G.F. 326
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7.
- 5-
(a) Excess demand over supply
The economy of China, like that of many
developing countries, is structurally prone to
inflationary pressures. On the supply side, China's economy has been able to achieve rapid growth in
(5)
industrial output (paragraph 3), but it has been much less successful in increasing the supply of a number of key
Also serious bottlenecks have agricultural products developed in such critical sectors as energy, industrial raw materials, transport and communication facilities. The growth rates of all these sectors have been significantly lower than that of gross industrial output in the past few years. Thus while the rapid growth in industrial output has alleviated in part the excess demand pressure in the economy, it has also at the same time aggravated the strains in various bottleneck sectors.
8.
On the demand side, there has been an unleashing
of purchasing power because of the very substantial increases in incomes. In the rural sector, especially in the more developed regions, the considerable increases in the prices of agricultural produce and in earnings from the sideline production have raised the incomes of rural
(6) population
In the urban sector, there have also
been substantial increases in both average annual
•
(5) During the four years between 1983 and 1987, the
growth rate in real terms of China's gross agricultural output was 5.9% per annum. But much of this growth was in cash or commercial crops. Grain output, at 400 million tonnes in 1987, was still lower than the record of 407 million tonnes achieved in 1984.
(6) During the four years between 1983 and 1987, per
capita income of the rural population increased by 10.5% per annum to Rmb 463 in 1987 from Rmb 310 in 1983.
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