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level of the industrial sector as a whole. The programme
still requires large scale imports of advanced technology
and a greatly increased balancing flow of export. China's
past record of prompt payment, and the relatively modest
external debt and debt service ratio has meant that there
have so far been no difficulties in attracting adequate
credit for her modernisation programme. China herself is
concerned to avoid becoming over-committed, and will seek to
use counter-trade and other cooperative arrangements to
conserve foreign exchange where possible.
3. Economic development has not followed a smooth path.
Agricultural reform based on the redistribution to peasant
households of collectively owned land has led to a
significant increase in the food production. But continued
development will be more difficult. Cultivable land remains
scarce and farming technology is backward. Mineral
resources (especially oil, coal and certain non-ferrous
metals) could meet domestic demand and support foreign
exchange earnings, but infrastructive problems and energy
shortages have resulted in production stoppages due to the
development of the energy sector, communications
infrastructure and modernisation of industrial enterprises
are high priorities.
4.
China's foreign policy, marked by an emphasis on
China's "independence", is concerned to contain the spread
of Soviet and US influence and power, particularly in Asia.
Another key element has recently been the need to develop
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