CONFIDENTIAL
ANNEX A
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China has great natural energy and mineral resources and steadily improving agricultural productivity, although the development of infrastructure and industry is still backward and GDP per head very low. Her present share of world trade is relatively small increased from 0.75% in 1978 to 1.23% in 1983. But China has demonstrated the will and capacity to expand rapidly. She has announced the target of quadrupling output in both industry and agriculture over the last 20 years of this century. The current five year plan envisages that exports (of particular importance as a means of earning foreign currency) will grow at an average annual rate of 8.1% up to 1985). The IMF forecast that China's exports will grow at an annual rate of 10.5% between 1982 and 1985 and at 9.1% between 1984 and 1990. The emphasis will be on textiles, light industrial products and 'artistic items'. China, having grown from a small base only a few years ago, is now the third largest supplier of textiles to the UK and our sixth largest clothing supplier. She is therefore arguably already a "dominant supplier" alongside Hong Kong, South Korea, Macao and Taiwan. The five-year plan also refers to improving the technical level of machinery and electrical products
CONFIDENTIAL