F
8.
One favourable development arising from the rapid economic growth was the massive increase in tax
revenue. In the first eleven months of 1985, state
revenue grew by 34.8% to Rmb 168.5 billion, restoring a balance between expenditure and revenue. In 1984, the
deficit was as much as Rmb 5 billion.
9.
The imbalance in the external sector still featured as a serious problem in China's economy in the fourth quarter of 1985, though the situation appeared to have stabilizea. According to the figures released by the Chinese Customs Administration, the value of exports in the fourth quarter of 1985, at US$8.5 billion, and that of imports, at US$13.4 billion, were both roughly the same as in the fourth quarter of 1984. However, for the year as a whole, the value of imports, at US$42.3 billion, far exceeded the value of exports, at US$27.4 billion, resulting in a visible trade deficit of about US$14.9 billion. In 1985 the growth rate in value terms of
exports was 5%, and for imports, 54%.
10.
-
However, figures released by the Ministry of Foreign Economic Relations and Trade (MOFERT) - which are considered less reliable for the purpose of macroeconomic analysis indicate a much smaller visible trade deficit
of US$7.6 billion for 1985. Moreover the MOFERT figures suggest a sharp deterioration in the visible trade balance in the second half of the year because the deficit for the first half shown by its figures was only US$2.16 billion. On MOFERT figures, for 1985 as a whole, the value of imports, at US$33.4 billion, and that of exports, at US$25.8 billion, were 32% and 6% respectively higher than in 1984.
CONFIDENTIAL 3
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