In 1986 about 120 major enterprises produced most of China's machine tools. Many of the large plants were in the east, north, and northeast, particularly in Beijing, Shanghai, Shenyang, Harbin, and Tianjin. In the early and mid-l980s, a number of agreements with foreign manufacturers aimed to help China upgraÍÍÍÍde its machinetool industry. The Shanghai Municipal Government also asked World Bank's assistance in preparing and financing a comprehensive modernization scheme for the Shanghai machine-tool industry.

Overall, the machine-tool industry was based on 1960s technology. Many of the tools had a service life of only five to seven years, compared with twelve to fifteen years in industrialized countries. The tools were generally unreliable and ill-suited for precision work because of outdated design, lowquality purchased components, substandard manufacturing facilities, and a lack of production-management expertise.

Data as of July 1987