CONFIDENTIAL
BRIEF 12.
COUNTRY ASSESSMENT PAPER: CHINA
SECTION I
1. China, which contains a quarter of the world's population, is a country of ancient culture, vast size and abundant resources, much still untapped. The erratic course of China's policies under Mao Zedong failed to consolidate the achievements of the early years of the revolution. Under the new leadership, China is committed to an ambitious modernisation programme designed, with the help of Western countries and Japan, to strengthen the country economically and militarily. China is a nuclear power and a permanent member of the UN Security Council. Although in many respects still backward, she is already a major factor in international relations and will grow in importance. Britain has a particular interest in the continued prosperity and stability
of Hong Kong.
2.
Food production has grown only slightly faster than the population, and China is still a net importer of grains and most Chinese live close to subsistence level. Cultivable land is scarce and technology backward. Many mineral resources (especially oil, coal and certain non-ferrous metals) can probably meet both domestic and export needs, but they await fuller exploitation. The main economic priorities of the present government are to develop energy resources, communications and light industry, while renovating existing industrial installations in an orderly
fashion.
3.
Chinese domestic policies are centred on an economic modernisation programme the key importance of which is emphasised by the Chinese leadership. The objective is by 2000 to quadruple the 1980 value of agricultural and industrial output. This programme requires large scale imports of advanced technology and greatly increased trade. Japan will continue as China's principal trading partrer, but there are significant commercial opportunities for other countries also. China's past record of prompt payment,
existing reserves and lack of debt will ensure that she can attract adequate credit for her modernisation programme. However
CONFIDENTIAL
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