developed since 1949. The rate of industrial growth averaged about 10% per year during the 1970s.
The northeast region is well supplied with iron and coal. In addition to the great iron and steel complex at Anshan, the industrial complex at Shenyang and the oilfield at Daqing, new enterprises have been established at Changchun (motor vehicles) and Harbin (electrical equipment and machine tools). Peking and Tianjin are the major centres in the northern region for machine building, but important new industrial areas have been developed at Taiyuan, Jinan (diesel engines and machine tools), Luoyang (tractors and mining machinery), and Zhengzhou (textiles). In east China, Shanghai is still the largest engineering centre and has become an important steel centre. New iron and steel combines have been established at Wuhan in central China, and at Baotou in Inner Mongolia. A third has been started at Baoshan near Shanghai, but the second phase of this project was, suspended for a time in line with the readjustment. In the southwest the principal industrial centres are Chongqing (machine building and iron and steel), and Chengdu (machine tools). Industrial development in the northwest is concentrated mainly at Lanzhou (oil refining, oil equipment and chemicals), and Xi'an (electrical equipment). Light industry is concentrated in the coastal areas. New factories have been set up for the production of textiles and other light industrial goods at inland cities such as Xi'an and in the last few years in the new Special Economic Zones in Guangdong and Fujian provinces.
Total industrial output value in 1985 (including village industries) reached 969 billion yuan, 21.4% more than 1984. Light industrial output value was 409 billion yuan (18.1% growth); heavy industrial output value 467 billion yuan (18% growth). The planned growth target for total output value for 1985 was 8%. Shortfalls in energy production, despite a recent upturn in coal and oil production, are a serious problem for China's planners in view of the growth of domestic energy consumption and the significance of energy exports in the past for hard currency earnings. But in the longer term China's position is favourable and she should retain her self-sufficiency in energy supplies. From 1990 it is hoped that oil production will increase as off-shore fields are developed. 18 contracts with 27 foreign companies have been signed to explore for oil in the South China Sea, Yellow Sea and the Beibu Gulf. In May 1983 the first contract areas were awarded in the Pearl River delta to a BP-led consortium. The first exploratory wells were sunk in the same year. Initial results however have not been encouraging and the willingness of foreign companies to undertake exploration has been affected by the recent fall in oil prices. It is also planned to double coal production and to increase hydroelectric power production. The potential for expansion of both is great. The Chinese have begun the construction of a nuclear power plant southwest of Shanghai. Negotiations are being conducted with foreign companies on the construction of a nuclear power station at Daya Bay in Guangdong province, which would also provide energy for Hong Kong.
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Because of its greater complexity, it has proved more difficult to apply the reform principles to industry than it has to agriculture. The progress of industrial reform has been uneven but generally there has been a relaxation of central planning controls over industrial enterprises and a reduction in bureaucratic interference. Enterprises are now able to retain a proportion of their profits which they can use to improve the welfare of employees or to increase production. They can use resources now at their disposal to operate in the market, either as buyers of raw materials or to sell their own products. Within enterprises, managers are given greater authority and are given more say in deciding upon bonus payments, size of the work force and appointments and dismissals. A reform in the wage system is also aimed at increasing material incentives and ending egalitarianism. Enterprises are to become independent accounting units working on economic principles rather than links in an administrative chain of command with little incentive to make a profit or meet the needs of
consumers.
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