CONFIDENTIAL
4.
However, progress in other areas has been slowed; price reform, slated to resume in 1987, has been further postponed; a trial bankruptcy law has been adopted but is not being implemented; the scope of share issues has been severely curtailed; on bond markets, promised secondary markets have not emerged.
5. In agriculture, there has been renewed emphasis on increasing
grain production and ensuring self-sufficiency. Freedom to diversify into producing cash crops has been restricted and prices paid by the State for grain raised. Food subsidies to consumers have been raised to prevent higher prices being passed on. Remaining problems include the tendency of peasants to spend their income on consumption (especially house-building) rather than on investing in land improvement and the decline in the area of cultivatable land as house and factory construction has expanded.
PERFORMANCE
6.
The overall economic performance in 1986 was respectable: the total social product (the gross output of agriculture, industry, construction, domestic trade and domestic transport) increased by
9.1%, national income (the net output of these five sectors) by 7.4%
and gross national product by 7.8%. (Real increases were several percentage points lower no GNP deflator is published in China).
7. On individual sectors, the grain harvest, at 391 million
tonnes, was greater than in any previous year except 1984, but there were decreases in the output of cotton and oil-bearing crops; the value of gross industrial value rose by 11.1% and almost all products showed increases in physical terms. Coal output was 870 million tonnes, steel 52 million tonnes and crude oil 131 million
tonnes. The retail price index increased by 6% (7% in urban areas
and 5% in rural).
8.
The value of exports increased by 13.1% to reach US $30.9bn and imports by 1.6% to reach US$42.9bn. The current account deficit was
US $8.3bn.
2
CONFIDENTIAL
/9.
No comments yet.
Private notes are available after approval.