CONFIDENTIAL **
3
desired. There have been numerous reports that many
of the locally produced industrial products do not
even satisfy the minimum standards set by the
state
(3).
In an attempt to upgrade the quality of
light industrial products, the Chinese authorities have decided to invest more than Rmb 1.2 billion (US$
0.3 billion) for technological revamping in
industries including food processing and household
electrical appliance industries. The Chinese
government has also emphasized the need to improve labour productivity and to reduce material
consumption and operating expenses through
rationalizing the pattern of capital investment and
foreign exchange spending
(4).
Without an
improvement in economic efficiency, the high growth
rates merely reflect quantity increases in output
which exert additional pressure on the scarce
resources available, rather than genuine improvements
in living standards.
(3)
(4)
As an illustration of the seriousness of the problem, in a recent market survey conducted in Chengdu, it was found that 75% of the medium to low grade tape recorders sold on the market did not meet the minimum standards specified by the state. In a survey of aluminium products undertaken by the State Economic Commission last year, the percentage of failures was found to be as high as 61.3%.
It was planned that labour productivity would be raised by 4% in 1987. Consumption of materials was to be reduced by 2% and overall operating expenses cut by 10%. However, apart from issuing policy guidelines in very broad terms, the Chinese authorities gave no details of how the above targets were to be achieved.
G.F. 326
CONFIDENTIAL # 3