CONFIDENTIAL # *
Report on Developments in
Hong Kong
China Economic Relations
first quarter of 1987 -
General economic developments in China
Continuing the growth momentum built up in the
second half of 1986, China's industrial output again
recorded double-digit growth in the first quarter of
1987. At Rmb 226.7 billion (at constant 1980 prices),
industrial output in the first quarter of this year was
14.1% higher in real terms than in the same period last
year. This was only slightly below the year-on-year
growth rate of 15.9% in real terms in the fourth quarter
of 1986. To some extent, the growth rate in the first quarter of 1987 was exaggerated by the low base of comparison in the first quarter of 1986, when the value of industrial output was only 4.4% in real terms higher than
in the first quarter of 1985. Nevertheless, there are
concerns that the Chinese economy may once again become overheated, putting pressure on the bottleneck areas like energy, transport and communication, and industrial raw
materials.
2.
Within the industrial sector, light industries
grew slightly faster than heavy industries in the first quarter. On a year-on-year comparison basis, the output
value of light industries increased by 14.9% in real terms
in the first quarter of 1987, to Rmb 115.5 billion (at
constant 1980 prices), while that of heavy industries
increased by 13.3% in real terms, to Rmb 111.2 billion (at
constant 1980 prices). As regards the performance of
individual industries, the rates of increase in the output
G.F. 326
CONFIDENTIAL #