Transport
"I will not learn to ride a winged horse,
Fearing it will leave me to weep at a lonely roadside. " (Juan Chi, 210-263)
Communications have been greatly expanded but remain under-developed in relation to China's size. Railways serve the main industrial centres and ports. The network is most developed in the cast and northeast, but important extensions have been built to the western regions. By the end of 1984, the total track length was more than 52,000 kms compared with 22,000 kms in 1949. The road system has also been expanded. The nation- wide highway length was 926,746 kms at the end of 1984 compared with 81,000 kms in 1949. Inland waterways are also an important feature of China's transport system totalling 109,000 kms. The Changjiang (Yangtze) is navigable for 2,500 kms up to Chongqing. The Grand Canal is the major north-south waterway linking Hangzhou and Tianjin. China's civil aviation routes cover 260,200 kms; 107,400 km of these are international. Half of freight traffic is carried by rail and 18% by water.
Foreign Trade
"The Chinese merchants are eager to have dealings with foreigners." (Anon, 1838)
China's trade with the outside world expanded greatly during the 1970s. It is predominantly with non-communist countries, Japan, Hong Kong, the United States and West Germany being China's main trading partners. China's exports in 1985 were US $27.4 billion, imports US $42-3 billion, increases in value terms of 5% and 54% from 1984 levels. The resulting visible trade deficit of almost US $15 billion is a serious problem which has led to attempts to control import growth and improve export performance. Foreign exchange reserves, though reduced, remain at a sound level. China's principal exports are food, raw materials, fuels and light manufactured goods, particularly textiles. Exports of crude oil and oil products have increased sharply since 1983 and account for about a quarter of export earnings: falling prices will make increases in total receipts difficult to achieve. UK exports to China were US $514 million in 1985, imports US $399 million. (1984 levels were US $424 million and US $372 million respectively).
Over the last two or three years China has sought to introduce more flexibility into her foreign trade operations, allowing greater scope to the provincial level. Selected provinces, cities and even enterprises have been given varying powers to engage in commercial activities with foreign business concerns. Their activities are subject to overall supervision by the Ministry of Foreign Economic Relations and Trade. Many of these decentralised powers have been taken back by the centre, and various controls placed on imports, particularly of consumer goods, following the problems of 1985. The Bank of China has greatly expanded its overseas operations in recent years.
The China International Trust and Investment Corporation (CITIC), established in 1979, promotes joint ventures with foreign companies for the manufacture of products mainly for export. Areas in Guangdong and Fujian provinces have been designated Special Economic Zones (SEZs) for the establishment of joint ventures and other export-oriented industries, although joint ventures are not confined to these zones. Fourteen major coastal cities and several coastal areas were ‘opened' up to foreign businessmen and investors in 1984 and 1985. A law adopted in 1979 laid down the basic framework for joint ventures. Since then regulations have been promulgated on taxation and on the operation of the SEZs in Guangdong and Fujian. The Shenzhen SEZ (adjacent to Hong Kong) has grown rapidly since 1978, but foreign investment has favoured hotel and property development rather than industry. The Chinese have been disappointed by low levels of foreign direct investment and its limited contribution to production for export. Foreign investors have experienced many difficulties in China, including problems with repatriation of profits in hard currency.
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