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CONFIDENTIAL # 2

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of 1988, from 18% in the third. The fourth quarter of 1988 was the ninth consecutive quarter in which the year-on-year growth rate of gross industrial output exceeded 13% in real

(2) terms and there was no sign of China's industrial

growth slowing down throughout 1988.

4 .

In 1988 the growth rate of industrial output produced by state enterprises (12.7%) was significantly slower than that of total industrial output (17.7%). Output produced by collectives (including township enterprises but not village-run enterprises) increased at a much faster

rate, of 28.8%. In 1988 state enterprises accounted for 64% of the total industrial output and collectives 32.6%.

5.

Reflecting rapid growth in the exports of some

(2)

Gross industrial*

output (Rmb bn)

Year-on-year growth rate

(8)

1986 Q1

198.7

4.4

Q2

229.8

5.3

Q3

223.6

8.8

Q4

247.6

18.1

Annual

899.7

9.2

1987 Q1

226.7

14.1

Q2

266.0

15.7

Q3

259.3

15.9

Q4

279.1

12.7

Annual

1,031.1

14.6

1988

Q1

264.6

16.7

Q2

312.7

17.6

Q3

305.9

18.0

04

330.3

18.3

Annual

1,213.5

17.7

* At constant (1980) prices, excluding output from

village-run enterprises.

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CONFIDENTIAL ##

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