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DSR 11C
programme, there is likely to be a steady increase in
the number of orders placed in the West from 1978
onwards for advanced machinery and technology.
34. The scale of this increase will depend on Chinese
ability to increase their hard currency revenues and the
willingness of the Chinese to use the large amount of
Western credit which would be available to them. Though
China's hard currency earnings should grow steadily in
coming years, no sharp increase seems likely in the
short term. Long term trade arrangements of the type
now being negotiated between China and Japan may help to
expand bilateral trade with countries willing to
conclude them. From the point of view of financing an
expansion of Chinese imports, oil is an important hard currency earner, and the Chinese have abundant reserves
(estimated at 70 billion barrels). However, the
characteristics of the oil make it difficult to market
abroad, and importing countries, particularly Japan,
are reluctant to invest in the necessary special
refining equipment. Moreover production and logistical
problems as well as rising domestic demand in China
will, inhibit rapid growth in the surplus available for
export. The remainder of China's export growth
potential lies in the extractive industries, those based
on agriculture, and light industrial goods. Neither of
the first two is amenable to rapid increases in output,
but there are better prospects for light consumer goods,
including oil-derived products such as man-made fibres
and plastics, particularly in Asian markets. Exports
into and through Hong Kong and invisible earnings there
/are
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