CHINESE ECONOMIC GAINS IN 1971
Document Type:
Collection:
Document Number (FOIA) /ESDN (CREST):
CIA-RDP85T00875R001700030009-8
Release Decision:
RIPPUB
Original Classification:
S
Document Page Count:
16
Document Creation Date:
December 22, 2016
Document Release Date:
January 18, 2011
Sequence Number:
9
Case Number:
Publication Date:
January 1, 1972
Content Type:
IM
File:
Attachment | Size |
---|---|
![]() | 748.93 KB |
Body:
Sanitized Copy Approved for
Release 2011 /01 /18
CIA-RDP85T00875R0017000
Sanitized Copy Approved for
Release 2011/01/18:
CIA-RDP85T00875R0017000
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
-Chinese Economic Gains in 1971
Secret
ER IM 72-9
January 1972
Copy No.
d5
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
GROUP 1
included from automatic
downgrading and
dedmtificnltan
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
January 1972
INTELLIGENCE MEMORANDUM
CHINESE ECONOMIC GAINS IN 1971
Highlights
1. The economy of the People's Republic of China (PRC) advanced
strongly along a broad front in 1971, the first year of the Fourth Five-Year
Plan. The political turbulence of the last four months of the year, which
involved the status of Defense Minister Lin Piao and several other top
military leaders, had no discernible effects on economic activity.
2. Industrial output in 1971 rose by 10% to 12%. In addition to
substantial gains in steel, petroleum, and other basic industrial products,
striking advances were made in the production of a wide range of military
weapons, including missiles, jet aircraft, and submarines.
3. Agriculture continued to benefit from increased inputs of fertilizer
and equipment from the industrial sector. The effect of this rise in inputs
was offset, however, by above-average trouble with floods, droughts, and
insect infestations. As a result, agricultural output was about the s, me as
in 1970.
4. Foreign trade continued to be the source of advanced equipment
and technology at the leading edge of China's indus'rialization drive. Exports
went up more than imports in order to compensate for the imbalance that
had arisen in 1970.
5. China's gross national product (GNP) rose by about 5% in 1971,
to a level of about US $130 billion, or $155 per capita. Living standards
improved in a number of small ways even though the leadership remained
firmly dedicated to military-industrial expansion as the priority task of the
economy.
Note: This memorandum was prepared by the Office of Economic Research and
coordinated within the Directorate of Intelligence.
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
Discussion
The Period 1970-71 in Perspective
6. Since the waning of the Cultural Revolution in 1969, the PRC
has enjoyed two years of moderation in economic policy and of rapid
advance in national output. As Premier Chou En-lai explained in a speech
on the eve of National Day in 1970, the year 1970 was designed to be
a strong base from which a new Fourth Five-Year Plan (1971-75) would
be launched. In 1970 the badly shaken economic management apparatus
was put back isr order. An extraordinary rise in industrial production of
about 17% was achieved as new productive capacity - constructed during
the chaotic days of the Cultural Revolution - came into full use.
Furthermore, a combination of good weather and stepped-up inputs of
fertilizer and equipment resulted in record-breaking output in the
agricultural sector in 1970.
7. The economy continued to gain momentum during 1971,
especially in industry and construction.* The overriding national priority
of military-industrial expansion was maintained, and capacity cnd output
in basic industrial materials, heavy machinery, and armaments grew at a
lively pace. At the same time, small improvements were made in the living
standards of China's large and rapidly growing population, which has
probably passed the 850 million mark.
8. In 1971 the Peking propagandists hammered away at the
distinction between two lines - the bourgeois line, which emphasizes
material incentives, self-interest, and elitist technical expertise, and the
revolutionary line, which emphasizes spiritual incentives, class interests, and
self-reliant innovation. Speed-up campaigns continued to be front page news.
In the longstanding "learn from Ta-chai" campaign, the agricultural sector
was enjoined to emulate the tireless workers of the Ta-chai production
brigade, and in the "learn from Ta-ch'ing" campaign, the industrial sector
was enjoined to emulate the equally tireless workers of the Ta-ch'ing oilfield.
9. Notwithstanding this barrage of radical propaganda, the working
policy in the economy in 1971 was a policy of moderation. For example,
the program of establishing small and medium-size plants in local areas seems
to have been pushed carefully in order to avoid the large-scale pre-emption
of labor and raw materials that resulted from the crash programs of the
Leap Forward. As a second example of moderation, the permissive policy
toward private plots, handicrafts, and petty trade continued in the
agricultural sector.
For key economic series for the PRC, 1952 and 1957-71, see the Appendix.
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
10. There is no evidence that the mysterious political events of the
last four months of 1971, which centered around the status of Defense
Minister Lin Piao and several other high-ranking military officers, had any
appreciable spillover into the economy, even though the failure of the regime
to publish any details on the Fourth Five-Year Plan may be partly
attributable to the leadership's preoccupation with the political crisis. In
1971 the representatives of the People's Liberation Army (PLA), who had
been stationed in economic bureaus and factories as a stiffening element
during the Cultural Revolution, began to be withdrawn as part of the trend
~o reduce the greatly enhanced authority of the military establishment. The
need for the military presence in any case had been greatly lessened by
the return of the civilian bureaucracy to normal operation.
Industry in 1971: Solid Gains
11. Industrial output in the PRC in 1971 unquestionably rose by a
substantial amount. The problem is how much. Yearend percentage claims
made in the official press are as follows:
Officially Claimed
Percentage Increase
in 1971
Iron ore 26.1
Pig iron 23
Crude steel 18
Rolled steel 15
Crude oil 27.2
Coal More than 8
Cement 16.5
Chemical fertilizer 20.2
Machine building output 18
Mining equipment 68.8
Metallurgical equipment 24.7
Farm machinery 21
a. This percentage c airs is lower tan t e per-
centage implied by the production estimates in the
Appendix, in part because of differences in the
method of measuring output.
12. The yearend claims included only one absolute figure for
industry - 21 million metric tons for steel. This figure is consistent with
the previous claim made for 1970 of 18 million tons in view of the known
rapacity of the industry, the strong demand of the industry's major
consumers - construction, the heavy machine building sector, and the
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
armaments industry - and the concern shown by Peking to obtain sufficient
supplies of raw materials for the industry.
13. The government's claim of an advance in coal production of more
than 8% suggests that output may have risen from 300 million to 325 million
tons. In mid-January, Peking issued a separate statement about electric
power, claiming an all-time record for 1971, with production up 18%. The
estimates in the Appendix - 60 billion kilowatt hours for 1970 and 70
billion for 1971 - are consistent with this claim. The petroleum industry,
one of the PRC's highest priority industries, produced an estimated 23
million tons of crude oil in 1971 compared with 18 million tons in 1970,
or an increase cf more than 25%. Overall production of fuels and power
went up by about 14% if these specific estimates are accurate.
14. Machine building could have gone up by as much as the claimed
18% because capacity in the industry was being steadily expanded in 1971,
from both domestic and foreign sources. The claim of a 68.8% increase
in mining equipment appears high but could be explained on several
grounds - for example, the selection of a narrow band of fast-growing items
in order to show the highest rate possible.
15. In contrast to the widely publicized gains in heavy industry, light
industry showed much smaller advances in 1971. Cotton textile production
probably was about the same in 1971 as in 1970 because raw cotton
production fell off and the above-normal inventories of raw cotton
accumulated in 1967-69 presumably have been drawn down. Other branches
of light industry reflected the general low priority of the sector and the
disappointing year in agriculture, which supplies perhaps three-quarters of
the raw materials for the sector.
16. The overall advance in industrial production in the PRC in 1971
thus was probably 10% to 12%, to judge from preliminary and fragmentary
evidence. The rate almost certainly was a cut below the 17% gain estimated
for 1970 when there was considerable slack to be taken up in the industrial
sector and when agriculture was having a banner year. The most telling
signs that industry was more taut in 1971 were growing stringencies in
raw materials. For instance, China had to import a half million tons of
pig iron in 1971 whereas in 1970 it imported only 30,000 tons.
17. A major feature of industrial growth in 1971 was the substantial
increase in the volume and technological sophistication of military
production. An increasing proportion of China's industrial energies is going
to missiles. Four ballistic missile systems, ranging from medium to
intercontinental, are at various stages of development, production, or
deployment. Aircraft production in 1971 included about 25 TU-16 jet
medium bombers, 600 MIG-19 and 50 MIG-21 jet fighters, and 100 F-9
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
jet fighter-bombers. Naval construction featured the continued expansion
of the submarine, main surface - several cruise missile destroyers are now
under construction - and guided missile patrol boat forces. Production of
ground weapons included tanks, a widening variety of artillery, and small
arms. China's progress in developing and producing weapons of Chinese
design has been greater than anticipated.
18. An additional feature of industrial growth in 1971 was the
increasing prominence of small and medium-size plants in local areas. For
several years, Peking has been endeavoring to give agriculture more support
without further commitment of centrally controlled resources. The resulting
campaign envisioned the establishment of several hundred small local plants
designed to make use of local labor, raw materials, and transport and
featuring the production of chemical fertilizer, cement, simple steel
products, and basic machinery items, especially farm equipment. In its
yearend statistical announcement, Peking claimed that 60% of chemical
fertilizer output and 40% of cement output were accounted for by small
plants; no doubt, these percentages would be considerably lower if adequate
account were taken of differences in quality.
19. So far, the small plants campaign has avoided the gross excesses
of the Leap Forward campaign (1958-60), which spawned thou?ands of
jerry-built plants and wasted untold labor and materials. Nevertheless, the
small plants program must have contributed to the general tightening of
raw materials felt throughout industry in 1971. On balance, the small plants
make good sense economically because a large portion of the labor and
materials used has no good alternative employment. Moreover, the small
plants increase the pace at which the hinterland is being modernized and
fortify the regime's policy of discouraging movement to the big cities.
Thousands of middle-school graduates from major urban areas are being
posted to jobs in these new plants.
Construction: A Dynamic Sector
20. Construction of new industrial and military facilities proceeded
at an impressive rate in 1971. Among the major plants under construction
are several petroleum refineries, major new shipyards, large plants associated
with the production of nuclear weapons, and a large new aluminum plant.
In addition to these plants there are believed to be a number of construction
projects, including nearly a 'dozen major complexes, each of which is spread
over several square miles of mountainous terrain in the interior. Some of
these complexes probably belong to the machine building industry, and
all will add to China's steadily growing military strength. The construction
of small plants, another important activity in 1971, has been covered above.
21. China has continued to push its massive underground construction
program, a program which entails enormous costs in construction materials
- 5 -
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
and labor. The Chinese are building "hardened" facilities to protect aircraft,
naval vessels, and petroleum stores. Civil defense construction is nationwide.
In October 1971, Premier Chou En-lai, in sketching China's defense
preparations for some visiting Americans, said:
What should we do? We are ready. We must dig underground
tunnels, and this has been done in every big and small city!
In some major cities the Chinese are even going to the extreme of building
reinforced concrete tunnels that lead from the center to the outskirts of
town.
22. In transportation, the Chinese are continuing to push development
of their rail system and their network of jet-capable airfields. Most of the
new rail construction projects are located in the rugged central and
southwestern areas of China where many of the new industrial projects
are being built. Airfield construction, on the other hand, is centered largely
in the eastern half of the country where most of China's population and
industrial centers are located.
Agriculture: Mediocre Year
23. In contrast to the striking successes in industry and construction,
agriculture in the PRC experienced a mediocre year in 1971. Our preliminary
estimate is that total grain output - by far China's most important
agricultural item - was little changed from the 1970 level of 215 million
to 220 million tons. The increase claimed by Peking at yearend is suitably
modest - from 240 million to 246 million tons. The failure to increase
agricultural output substantially is a thinly veiled disappointment to the
Chinese leadership, which had provided the countryside with increased
inputs of fertilizer and equipment and had arranged for further increases
in double cropping. Furthermore, a small diversion of cotton acreage to
boost grain production, plus poor weather, forced the output of raw cotton
down somewhat from the 1970 level.
24. The effect of the additional resources put into agriculture in 1971
was offset by severe floods, droughts, and insect infestations. Of course,
these negative forces are present to a greater or less degree in various regions
of China every year, but since the disaster years of 1959-61, the PRC had
enjoyed generally favorable we..ther for nine straight years. Even though
Peking bravely talks of 1971 as "the tenth successive good year" in
agriculture, the year was mediocre, and further information could even
confirm a decline in production.
New York Times, 7 October 1971, p. 4.
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
25. In spite of the disappointing agricultural performance, imports
of grain declined to 3.2 million tons in 1971, considerably below the 4
million to 5 million tons that had been imported in recent years. In its
yearend economic statement, Peking claimed that food stocks were built
up in 1971. In any case the PRC has the financial resources to restore
the old level of grain purchases if needed.
Foreign Trade: Restoration of Balance
26. China's foreign trade increased by an estimated 5.6% in 1971,
to $4.5 billion (exports plus imports). Practically all the increase was on
the export side as Peking moved to offset the imbalance caused by the
sharp rise in imports of the preceding year. China has been following a
successful policy of avoiding long-term debt, in contrast to other large less
developed countries - such as India, Pakistan, Indonesia, and Egypt -
which are staggering under a heavy burden of external debt. China's reserves
of gold and hard currency at yearend 1971 amounted to about
three-quarters of a billion dollars, entirely adequate given China's current
volume of trade and the absence of long-term obligations.
27. The direction and commodity composition of foreign trade in
1971 followed the pattern established in the 1960s. Eighty percent of
China's trade continues to be with non-Communist nations. Japan alone
continues to account for 20% of total trade. In 1971, China once more
ran a heavy deficit in its Japanese trade, with exports to Japan of $300
million falling far short of imports of $600 million. In contrast, China had
net earnings of about $700 million in hard currencies from its dealings
with Hong Kong in 1971:
about $425 million from provisioning Hong Kong with
food, water, and other goods;
about $100 million from exports to Hong Kong that
are re-exported to third countries; and
about $175 million in remittances from overseas
Chinese and in profits of PRC-owned enterprises.
28. Trade with the USSR in 1971 is tentatively estimated at $130
million, or about three times the $45 million level of 1970. Sino-Soviet
trade thus remains less than 3% of total Chinese trade, a far cry from 1959,
when this trade was $1 billion in each direction and represented one-half
of China's total trade.
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
29. Trade with the United States consists primarily of purchases by
US tourists and importers of Chinese luxury products through sellers located
outside the PRC. China is taking some advantage of US technology but
so far only through third-party transactions - for example, the purchase
of British and Italian equipment with US components. Prospects for sales
of US machinery and technology to China are limited by the existence
of well - established sources of supply in Japan and Western Europe.
Nonetheless, certain high-technology US products, such as oil-drilling
equipment, truck-manufacturing equipment, long-range aircraft, and
advanced computers, could become of interest to Peking.
30. China's exports in 1971 continued to feature textiles, foodstuffs,
and raw materials. The main imports were grain, chemical fertilizer,
industrial raw materials, and machinery and equipment. A large part of
the machinery and equipment - which includes transport equipment,
instruments, precision machine tools, construction equipment, electronics
end items and production equipment, and equipment for complete plants -
is at the cutting edge of China's technology. China retains its ultimate aim
at being self-sufficient in industrial goods and technology. The damage to
its scientific and educational establishment caused by the Cultural
Revolution has postponed the date when this aim can be realized.
31. In foreign military and economic aid, the year 1971 was only
slightly less spectacular than 1970. A record $700 million in economic aid
was extended to non-Communist less developed countries in 1970; in 1971
this figure was just under $500 million. Actual expenditures, however,
jumped from $55 million in 1970 to roughly $125 million in 1971.
Considerable effort was pumped into China's single largest aid project, the
$400-million railroad that will connect Zambia's copper belt to the
Tanzanian port of Dar es Salaam. Fifteen thousand Chinese technicians and
laborers are currently working or, this project. Aid to Hanoi ir. 1971 seems
to have remained at about the $200-million level, half military and half
economic.
Population: No Respite
32. The present period of economic moderation furnishes a favorable
climate for the renewed population control campaign. The campaign itself
is a mixture of administrative pressure for later marriages,* provision of
contraceptive chemicals and devices and instruction in their use, greater
availability of abortion and sterilization, and threats to cut off welfare
benefits beyond the second or third child. So far, the population control
? The ages advocated as the normal ages for marriage vary, but a typical
announcement will call for men to marry at 30 instead of 25 and women at 25 instead
of 20.
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
campaigns instituted by the PRC have not made an appreciable dent in
the population structure because they have been (a) intermittent, (b) largely
confir -d to the urban 15% of the population, (c) lacking in trained
personnel and reliable materials, and (d) contrary to deep-seated social
traditions.
33. In 1971 the government moved to overcome some of these
deficiencies - but not on a high-priority basis. The thousands of "barefoot
doctors" - youthful paramedics in rural areas who can treat minor ills and
screen for major ills - are apparently being employed to an increasing degree
to spread birth control knowledge to the countryside. At the same time,
the activities of the barefoot doctors could well lead to improvements in
public health that will more than offset the effects of their birth control
efforts.
34. Public propaganda in 1971 continued to stress antinatalist themes.
In an interview with a Cairo journalist, Chou's right-hand man for economic
administration, Li Hsien-nien, sounded such a theme and followed up with
some unprecedentedly frank remarks on the different estimates of
population held within the Chinese bureaucracy:
We have been racing against time to cope with the enormous
increase in population. Some people estimate the population at
800 million and some at 750 million. Unfortunately, there are
no accurate statistics in this connection. Nevertheless, the officials
at the supply and grain departments are saying confidently, "The
number is 800 million people." Officials outside the grain
department say the population is "750 million only" while the
Ministry of Commerce affirms that "the number is 830 million."
However, the planning department insists that the number is "less
than 750 million." The Ministry of Commerce insists on the bigger
number in order to be able to provide goods in large quantities.
The planning men reduce the figure in order to strike a balance
in the plans of the various state departments.*
We think the population is 850 million and growing at 2% a year;
nonetheless, figures of 50 million or 100 million less are often given and
cannot be disproved. The population series used in our reports is one
developed by the US Bureau of the Census and is based on:
acceptance of the 583 million total reported in the Chinese
census of 1953; and
* Cairo AI-Jumhuriyah in Arabic, p. 9, as reported in FBIS Daily Report: People's
Republic of China (FBIS-CHI-71-238), 10 December 1971, p. A-8.
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
judgments as to specific birth and death rates for the various
age-sex cohorts, taking into account the availability of food.
The resulting growth rate of 2.1% to 2.2% for the period
1449-72 might even be judged conservative in one major
respect: it is lower than the 2-1/2% rates for India, Pakistan
(pre-1971), and Indonesia - Asian nations which like China
are mainly 'ural and poor but which do not match China
in many aspects of public health and nutrition.
36. In conclusion, the year 1971 was a poor year for the
food/population balance: agricultural production probably failed to increase,
the population rose by about 20 million people, and imports of grain were
reduced from 4.7 million to 3.2 million tons. The difficulties in agriculture
are short-term - production should grow at an average annual rate of at
least 2% during the next few years - but the pressure of population is
not going to be relaxed without a sustained and high-priority population
control program.
Living Standards: Small Improvements
37. The rank-and-file consumer in 1971 benefited from a variety of
small improvements in living standards. Food stocks were sufficient to
cushion the unfavorable short-term movement in the food/population
balance; indeed according to Chinese press accounts and the observations
of visitors, the consumer continued to benefit from an increasing variety,
quality, and availability of foodstuffs. Private plots, which still remain
undisturbed, contributed importantly to this improvement. The clothing
ration was honored in full, and dress, at least in urban areas, became brighter
and more variegated. Blocks of new apartments continued to be erected
in urban areas, and rural housing benefited from countless small
improvements based on private initiative and local materials. The production
of furniture, kitchen utensils, and consumer durables - fountain pens,
watches, radios, bicycles, and sewing machines - all seem to have advanced
in fairly brisk fashion, although sometimes from a small absolute base.
Because of the restoration of the government bureaucracy and the
substa-atial increase in industrial production, many persons moved up the
job ladder. On the negative side: large numbers of young middle-school
and college graduates were, either unemployed, underemployed, or being
rounded up for harsh duty in remote areas.
Gross National Product: $155 Per Capita
38. Industry-rel. ted activity and agriculture-related activity now stand
roughly in one-to-one proportion in the PRC. Thus, if industrial output
went up 10% to 12% in 1971 and agricultural output stood still, China's
- 10 -
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
GNP rose approximately 5%, or to about $130 billion (in 1970 US dollars).
This total amounts to approximately $155 per capita, compared with less
than $100 per capita in India and about $400 per capita in Taiwan.
Prospects: Bullish
39. The dominant consideration in assessing China's near-term
economic prospects is that the industrial capacity needed for continued
expansion of production either is coming on stream or is under construction.
This new construction not only will provide additional capacity for
military-related output but also for increased support of agriculture. China's
agricultural sector can still profitably absorb large additional quantities of
fertilizers, pesticides, and irrigation and drainage equipment. The foreign
trade sector will continue to supply machinery at the forefront of China's
technology. Even though the population is now responding less readily to
spiritual incentives than in the early days of Communist rule, there are
enough controls and material incentives in China's economy to ensure
reasonably good productive effort in the near future. Of course, a return
to radical economic policies or a prolonged spell of bad weather in
agriculture could undercut these bullish prospects.
40. Beyond the near-term, however, China will face several formidable
problems of growing intensity:
a. Peking will have to decide on the scale of
development, production, and deployment of increasingly
complex weapons systems, which can chew up an alarming
proportion of China's best resources.
b. The system of education and -?finical training -
which was purged of many "bourgeois" elements during the
Cultural Revolution - has virtues for the short-run expansion
of production but is unsuitable for the development and
operation of China's industrial system of the late 1970s. For
example, the educational system denigrates activity in basic
research and discourages the exchange of ideas with the outside
world. The system of spontaneous "self-reliant" technological
innovation makes standardization of machinery and parts
difficult and, like the, Soviet system, fails to reward suitably
those managers who take risks in innovation.
c. The rising level of educational attainment, job skill,
and career expectations among the Chinese people is not being
matched by corresponding increases in standards of living or
by the easing of harsh conditions of work. Peking probably
- 11 -
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
SECRET
will face incrcasing problems in. dampening the rising
expectations of the population in. these areas.
d. Peking also will be facing the problem of adjusting
to an international environment in which change and flexibility
are necessary to meet the competition. Even though China will
obviously be widening the technological margin it enjoys over
ordinary less developed countries, it may well find itself falling
farther behind the dynamic industrial nations of Europe and,
of course, Japan.
- 12 -
SECRET
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8
25X1
25X1
1952
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
1970
1971`
GNP (billion 1970 US dollars)b.....
60
85
95
95
90
70
85
90
100
110
105
100
115
125
130
Population, mid-year (million
7
689
701
710
721
735
751
766
783
800
818
836
855
persons) .......................
b
570
642
658
6
4
130
105
115
115
125
135
145
135
130
140
150
155
Per capita GNP (1970 US dollars)
105
130
145
140
180
175
175-180
180-185
190-195
195-200
210-215
195-200
200-205
215-220
215-220
Grain (million metric tons)........
154
185
200
165
160
160
-
9
3
1
1
3
6
1
1.8
1.6
1.7
1.7
1.6
Cotton (million metric tons).......
1.3
1.6
1.7
1.5
1.4
0-9
0.9
0.
.
.
.
Industrial production index (1957
160
162
103-105
106-109
117-123
133-141
155-165
177-!90
142-154
147-162
178-198
208-233
231-259
100) ........................
51
100
130
163
-
8
9
10
11
13
10
11.5
14.5
18
21
Crude steel million metric tons) ...
1.35
5.35
8.0
10
13
8
180
190
200
220
240
190
200
250
300
325
Coal (million metric tons)..... -...
66.5
130.7
230
300
280
170
Electric power (billion kilowatt
31
30
33
36
42
47
41
44
50
60
70
hours) ....................
7.3
19.3
27.5
41.5
47
5
5
9
6
8
10
10
11
14
18
23
Crude oil (million metric tons)..
1-44
1.46
2.26
3.7
4.6
4.5
5.0
7
.
85
.
100
115
125
145
190
195
230
248
Aluminum (thousand metric tons
0
39
49
70
80
60
0
7
3
7
8
10
9
0
12
10.2
10.5
12
13
14
Cement (million metric tons,.. - -
2.86
6.J
9.3
10.6
9.0
6.0
5.5
.
.
.
.
Chemical fertilizers (million metric
tons of product -eight)
5
4
2
3
1
4
9
4.7
6.8
8.0
8.3
8.8
9.9
11.7
13.9
Supply .................... ...
0.4
1.9
3.0
b.l
3.
5
.
1
4
.
1
2
.
9
2
3.5
4.5
5.5
4.0
4.8
5.8
7.4
9.6
Production ....................
0.2
0.8
1.4
1
2.
0
.
0
1
.
0
1
.
2
0
1.2
2.3
2.5
4.3
4.0
4.1
4.3
4.3
Imports ........ ..............
0.2
1.1
1.6
1-2
9
4
1.
15
.
1
.
14
.
16
26
34
47
34
31
60
65
70
Trucks (thousa.U units)...........
0
7.5
16.0
.
1
25
25
25
50
140
200
240
260
280
300
Locomotives (units). - - - .... .....
20
167
350
500
600
100
7
6
6
7
5
9
6
7
8
11
12
14
Freight can (thousand units).....
5.8
7.3
II
17
23
3
4.0
5.9
5
5.
9
4
.
5
4
.
0
6
.
4
8
.
4.8
6.5
7.5
7.5
Cotton cloth (billion linear meters)
3.83
5.05
5.7
7.5
5.8
4.0
4.2
4.
.
.
.
.
Foreign trade billion current CS
dollars
03
3
74
3
4
26
98
3
3.02
2.68
2.77
3.22
3.85
4.20
3.89
3.75
3.86
4.26
4-50
Total .........................
1.89
.
.
91
1
.
20
2
-
95
1
52
1
1.53
1.57
1.75
2.00
2.16
1.94
1.93
2.03
2.07
2.30
Exports- ..... ..... ......
0.88
1.60
.
.
06
.
03
2
.
50
1
1
15
120
1
1.47
1.86
2.04
1.95
1.82
1.83
2.19
2.20
Imports........
1.01
1.43
1.83
2.
.
.
.
.
---_-
-
....._....., -----.e ?-- ----
bThA! estimates of GNP in 197U IS dollars for isoc anu .....-,v....~ ."
and multiplying them by 1.0552. which is the 1970:1969 ratio in the US implicit price deflator index for total G`P, as given
he results were t en rounded to the nearest 85 billion. The GNP for 1971 was estimated as being 5% above the 1970 level. The estimates for per
. - -- ___ Th
sults were hen rounded to the nearest $5.
.
-.
G
P
e re
People's Republic of China: Key Economic Series as of January 1972
Sanitized Copy Approved for Release 2011/01/18: CIA-RDP85T00875R001700030009-8