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China has become a preferred destination for the relocation of global manufacturing facilities. Its strength as an export platform has contributed to incomes and employment in China. In recent years, authorities have been giving greater attention to the management of state assets—both in the financial market as well as among state-owned-enterprises—and progress has been noteworthy. Since the founding of the People's Republic, industrial development has been given considerable attention.

Among the various industrial branches the machine -building and metallurgical industries have received the highest priority. These two areas alone now account for about 20—30 percent of the total gross value of industrial output. Florida Forestry China Trade Mission Report In these, as in most other areas of industry, however, innovation has generally suffered at the hands of a system that has rewarded increases in gross output rather than improvements in variety, sophistication and quality. China, therefore, still imports significant quantities of specialized steels.

Overall industrial output has grown at an average rate of more than 10 percent per year, having surpassed all other sectors in economic growth and degree of modernization. Industrial output growth — Some heavy industries and products deemed to be of national strategic importance remain state-owned, but an increasing proportion of lighter and consumer -oriented manufacturing firms are privately held or are private-state joint ventures. Since the s, the trend away from the agricultural sector toward industrialisation has been dramatic, and is a result of both policy changes and free market mechanisms.

During the s and s, heavy industry received most attention and consequently grew twice as rapidly as agriculture.


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After the reforms of , more attention to the agricultural sector as well as a move away from heavy industry toward light resulted in agricultural output almost doubling with only marginal increases for industry. Before , state-owned and collectively owned enterprises represented The policy of reform and opening-up has given extensive scope to the common development of various economic sectors. Individual and private industrial enterprises and enterprises have mushroomed with investment from outside mainland China.

Domestically, modernisation and economic growth has been the focus of the reformist policies introduced by Deng Xiaoping , and in attempting to achieve this, the leadership has implemented the Four Modernizations Program that lays special emphasis on the fields of agriculture, industry. In the countryside, the " responsibility system " has been implemented and basically represents a return to family farming.

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Under this system, families lease land for a period of up to thirty years, and must agree to supply the state an agreed quota of grain or industrial crops at a fixed low cost in return. The remaining surplus can either be sold to the state or on the free market. As a result, peasants have been increasing their agricultural output in response to these incentives. Together with the responsibility system, there have also been a number of reforms relating to rural businesses—especially in the spheres of commerce and manufacturing. The increase in personal income brought about through the responsibility system has led to a burgeoning of small-scale enterprises that remain completely in private hands.

Reform of state-owned enterprises has always been the key link of China's economic restructuring. The Chinese government has made various attempts to solve the problem of chronic extensive losses in this sector and by now almost every state-owned enterprise has adopted the company system.


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  5. After being transformed into joint stock companies, the economic benefit of the state-owned enterprises increased steadily and their overall strength and quality were remarkably enhanced, gaining continuously in their control, influence and lead in the whole national economy. The role of free market forces has also been instrumental in altering China's sectoral make-up.

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    After , the forces of supply and demand meant that consumers could play a greater role in determining which crops would be planted. This had the effect of making more profitable the planting of such crops as fruit, vegetables and tea. As a consequence, however, traditional grain crops have suffered, as farmers prefer to plant the more profitable cash crops. Increases in light industrial production and more profitable crops brought about by the loosening of market controls had not always been enough to satisfy consumer demand , which in turn led to inflation.

    Rather than increased demand being met with increased supply, the manufacturing sector and economic infrastructure were still too underdeveloped to supply a population of over one billion people with the commodities they wanted or needed. Instead, a 'dual track' pricing system aose which had promoted arbitrage between official and free-market prices for the same commodities.

    Inflation and the unavailability of consumer goods had made some commodities too expensive for ordinary Chinese workers, as well as resulting in a general decline in living standards. Another factor arising from inflation in China had been corruption among the higher echelons of the CCP. Managers of factories in regulated industries—usually high-level Party cadres—have been selling factory produce on the free market at grossly inflated prices.

    Annex 1: Complements of statistical analyses

    Inflation and corruption had become so embedded in the system by , that the leadership was forced to take some drastic economic measures. In response to the general economic malaise, Prime Minister Li Peng adopted several austerity measures in the middle of The primary goal of these measures was to reduce economic growth and included such measures as limiting joint ventures, curtailing capital investment , tightening fiscal and monetary controls, reimposing centralised control on local construction projects and cuts in capital investment. China's eighth Five Year Plan — reflected the goals of slowing the economy down to a manageable level after the excesses of the late s.

    However, the national economy also showed similar signs of stagnation. Although eighteen months of austerity measures had lowered inflation to 2. Increased investment into capital construction programs and Township and Village Enterprises TVEs was the government's solution to reviving the economy. However, by mid signs re-emerged that the economy was about to overheat once again. The rapid growth of early indicated that the government was still going to have to struggle further with enforcing its economic policies. The national economy had been characterised by a large share of industry—standing at Such a constitution of GDP was a reflection of the Soviet influence of a planned economy since the s.

    The dominance of the industrial sector in the PRC's GDP constitution has not always been the case however, and it has been largely through governmental intervention that this evolution took place. In , of the industrial added value created by all state-owned industrial enterprises and non-state industrial enterprises with annual turnover exceeding five million yuan, state-owned and state stock-holding enterprises accounted for The result is a dynamic juxtaposition of diversified economic elements.

    In , of Chinese enterprises ranking in the world's top , 14 enterprises of China's mainland were all state-owned.

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    Of China's own top , 74 percent were state-owned and state stock-holding enterprises, with assets of 27, billion yuan and realizing profit of Small and medium-sized enterprises and non-public enterprises have become China's main job creators. Private enterprises alone provided 50 percent of employment of the entire society. China has achieved a rapid increase in the gross value of industrial output used before China switched to GNP accounting in , which, according to official Chinese statistics, rose by Major policy reforms of further accelerated the pace of industrial growth, which reached Industrial output was officially up Also apparent has been the spatial unevenness of recent industrial development, with growth concentrated mainly in Shanghai , the traditional hub of China's industrial activity, and, increasingly, a number of new economic centers along the southern coast.

    One key factor in this industrial geography has been the government's establishment of several Special Economic Zones in Guangdong , Fujian and Hainan provinces, and its designation of over 14 "open coastal cities" where foreign investment in export-oriented industries was actively encouraged during the s. China's cotton textile industry is the largest in the world, producing yarn, cloth, woolen piece goods, knitting wool, silk, jute bags, and synthetic fibers.

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    In addition to garments and textiles, output from light industry includes footwear, toys, food processing, and consumer electronics. Heavy industries include iron and steel, coal, machine building, armaments, petroleum, cement, chemical fertilizers, and autos. High technology industries produce high-speed computers, types of semiconductors, specialized electronic measuring instruments , and telecommunications equipment. Since , industry has been providing agriculture with farm machines , chemical fertilizers, insecticides, means of transportation, power, building materials, and other essential commodities.

    Handicraft cooperatives also have been busy making hand-operated or animal-drawn implements. Production of a variety of industrial goods has expanded, increasingly in order to supply the country's own expanding industrial base. In addition to fertilizers, the chemicals industry produces calcium carbide, ethylene, and plastics.

    Since , great emphasis has been placed on the manufacture of transportation equipment, and China now produces varied lines of passenger cars, trucks, buses, and bicycles.

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    In , output included 1,, motor vehicles more than double the figure. Output for was over The industry underwent a major overhaul in the late s in order to stimulate efficiency and production. Large numbers of joint ventures with foreign firms helped introduce new technology and management to the industry. Chengdu has eight primary industries — electronic information, food processing including tobacco , machinery, petrochemicals, metallurgy, automobiles, building materials and light industry.

    Collectively, their value added output in was U.

    Tourism is a pillar of Chengdu's service sector. In , Chengdu welcomed more than Foreign exchange earnings amounted to U. Chengdu is one of the top 14 service outsourcing cities in China and is among the world's top 50 emerging outsourcing cities. In , total foreign trade grew 9. Imports rose Food and Agricultural Products.

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    Within the vibrant tourism sector, hotels in particular are avid consumers of imported food and beverage products. This provides attractive advantages to U. Currently, U. During the past decade, U. In , China surpassed Canada to become the top U.