offices
Birth Planning
Leading Group
Head
II CHEN Muhua (f)
Counselor's Office
Director
LIU Yi
Educated Youth
Leading Group
Leader
? WANG Renzhong
Environmental Protection
Leading Group
Leading Member
WANG Zongjie
Foreign Affairs Office
Director
^ GENG Biao
Foreign Language
Publications
Director
LUO Jun
General Affairs Section
Director
WANG Weizheng
General Office
Director
WU Qingtong
Government Offices Bureau
Director
National Defense
Industry Office
Director
IN HONG Xuezhi
National Olympic Committee
President
ZHONG Shitong
National Secretarial Office
for Science
Secretary
WANG Wenda
New China News Agency
Director
ZENG Tao
Office in Charge of
Helping Educated Youth
First Deputy Head
KA NG Yonghe
Office of Overseas
Chinese Affairs
Director
? LIAO Chengzhi
Political Work Group
Director
Religious Affairs Bureau
Director
XIA0 Xianfa
Staff Office
Director
State Archives Bureau
Director
State Publications Bureau
Director
Commissions
Cultural Relations With
Foreign Countries
Minister in Charge
? HUANG Zhen
Foreign Investment Control
Minister in Charge
III GU Mu
Import/Export
Minister in Charge
? GU Mu
National Stratigraphic
Chairman
WU Heng
Nationalities Affairs
Minister in Charge
III YANG Jingren
Physical Culture and Sports
Minister in Charge
MI WANG Meng
State Agricultural
Commission
Minister in Charge
II WAN Li
State Capital Construction
Minister in Charge
In HAN Guang
State Economic
Minister in Charge
? Yuan Baohua
State Enerby
Minister in Charge
IN YU Qiuli
State Family Planning
Minister in Charge
^ CHEN Muhua
State Financial
and Economic
Minister in Charge
? CHEN Yun
State Machine-Building
Industry
Minister in Charge
II BO Yibo
State Planning
Minister in Charge
? YAO Yilin
State Scientific
and Technological
Minister in Charge
III FANG Yi
MI Identifies members or alternate members of the 11th Central
Committee of the Chinese Communist Party.
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Special Agencies
All-China Federation of
Industry and Commerce
Chairman
HU Zi'ang
All-China Federation of
Supply and Marketing
Cooperatives
Director NIU Yinguan
Central Meteorological
Bureau
Director
China International Trust
and Investment Corporation
President
RONG Yiren
China Travel and
Tourism Bureau
Director
LU Xuzhang
Civil Aviation General
Administration
Director General
SHEN Tu
Foreign Experts Bureau
Director
General Administration
of Customs
Acting Director General
ZHU Jianbai
General Administration
of Exchange Control
Director
BU Ming
General Administration
for Insurance
Director
Industry and Commerce
Central Bureau
Director
WEI Jinfei
Bank of China
President
BU Ming
People's Insurance
Company of China
Acting General Manager
SONG Guohua
Scientific and Technical
Cadre Bureau
Director
State Aquatic
Products Bureau
Director
ZHANG Zhao
State Archives Bureau
Director
State Labor Bureau
Director General
KANG Yonghe
State Metrology Bureau
Director
LI Leshan
State Museums and
Archaeological Data Bureau
Director
WANG Yequi
State Nationality Languages
Translation Bureau
Director
State Oceanography Bureau
Director
SHEN Zhendong
State Pharmaceutical
Administration
Director
YANG Shoushan
State Seismological Bureau
Director
LIU Yingyong
State Standardization
Bureau
Director
State Statistical Bureau
Director
CHEN Xian
State Supplies Bureau
Director
LI Kaixin
State Surveying
and Cartography
Director