THINKING ABOUT THE RISKS IN FINANCING CHINA'S NEW FIVE-YEAR PLAN

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00287R000400910002-8
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 19
• Document Creation Date: December 22, 2016
• Document Release Date: October 20, 2010
• Sequence Number: 2
• Publication Date: March 23, 1983
• Content Type: REPORT

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CONFIDENTIAL
23 March 1983
Thinking about the Risks in Financing
China's New Five-Year Plan
Summary
In contrast to past policies of conservative pay-as-you-go
financing, China's post-Mao leadership appears to be placing
heavy reliance on domestic credit to help fund the Sixth Five-
Year Plan (1981-85). We expect the cost of servicing domestic
budgetary debt from national bond sales and bank loans to rise
substantially during the decade; without careful mangement, the
debt servicing burden could constrain plans for more rapid
economic growth in the late 1980s.
Beijing has justified credit expansion in the post-1978
years of persistent budget deficits as an inevitable consequence
of its wide-ranging experiments with economic reform. Because
borrowing could increase inflation and consumer unrest, we
believe critics of Deng Xiaoping's reformist leadership may use
any negative fiscal-monetary results to try to discredit the
program of economic reform in its entirety. In our judgment,
Deng's coalition is willing to take these economic and political
risks because to do otherwise would undercut efforts to improve
economic management.
How the Plan Will Be Financed
Although Beijing has said comparatively little about
financial aspects of the new five-year plan, we can identify some
of the key elements.
CONFIDENTIAL
S18
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T t,vrr'uLrlI1HL
o Nearly 30 percent of capital investment in 1983 and
probably in 1984-85, as well, will be financed by
borrowing directly from domestic banks and indirectly from
foreign lenders via drawings on foreign exchange held by
the Bank of China. The remaining 70 percent will be
funded about equally by appropriations from.the national
budget and by extrabudgetary funds held by local
governments, central agencies, and individual enterprises
(see Table 1). Beijing had resorted to some domestic and
foreign borrowing during the Soviet-aided First Five-Year
Plan (1953-57), but the scale was relatively small, and
all debts were paid off by 1968.
o China's planners, using their own accounting techniques,
project small budget deficits through 1985. However,
using more conventional procedures -- for example,
deducting domestic bond sales and foreign loans from
revenues -- we estimate the deficits would be about three
times larger than Chinese expectations. (see Table 2).
o Although details are lacking on repayment schedules for
domestic loans, debt servicing on domestic bonds issued
during 1981-85 alone is likely to become a significant
share of budget expenditures toward the end of this
decade (see Table 3). Although Beijing expects budget
revenues to pick up with faster economic growth in the
post-1985 period, debt servicing could complicate efforts
to wipe out budget deficits during that period.
o To meet an expected excess of loans over deposits, the
banking system apparently will be called on to increase
the money supply by more than 10 percent per year through
1985. Projected currency expansion at that rate is about
double the rates of annual increases in consumer goods
production and the general level of economic activity
planned for that period. (see Table 4). In our view,
this will aggravate the already strong inflationary
pressures that began to build in 1979 (see Table 5).
Potential Risks
China's recent release of revised data on developments of
the past now makes it clear that budget deficits, overexpansion
of credit, and excessive printing of new currency have occurred
before and were especially serious during the Great Leap Forward
of the late 1950s. Beijing's post-Mao reformers obviously want
to avoid at all costs a situation as grave as that. Still, the
new strategy of augmenting budget allocations with bank credit to
finance economic growth carries with it potential hazards that
could jeopardize even the modest growth goals of the Sixth Five-
Year Plan and expose the advocates of this approach to criticism.
2
CONFIDENTIAL
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CONFIDENTIAL
Credit expansion is an integral part of reformist efforts to
distribute funds more efficiently by systematically displacing
interest-free budget allocations with interest-bearing bank
loans. Nonetheless, we are skeptical that Chinese bankers can
manage their new responsibilities as deftly as Beijing
anticipates. Banking agencies still lack the staff, skills, and
administrative clout needed to assess creditworthiness and to
resist pressure from enterprises for unjustified loans for
working capital and investment funds. In our view, Beijing may
find that restraining credit expansion is even more difficult
than controlling budget expenditures and deficits.
Expansion of the money supply, needed in Dart to accommodate
rising transactions requirements for currency generated by
economic reforms, is likely to put-heavy upward pressure on
prices. We believe the government could face a choice between
hiking already high interest rates on personal savings deposits
and domestic bonds or resorting to coercive tactics to soak up
excess consumer purchasing power.
Even if the government is successful in holding official
retail price increases to perhaps only 2-3 percent per year,
chances are that consumer discontent over declining real incomes
could force concessions that might:
o Increase wages in excess of gains in labor productivity.
o Protect the erosion of peasant incomes through further
increases in state purchase prices of agricultural raw
materials.
This would lead almost certainly to further increases in retail
prices to cover the resulting higher costs of production. During
a period in which Beijing intends to curb already huge price,
wage, and other budget-financed subsidies, it might find instead
that some subsidies must be increased.
Repayments on domestic debt (government bonds, loans to
finance budget deficits in 1979-80 and possibly also in 1983-85,
and interest on savings deposits) could become substantial in the
late 1980s and early 1990s -- a time when Beijing expects faster
economic growth. This could narrow the government's investment
options and make even more questionable the long-term goal of
quadrupling national output by the end of the century.
Some Implications
Despite fragmentary data for analysis -- as the gaps in the
appended statistical tables demonstrate -- we believe that
Beijing's break with traditionally conservative financial
practices has been and is likely to remain a controversial issue
among Chinese policymakers and their advisers.
3
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N vni 1 UF-11 I L M U
o A review of Chinese media treatment of the issue reveals
that the question of credit and currency expansion has
been a persistent topic for debate in professional
economic journals ever since the PRC disclosed the largest
budget deficit in its history in 1979.
o The near absence of discussion of credit in the lengthy
published excerpts from the new five-year plan also
suggests that the issue is controversial. In contrast to
otherwise rich data on specific targets for 1985, only one
sentence in the excerpts addresses the sources and uses of
bank credit, and no details at all have so far been
provided on the sources of budget revenue (even though
separate sections of the plan are reportedly devoted to
these topics).
o Nor is there any discussion *of how the small deficits
planned for 1983-85 are to be financed.
Finally, at the National People's Congress held in 1980, the 1979
budget deficit was the subject of critical commentary by many
delegates. Even some members of Deng Xiaoping's coalition
leadership voiced alarm. Similar criticisms were probably
expressed during the NPC sessions of 1981 and 1982.
This analysis leads us to believe critics of credit
financing are likely to seize on every negative financial
development that might arise in an effort to try to discredit the
entire program of economic reform. Proponents of credit
financing seem well aware of such prospects, however, and in our
judgment their willingness to take on the risks is a measure of
their conviction that such measures are essential to ridding the
economy of gross inefficiencies in the way capital and materials
are allocated. In the past four years, Deng and economic
reformers such as Premier Zhao Ziyang have invested a great deal
of political capital in the reforms. They apparently believe
they stand to lose as much by retreating as by moving ahead.
4
CONFIDENTIAL
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Table 1
China: Financing of Capital Investment in the
Economic Plan for 1983a
Investment in new fixed assets
Financed by:
Budget appropriations
Extrabudgetary funds
Credit expansion
Domestic bank loans
Foreign loans
Investment in renovating existing
fixed assets
Percent of Total
100.0 67.9
51.1
21.1
27.4
16.8
10.7
100.0 32.1
Financed by:
Budget appropriations 9.6
Extrabudgetary funds 59.6
Credit expansion 30.8
Loans from the Construction
Bank 8.3
Other loans 22.5 -
Total investment in fixed assets 100.0 100.0
Financed by:
Budget appropriations 38.0
Extrabudgetary funds 33.5
Credit expansion 28.5
a. Source: Appendix Table A.1. Components may not
sum to totals because of rounding.
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Table 2
China:
State Budget Accounts in Alternative Formats, 1979-85a
Est. Plan Plan
Plan
1979
1980
1981
1982
1983
1984
1985
A.
In the Chinese format
Total expenditures
127.39
121.27
111.50
113.69
126.2
128.0
130.4
Total revenues
110.33
108.52
108.95
110.69
123.2
125.0
127.4
Deficit
17.06
12.75
2.55
3.00
3.0
3.0
3.0
B.
In an alternative formatb
Total expenditures
127.39
121.27
111.50
113.69
126.2
128.0
130.4
Total revenues
106.69
104.22
(103.94)
(104.49)
(116.8)
(119.81
(122.2)
Deficit
20.70
17.05
(7.56)
(9.20)
(9.4)
(8.2)
(8.2)
Financed by:
Use of budget deposits
in banks
8.04
0
0
0
0
0
0
Loans from domestic banks
9.02
8.00
0
0
0
0
0
Sale of domestic bonds
0
4.75
(0.25)
4.20
4.0
(4.0)
(4.0)
Foreign loans
3.64
4.30
7.31
(5.00)
(5.4)
(4.2)
(4.2)
Total
20.70
17.05
(7.56)
(9.20)
(9.4)
(8.2)
(8.2)
a. Source: Appendix Tables A.2 - A.4. Figures in parentheses are our rovisional estimates.
b. This format is merely illustrative.
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China: Estimated Schedule of Repayments of Principal and Interest on Domestic Bonds, 1987-95
Million current yuan
1987 1988 1989 1990 1991 1992 1993 1994 1995
1981 bond issuea 1,208 1,247 1,286 1,325 1,364
1982 bond issueb 1,088 1,136 1,184 1,232 1,280
1983 bond issueb 1,088 1,136 1,184 1,232 1,280
1984 bond issueb 1,088 1,136 1,184 1,232 1,280
1985 bond issueb 1,088 1,136 1,184 1,232 1,280
Total annual repayments 1,208 2,335 3,510 3,645 6,004 4,832 3,696 2,512 1,280
a. In 1981, the Ministry of Finance issued domestic bonds totaling 4.87 billion yuan. They were sold almost
entirely to local governments, state enterprises, and central party, government, and military agencies. The
bonds, paying 4 percent simple interest per annum, are repayable beginning in the sixth year after issuance.
The bond issue is scheduled to be redeemed in 10 years, with 20 percent per year redeemed in the period 1987-
91.
b. In 1982 and 1983, the ministry planned to issue 4 billion yuan in bonds each year, with amounts issued annually
thereafter depending on financial needs. In contrast to the 1981 bonds, those issued in 1982-83 were to be
sold to both state agencies and individuals, the former paying 4 percent simple interest and the latter 8
percent. The schedule of repayments of principal and interest was calculated on the assumption that bond sales
after 1981 totalled 4 billion yuan per year, with half purchased by state agencies at 4 percent and half
purchased by individuals at 8 percent.
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China: Some Key Value Targets and Growth Rates in the Sixth
Five-Year Plan
Growth
Billion current yuan
rate (%)a
1980
1985
Net material product
366.7
455
4.4
State budget expenditures
121.2
130.4
1.5
State budget revenues
108.5
127.4
3.3
Banks' uses of funds
262.4
479.4
12.8
Banks'sources of fundsb'
227.8
420.3
13.0
Currency in circulation
34.6
59.1
11.3
207.1
290.0
7.0
Gross value of production
in light industryc
233.3
299.0
5.1
a. Average annual rate of increase, 1981-85.
b. Excluding currency in circulation.
C. In constant 1980 prices.
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Table 5
China: Direct and Indirect Indicators of Open and Repressed Inflation, 1978-85a
Est.
Plan
1
Tvoe of measurement
1978
1979
1980
1981
1982
1979-81
-85
198
Official price indices
Retail price index annual %
increase
0.7
2.0
6.0
2.4
(2.1)
3.4
(2-3)
Cost-of-living index annual %
increase
0.7
1.9
7.5
2.5
3.9
Personal savings deposits annual %
increase
16.0
33.4
42.2
31.1
35.5
Social purchasing power annual %
increase
12.2
23.7
21.0
11.0
(13.3)
18.4
(7.8)
Retail sales annual %
increase
8.8
15.5
18.9
9.8
8.9
14.7
Currency in circulation annual %
increase
8.5
26.3
29.3
14.5
(12.0)
(11.3)
Retail sales/gurrency in
circulation
a. Source: Appendix Table A.8.
b. Chinese planners generally consider ratios of less than about 7 to be indicative of inflation.
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Appendix: Detailed Statistical Tables
Explanatory note: Data in the tables were derived from a
wide variety of official and semiofficial Chinese sources.
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Appendix Table A.1
China:
Financing of Capital Investment in the Sixth Five-Year Plan
Billion current yuan
Est.
Plan
Plan Plan
Total
Total
1980
1981
1982
1983
1984 1985
1981-83
1981-85
Financed by:
53.94
44.3
52.5
50.7
----82.5---
147.5
230.0
Budget appropriations
28.06
18.0
19.6
26.1a
----54.5---
63.7
118.'2
Extrabudgetary funds
16.39
14.1
17.8
10.7
42.6
Credit expansion
9.49
12.2
15.1
13.9
41.2
Domestic bank loans
4.12
(4.9)
(10.1)
8.5
23.5
Foreign loans
Investment in renovating
5.37
(7.3)
(5.0)
5.4
-----8.5---
17.7
26.2
fixed assets
22.5
26.5
24.0
----57.0---
73.0
130.0
Financed by:
Budget appropriations
2.3
13.1b
4h
Extrabudgetary funds
14.3
78.
c
Credit expansion
7.4
5
Loans from Construction Bank
1.2
2.0
Other
5.4
Total investment in fixed assets
66.8
79.0
74.7
---139.5---
220.5
360.0
Fi
nanced by:
Budget appropriations
28.4
Extrabudgetary funds
25.0
Credit expansion
21.3
a. Includes direct ,appropriations of 19.63 billion yuan and 6.5 billion yuan for investment in key energy
and communications projects.
b. Includes foreign investment.
c. Consists of domestic bank loans
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China:
Appendix Table A.2
State Budget Accounts, 1977-85
Million current yuan
Est.
Plan Plan Plan
1977
1978
1979
1980
1981
1982
1983
1984
1985
Revenuesa
Taxes
46,827
51,928
53,782
57,170
62,989
67,950
72,970
Income from enterprises
40,235
57,199
49,290
43,520
35,368
31,100
- 32,390
Other revenue
323
2,833
3,616
3,530
3,281
(6,840)
(12,440)
Revenue from domestic funds
87,385
111,960
106,688
104,220
101,638
(105,690)
(117,800)
Foreign loans
61
151
3,639
4,300
7,308
(5,000)
5,400
Total revenue
87,446
112,1.12
110,327
108,520
108,946
110,690
123,200
125,000
127,400
Expendituresa
Capital construction appropriations
30,088
45,192
44,380
34,640
25,755
25,270
30,780
Enterprise modernization
3,945
6,324
7,202
8,050
6,530
6,070
6,570
Technical renovation
1,710
3,777
4,364
New product development
2,235
2,547
2,838
Geological survey
1,726
2,015
2,167
Working capital and credit funds
6,568
6,660
5,206
3,670
2,284
2,300
2,250
Aid and operating expenses for
agriculture
5,068
7,695
9,011
8,210
7,368
7,650
7,750
Operating expenses for industry,
communications, and commerce
1,443
1,779
2,104
Operating expenses for culture,
education, science, and health
9,020
11,266
13,212
15,630
17,13.6
19,000
20,400
National defense
14,904
16,784
22,266
19,380
16,797
17,870
17,870
Administration
4,332
4,909
5,687
6,680
7,088
8,000
8,500
Other (unspecified)
7,259
8,471
9,065
21,380
21,231
Expenditures from domestic funds
84,353
111,095
120,300
113,970
104,1.89
108,690
121,200
Foreiqn loans used for capital
construction
Nil
Nil
7,090
7,300
7,308
5,000
5,000
Total expenditure
84,353
111,095
127,394
121,270
111,497
113,690
126,200
128,000
130,400
Balance
Domestic accounts
3,032
865
-13,612
-9,750
-2,551
-3,000
-3,400
Total accounts
3,093
1,016
-17,067
-12,750
-2,551
-3,000
-3,000
-3,000
-3,000
Proceeds from deficit financing:
Use of budgetary bank depositsb
--
--
8,044
--
(2,301)
(-1,200)
(-1,000)
(-1,000)
(-1,000)
Overdraft from the People's Bank
--
9,023
8,000
--
Sale of domestic bonds
--
--
--
4,750
(250)
4,200
4,000
(4,000)
(4,000)
a. For a more detailed breakdown of revenues and expenditures for 1981-85, See Appendix Tables 3 and 4.
h. Positive figures indicate a withdrawal of Ministry of Finance deposits with the People's Bank of China; negative
figures indicate additions to deposits.
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3illion cur-Ant vuan
i981
5_
933
Draft
Final
Draft
Prel. Est.
raft
Taxes
58.05
62.99
64.60
67.95
72.97
Income from enterprises
37.37
35.37
34.41
31.10
32.39
Other revenue
2.24
3.28
2.44
(2.44)
2.44
Enterprise depreciaition
funds
(210)b
2.20
2.20
Other (unspecified)
(0.14)
0.24
(0.24)
Subtotal
97.66
101.64
101.45
(101.49)d
107.80
Energy and communications
funda
0 -
0
0
0
6.00
Revenue excluding borrowing
97.66
101.64
101.45
(101.49)
113
80
.
Borrowing
8.00
(7.56)
9.00
(9.20)
9.40
Domestic bonds
0
(0.25)c
4.00
4.20
4.00
Foreign loans
8.00
7.31
5.00
(5.00)
5.40
Total revenue
105.66
108.95
110.45
110
69
123
20
Revenue from domestic
funds
97.66
101.64
105.45
.
(105.69)
.
117.80
Revenue from foreign
loans
8.00
7.31
5.00
(5.00)
5.40
a. This is anew revenue source established in 1983 and scheduled to be maintained
throughout the remaining years of the Sixth Five-Year Plan at about 10 percent of existing
extrabudgetary funds held by local governments, central agencies, and individual enterprises.
Extrabudgetary funds were reported to total about 57 billion yuan in 1951.
b. The draft budget for 1981 was revised several times. In an early version, reoorted to
the National People's Congress on 30 August 1980, revenue from enterorise deoreciation funds wa,
planned at 2.10 billion yuan -- slightly lower than the 2.20 billion yuan figure given in the
draft budgets for 1979, 1980, 1982, and 1983.
c. This is our provisional estimate. For the first time since the 1950s, the PRC in 19S1
resumed the practice of issuing national bonds to help finance budget deficits and absorb exces
credit and currency in the economy (see the footnotes to Text Table 3). Bonds sales in 1981
totaled 4.87 billion yuan, of which 4.75 billion yuan was used to help offset the 1930 budget
deficit (see Appendix Table A.2). Bond sales in 1982 totaled 4.33 billion Yuan, of which 4.20
billion yuan was listed as a revenue item in the 1982 state budget. The excess of bond sales
over proceeds used in the budget totals 250 million yuan. This fioure is only 10 percent of th<
reported budget deficit of 2.55 billion yuan in 1981, leading us to speculate that to finance
the rest of the deficit the Ministry of Finance drew down its deoosits with the People's Bank o-
China or was granted another loan (i.e. an overdraft from the bank). However, the official
banking data (see Appendix Table A.5) show the ministry's deposits with the bank increasing in
1981 and no further overdrafts after 1980. We are presently unable to resolve this apparent
inconsistency.
d. Finance Minister Wang Binggian in his report last December on oreliminarv estimates fo
1982 and the draft budget for 1983 noted that, after deducting such non-comoarahle factors as
foreign loans and the new fund for energy and communications, revenues in 19S3 are planned to
exceed those of 1982 by 6.11 billion yuan, an increase of 5.8 percent.
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Billion current yuan
Total
1981 1.982 1983 1984 1985 1981-85
Draft Final Draft Pre . Est. Draft Draft Draft Draft
Expenditures
Capital construction, including
foreign loans
32.33
33.07
29.73
30.27
36.18
---70.48---
170.0
Direct appropriations
18.63
19.60
19.63
Energy and communications fund
0
0
0
0
6.50
Reserve funds
6.10
5.67
4.65
Foreign loans
8.00
7.31
5.00
5.00
5.40
Capital construction, excluding
foreign loans
24.33
25.76
24.73
25.27
30.78
Enterprise modernization
5.03
6.53
5.42
6.07
6.57
Enterprise working capital
(2.00)
2.28
2.40
2.30
2.25
Agriculture
7.41
7.37
7.61
7.65
7.75
---15.93---
38.7
Science, education, health,
and culture
15.95
17.14
18.00
19.00
20.4
---40.16---
96.7
National defense
16.67
16.80
17.87
17.87
17.87
---35.76---
88.3
Administration
5.97
7.09
7.80
8.00
8.50
---17.21---
40.8
Other expenditures
(20.30)
(21.22)
(24.62
22.53)
(26.68)
(175.3)
Debt service on foreign loans
4.97
5.10
24.3
Social welfare and pensions
2.40
2.40
General reserve fund
2.00
10.8
Other
(17.18)
Total expenditures
105.66
111.50
113.45
113.69
126.20
128.0 130.0
609.8
From domestic funds
q7.66
104.19
108.45
108.69
121.20
583.6
From foreign loans
8.00
7.31
5.00
5.00
5.00
26.2
1-.11 w1l"M111"Wip'"
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Million current yuan
1980 1981
I.? Source of Funds
A. Deposits 134,004 165,864 200,558
1. Enterprises 46,891. 57,309 67,407
2. Treasury (Ministry of Finance) 14,868 16,202 19,494
3. Capital construction units 13,130 17,175 22,915
4. Government department and organizations 18,488 22,945 27,488
5. Urban savings deposits 20,256 28,249 35,414
6. Rural deposits 20,371 23,984 27,840
B. Accounts with international monetary institutions -- 3,427 5,405
C. Currency in circulation 26,771 34,620 39,634
D. Bank's self-owned funds 42,788 47,733 49,705
E. Bank's current-year surplus 4,945 1,972 1,722
F. Other 7,752 8,810 7,762
Total sources of funds 216,260 262,426 304,786
II. Uses of Funds
A. Loans 203,963 241,430 276,467
1. Industrial production enterprises 36,309 43,158 50,885
2. Industrial supply and marketing enterprises and
material supply departments 24,212 23,603 24,124
3. Commerce 123,225 143,702 163,913
4. Short and medium term loans for buying equipment 792 5,550 8,375
5. Industrial and commercial loans to urban collective
and individual enterprises 5,751 7,829 9,915
6. Partial prepayments for advance purchases of
agricultural products 698 788 739
7. State farms 686 940 1,675
8. Rural communes and production brigades 12,290 15,860 16,841
B. Gold purchases 1,216 1,216 1,204
C. Foreign exchange purchases 2,058 -847 6,218
D. Balance with the International Monetary Fund -- 3,604 3,874
E. Credit advanced to the Ministry of Finance 9,023 17,023 17,023
Total uses of funds ~ ~ 304,786
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Appendix Table A.6
China: Loans and Other Uses of Funds of the State Bank, 1977-81
Million current yuan (year-end)
1977 9 8 1979 1980 198
Loans
A. Enterprise working capital 173,450 189,497 218,292 248,837
Commercial enterprises 99,700 111,770 123,225 143,702 163,913
Industrial enterprises 61,680 66,272 74,590 84,924
B. Short and medium loans for
purchasing equipment 0 0 792 5,550 8,375
C. Agriculture 11,550 13,674 17,588 19,225
Subtotal 166,300 185,000 203,963 241,430 276,467
D. Bank loans to the Ministry of
Finance (overdrafts) 0 0 ;9,023 17,023 17,023
Total loans 166,300 185,000 212,986 258,453 293,490
Other uses of funds
A. Purchases of gold 1,216 1,216 1,204
B. Purchases of foreign exchange 2,058 -847 6,218
C. Balances with the IMF 3,604 3,874
Subtotal 3,274 3,973 11,296
Total uses of funds 216,260 262,426 304,786
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China:
Appendix Table A.7
Deposits and Other Sources of Funds of the State Bank, 1977-81
Million current yuan (year-end)
1977
1978
19/9
1980
1981
Deposits
)
486)
(46
322)
(56
897)
(69
Financial
A
deposits
40,100
(45,680
,
,
,
.
Ministry
of Finance
18,740
14,868
16,202
19,494
Capital
construction units
10,960
13,130
488
1
17,175
945
22
22,915
27
488
Government agencies
15,980
8,
1
,
309
57
,
407
67
Enterprise deposits
B
38,500
36,850
46,89
,
,
254)
3
.
Other domestic deposits
C
27,800
30,900
(40,627)
(52,233)
(6
,
414
5
.
Urban savings deposits
13,510
15,490
20,256
28,249
,
3
840
7
Rural deposits
(14,290)
(15,410)
20,371
23,984
,
2
Savings deposits of rural
7
7
843
703
11
16,955
commune members
4,650
0
5,5
,
528)
12
,
281)
(12
885)
(10
Other rural deposits
(9,640)
(9,840)
,
(
004
4
1
,
864
165
,
558
200
its
d
ti
400
1
06
113,430
,
3
,
_
,
epos
c
Total domes
.
,
UT
3
D. Accounts with the World Bank and IMF
,
Other sources of funds
42
788
47,733
49,705
A. Banks' working funds
Additional budget appropriations
for banks' credit fund
,
1,275
Banks' retained profits
B. Banks' current-year surplus
4,945
47
733
1,972
49,705
1,722
51,427
Subtotal
,
752
7
8,810
7,762
C. Other (unspecified)
Other sources of funds, excluding
,
485
55
515
58
59,189
irculation
i
,
,
T
n c
currency
3
T9,67
in circulation
nc
C
D
19,540
21,200
4TT8-6-
urre
y
.
260
2T6
262
30
Total sources of funds
,
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Aopendix Table A.8
China: Direct and Indirect Indicators of Inflationary Pressure, 1978-85
Est. Plan Plan Plan
1978 1979 1980 1981 1982 1983 1984 1935
Official price indices (1977=100)
Retail price index 100.7 102.7 108.8 111.4
Cost-of-livinq index 100.7 102.6 110.3 113.1
Personal savinq deposits
(billion yuan)
Social purchasing power
(billion yuan)
Retail sales
(billion yuan)a
Currency in circulation
(billion yuan)
Ratio of retail sales to
currency in circulation
21.06 28.10 39.95 52.37
136.0 168.2 203.6 226.0 256.0 276.0 296
143.3 155.9 180.0 214.0 235.0 256.0 (300)
a. Inc1 ii inq peasant sales to nonagricultural residents.
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