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2

the corresponding period in 1984, the growth rate

decelerated from 23.1% in the first half of 1985 to 17.3%

in the third quarter and further to about 10% in the

fourth quarter.

3.

Analysed by individual industries, the pattern of growth varied. Throughout 1985, the highest growth

rates in output were recorded for consumer durables like colour television sets, househola refrigerators and electric fans. The supply of key industrial raw materials

and energy, on the other hand, remained insufficient as

the rapid economic growth led to a rapid increase in

demand for them

(2)

4.

Notwithstanding that telecommunications and

transport remained two major bottlenecks in 1985, some notable developments have taken place with respect to port development. Six modern container berths, built with loans from the World Bank, are reported to have been brought into operation in China's three large harbours in Guangzhou (Huangpu), Shanghai and Tianjin by the end of 1985, adding an annual cargo handling capacity of 600,000 TEUS. But the Chinese ports generally are still handicapped by low operating efficiency and poor

management

(3)

Also the communication links between

these ports and their respective hinterlands are far from

adequate.

(2) In 1985, the output of pig iron and steel increased

by 9% and 8% respectively, of crude oil by 9% and of electricity also by 9%. These growth rates, while significant, are still modest when compared with the growth rate of industrial output, at 18%.

(3)

A recent visit by Economic Analysis Division Officers to Huangpu's new container port revealed it was working well below capacity.

CONFIDENTIAL # 3

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