TNAG-1873-FCO40-2661-Relations-between-Hong-Kong-and-China-1989 — Page 227

G.F. 326

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24.

- 15

To the general public, the main concern is the increase in the retail prices of foodstuffs and consumer goods. According to a study done by the Institute of Economics at China's Academy of Social Sciences

(CASS)

(17)

/

food expenditure is about 55% of personal

The Chinese authorities have, on consumption in China.

many occasions, reiterated that the rate of price

If the increases would not exceed that of wage increases. official statistics are a accurate reflection of the real situation, this principle does appear to have been adhered to. Between 1983 and 1987, the average wage of workers in the state enterprises rose by 14% per annum (footnote (7))

However, apart while the average inflation rate was 6%.

from the usual doubts about the official inflation rate, these average figures also mask considerable differences among individuals and regions. With the adoption of the 'contract responsibility system' in many sectors of the economy, the distribution of income has become more uneven. Those whose income are fixed or increasing only moderately will be more severely hurt by rising prices

(17) This study also suggested that while China may be

poor - as its per capita GNP of US$278 in 1987 was well below the US$1,000 minimum standard set by World Bank for economically underdeveloped countries - the Chinese people eat and dress well, better in fact

The than most of the world's developing countries. per capita consumption of grain, meat and fibre can be taken as indicators.

Per capita consumption of

China

(1986)

Grain (kg.)

391

Meat (kg.)

17.5

Fibre (kg.)

10.6

Average level of developing

countries

(Forecast level

for 1990)

232

13.9

3.8

* Including pork, beef, mutton and poultry.

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