Salient Features:Economic system in transition, cautiously moving away from Soviet-style central planning and gradually adopting market economy mechanisms and reduced government role. Industry, largely based on state and collective ownership, marked by increasing technological advancements and productivity. China's people's communes (see Glossary) eliminated by 1984--after more than twenty-five years--and responsibility system (see Glossary) of production introduced in agricultural sector. Private ownership of production assets legal, although major nonagricultural and industrial facilities still state owned and centrally planned. Restraints on foreign trade relaxed and joint ventures encouraged.

Industry: In 1985 employed about 17 percent of labor force but produced more than 46 percent of gross national product (GNP). Fastest growing sector average annual growth of 11 percent from 1952 to 1985. Wide range of technological levels many small handicraft units many enterprises using machinery installed or designed in 1950s and 1960s significant number of big, up-to-date plants, including textile mills, steel mills, chemical fertilizer plants, and petrochemical facilities but also burgeoning light industries producing consumer goods. Produced most kinds of products made by industrialized nations but limited quantities of high-technology items. Technology transfer by importing whole plants, equipment, and designs an important means of progress. Major industrial centers in Liaoning Province, Beijing-Tianjin- Tangshan area, Shanghai, and Wuhan. Mineral resources included huge reserves of iron ore adequate to abundant supplies of nearly all other industrial minerals. Outdated mining and ore processing technologies gradually being replaced with modern techniques.

Agriculture: In 1985 employed about 63 percent of labor force proportion of GNP about 33 percent. Low worker productivity because of scanty supplies of agricultural machinery and other modern inputs. Most agricultural processes still performed by hand. Very small arable land area (just above 10 percent of total area, as compared with 22 percent in United States) in relation to size of country and population. Intensive use of land all fields produce at least one crop a year wherever conditions permit, two or even three crops grown annually, especially in south. Grain most important product, including rice, wheat, corn, sorghum, barley, and millet. Other important crops include cotton, jute, oilseeds, sugarcane, and sugar beets. Eggs a major product. Pork production has increased steadily poultry and pigs raised on family plots. Other livestock relatively limited in numbers, except for sheep and goats, grazed in large herds on grasslands of Nei Monggol Autonomous Region (Inner Mongolia) and northwest. Substantial marine and freshwater fishery. Timber resources mainly located in northeast and southwest much of country deforested centuries ago. Wide variety of fruits and veceb vegetables grown.

Energy Sources:Self-sufficient in all energy forms coal and petroleum exported since early 1970s. Coal reserves among world's largest mining technology inadequately developed but improving in late 1980s. Petroleum reserves very large but of varying quality and in disparate locations. Suspected oil deposits in northwest and offshore tracts believed to be among world's largest exploration and extraction limited by scarcity of equipment and trained personnel twenty-seven contracts for joint offshore exploration and production by Japanese and Western oil companies signed by 1982, but by late 1980s only handful of wells producing. Substantial natural gas reserves in north, northwest, and offshore. Hydroelectric potential greatest in world, sixth largest in capacity very large hydroelectric projects under construction, others in planning stage. Thermal power, mostly coal fired, produced approximately 68 percent of generating capacity in 1985 expected to increase to 72 percent by 1990. Emphasis on thermal power in late 1980s seen by policy makers as quick, shortterm solution to energy needs hydroelectric power seen as longterm solution. Petroleum production growth to continue in order to meet needs of nationwide mechanization and provide important foreign exchange but domestic use to be restricted as much as possible.

Foreign Trade: Small by international standards but growing rapidly in size and importance, represented 20 percent of GNP in 1985. Trade controlled by Ministry of Foreign Economic Relations and Trade and subordinate units and by Bank of China, foreign exchange arm of central bank. Substantial decentralization and increased flexibility in foreign trade operations since late 1970s. Textiles leading export category. Other important exports included petroleum and foodstuffs. Leading imports included machinery, transport equipment, manufactured goods, and chemicals. Japan dominant trading partner, accounting for 28.9 percent of imports and 15.2 percent of exports in 1986. Hong Kong leading market for exports (31.6 percent) but source of only 13 percent of imports. In 1979 United States became China's second largest source of imports and in 1986 was third largest overall trade partner. Western Europe, particularly Federal Republic of Germany, also major trading partner. Tourism encouraged and growing.

Data as of July 1987