CONFIDENTIAL # 3
3
-
This
for the first quarter of 1986 were 16.2% and 26.5%. declining trend, if continued, could have adverse implications for productivity growth in the agricultural
sector.
T
!
5.
More emphasis on increasing grain production and agricultural investment is also one of the amendments recently made to the Seventh Five-Year Plan.
Apart from this and some minor revisions to the target growth rates for a few economic sectors, the final version of the Seventh Five-Year Plan, which was approved in the fourth session of the Sixth National People's Congress in April 1986, is basically the same as that proposed by the Central Committee of the Chinese Communist Party (CCP) at its special conference in September last year. (The details of the Seventh Five-Year Plan were given in CRC INF 6/86 (CEC 2/86)).
6.
Although grain production was given greater attention recently, it is unlikely that the Chinese government will backtrack on its policy of rural diversification into non-farm activities. It is likely that rural industries and other non-agricultural enterprises will continue to be developed in order to absorb the surplus labour and to raise the level of output in the rural areas. However, the Chinese Government also recognises some of the problems posed by these rural/township industries. First, some of these enterprises compete with the state sector for energy and other essential raw materials. Second, the excessive investment undertaken in the latter half of 1984 and in 1985 was due, in part, to projects undertaken by these enterprises using bank loans and independent funds. То strengthen state control over these funds, as from this year, collective and individual investment will be incorporated into the overall state plan for investment in