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#CARD:China:Background Notes BACKGROUND NOTES: CHINA PUBLISHED BY THE BUREAU OF PUBLIC AFFAIRS US DEPARTMENT OF STATE J ê(⌠p AUGUST 1993 Official Name: People's Republic of China J ê(⌠p PROFILE J ê(⌠p J ê(⌠p Geography Total area: 9.6 million sq. km. Slightly larger than U.S.; world's third largest country (after Russia and Canada). J ê(⌠p Climate: Tropical in south to subarctic in north; typhoons and damaging floods occur every year. J ê(⌠p Terrain: Mostly mountains, high plateaus, deserts in west; plains, deltas, and hills in east. J ê(⌠p Natural resources: coal, iron ore, crude oil, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium; world's largest hydropower potential. Cities: Capital--Beijing (Peking); Shanghai, Tianjin, Guangzhou (Canton), Shenyang, Wuhan, Chengdu. J ê(⌠p J ê(⌠p People Nationality: Noun and adjective--Chinese (sing. and pl.). J ê(⌠p Population (1993): About 1.2 billion. J ê(⌠p Growth rate (1993 est.): 1.4 %. Infant mortality rate (1993)--33 deaths/1,000 live births. Life expectancy (1993)--68 yrs. male, 72 yrs. female. J ê(⌠p Ethnic divisions: Han Chinese 93%; Zhuang, Uygur, Hui, Yi, Tibetan, Miao, Manchu, Mongol, Buyi, Korean, and other nationalities 6.7%. J ê(⌠p Religion: Officially atheist, but traditionally pragmatic and eclectic; most important elements of religion are Confucianism, Taoism, and Buddhism; Muslim 2-3%, Christian 1% (est.). J ê(⌠p Language: Standard Chinese (Putonghua) plus many local dialects. Literacy--73% (male 84%, female 62%) age 15 and over can read and write. J ê(⌠p Education: 9 years compulsory. Attendance (est.)--80%. J ê(⌠p Labor force (1990, 650 million): Agriculture and forestry--60%. Industry--22%. Services, including commerce--8%. J ê(⌠p J ê(⌠p Government Type: Communist party-led state. Constitution: December 4, 1982 (earlier versions: 1954, 1975, 1978). J ê(⌠p Independence: unification under the Qin (Ch'in) Dynasty 221 BC; Qing (Ch'ing or Manchu) Dynasty replaced by the Republic on February 12, 1912; People's Republic established October 1, 1949. J ê(⌠p Branches: Executive--president, vice president, State Council, premier. Legislative--unicameral National People's Congress. Judicial--Supreme People's Court. J ê(⌠p Legal system: a mix of custom and statute, largely criminal law; rudimentary civil code in effect since 1987. J ê(⌠p Administrative divisions: 23 provinces (P.R.C. considers Taiwan to be its 23rd province); 5 autonomous regions, including Tibet; 3 municipalities directly under the state council. J ê(⌠p Political parties: Chinese Communist Party, 50 million members (1990 est.); 8 minor parties under communist supervision. Suffrage: Universal at 18. J ê(⌠p National holidays: National Day, October 1. J ê(⌠p Flag: Red with a large yellow five-pointed star and four smaller yellow five-pointed stars. J ê(⌠p J ê(⌠p Economy GNP: $410 billion (1993 est.), per capita $325. J ê(⌠p Annual real growth rate: 13% (1993). J ê(⌠p Inflation rate: 18% (1993). J ê(⌠p Unemployment: 2.6% (1993), 3% in urban areas. J ê(⌠p Trade: Exports--$99.5 billion (1993): exported commodities--textiles; garments; telecommunications and recording equipment; petroleum; minerals. Partners--Hong Kong, Japan, EU, U.S., ASEAN. Imports- -$99 billion (1993 est.): imported commodities--specialized industrial machinery; chemicals; manufactured goods; steel; textile yarn; fertilizer. Partners--Hong Kong, Japan, EC, U.S., ASEAN. J ê(⌠p External debt: $50 billion (1991 est.). J ê(⌠p Industrial production: Growth rate 25% (1993); accounts for almost 60% of GNP. J ê(⌠p Industries (share of GDP output in 1987): machinery (28%); textiles and apparel (18%); chemicals (12%); food (11%); metallurgy (8%). J ê(⌠p Natural resources: Coal, iron ore, crude oil, mercury, tin, tungsten, antimony, manganese, molybdenum, vanadium, magnetite, aluminum, lead, zinc, uranium, world's largest hydroelectric potential. J ê(⌠p Agriculture: accounts for 26% of GNP; among the world's largest producers of rice, potatoes, sorghum, peanuts, tea, millet, barley, and pork; commercial crops include cotton, other fibers, and oilseeds; produces variety of livestock products; basically self-sufficient in food; fish catch of 8 million metric tons in 1986. J ê(⌠p Exchange Rate: (Sept. 1993): 5.45 yuan per U.S.$1. J ê(⌠p J ê(⌠p _______________ The 1993 China Background Notes were produced by the Bureau of East Asian and Pacific Affairs, Office of Chinese and Mongolian Affairs, Department of State, Room 4318 NS (tel. 202-647-6300, fax 202-647-6820), which welcomes your comments. (###) J ê(⌠p J ê(⌠p PEOPLE China's population in mid-1993 was about 1.4 billion, with an estimated growth rate of 1.2%. China is very concerned about its population growth and has attempted to implement a strict population control policy. The government's goal is one child per family, with exceptions in rural areas and for ethnic minorities. This policy is often ignored in the countryside and also by many urban dwellers. The government states that it opposes physical compulsion to submit to abortion or sterilization, but the instances of coercion have continued as local officials strive to meet population targets. The government's goal is to stabilize the population early in the 21st century, although some current projections estimate a population of 1.6 billion by 2025. Overall annual population growth is estimated to have dropped to about 1.2% since 1973. J ê(⌠p The largest ethnic group is the Han Chinese, who constitute about 93% of the total population. The remaining 7% are Zhuang (16 million), Manchu (9 million), Hui (8 million), Miao (8 million), Uygur (7 million), Yi (7 million), Tibetan (5 million), Mongol (5 million), and Korean (1 million). J ê(⌠p There are seven major Chinese dialects and many subdialects. The Beijing dialect, often called Mandarin (or Putonghua), is taught in all schools, and is the medium of government. Only about two-thirds of the Han ethnic group are native speakers of Mandarin; the rest, concentrated in southwest and southeast China, speak one of the six other major Chinese dialects. Non-Chinese languages spoken widely by ethnic minorities include Mongolian, Tibetan, Uygur and other Turkic languages in Xinjiang, and Korean in the northeast. J ê(⌠p Religion continues to play a significant part in the life of many Chinese. Buddhism is most widely practiced, with an estimated 100 million adherents; traditional Daoism also is practiced. Official figures indicate there are 20 million Muslims, 3.6 million Catholics, and 5.6 million Protestants; unofficial estimates are much higher. J ê(⌠p While the constitution affirms religious toleration and the Chinese Government has reopened many temples, mosques, and churches closed during the Cultural Revolution, the government places restrictions on religious practice outside officially recognized organizations. The government permits only two official Christian organizations, a Catholic church without ties to Rome and the "Three- Self- Patriotic" Protestant church. Underground churches have sprung up in many parts of the country. J ê(⌠p J ê(⌠p HISTORY China is the oldest continuous major world civilization, with records dating back about 3,500 years. Successive dynasties developed a system of bureaucratic control which gave the agrarian-based Chinese an advantage over neighboring nomadic and hill cultures. Chinese civilization was further strengthened by the development of a Confucian state ideology and a common written language that bridged the gaps among the country's many local languages and dialects. Whenever China was conquered by nomadic tribes, as it was by the Mongols in the 13th century, the conquerors sooner or later adopted the ways of the "higher" Chinese civilization and staffed the bureaucracy with Chinese. J ê(⌠p The last dynasty was established in 1644, when the nomadic Manchus overthrew the native Ming dynasty and established the Qing (Ch'ing) dynasty with Beijing as its capital. At great expense in blood and treasure, the Manchus over the next half century gained control of many border areas, including Xinjiang, Yunnan, Tibet, Mongolia, and Taiwan. The success of the early Qing period was based on the combination of Manchu martial prowess and traditional Chinese bureaucratic skills. J ê(⌠p During the 19th century, Qing control weakened, and prosperity diminished; the "mandate of Heaven" which legitimized dynastic rule appeared ready to shift once more. China suffered massive social strife, economic stagnation, explosive population growth, and Western penetration and influence. Following the Opium War (1840-42), Britain and other Western powers, including the United States, gained special privileges at five designated "treaty ports." J ê(⌠p The Taiping and Nian rebellions, along with a Russian-supported Muslim separatist movement in Xinjiang, drained Chinese resources and almost toppled the dynasty. As time went on, the Western powers, wielding superior military technology, gained more economic and political privileges. Reformist Chinese officials argued for the adoption of Western technology to strengthen the dynasty and counter Western advances, but the Qing court played down both the Western threat and the benefits of Western technology. J ê(⌠p Finally, China's defeat in 1895 by Japan, which had adopted Western technology and other elements of Western culture, shocked Chinese officialdom and some of the Qing court. The country embarked on a crash reformist program, until the effort was stymied by conservative reaction in the Qing court. Anti-foreign and anti-Christian groups then rampaged through north China in what became known as the Boxer Rebellion, which was eventually crushed by expeditionary forces of the foreign powers. J ê(⌠p Early 20th Century China Frustrated by the Qing court's resistance to reform, young officials, military officers, and students--inspired by the revolutionary ideas of Sun Yat-sen--began to advocate the overthrow of the Qing dynasty and creation of a republic. A revolutionary military uprising on October 10, 1911, led to the abdication of the last Qing monarch. As part of a compromise to overthrow the dynasty without a civil war, the revolutionaries and reformers allowed high Qing officials to retain prominent positions in the new republic. One of these figures, General Yuan Shikai, was chosen as the republic's first president. Before his death in 1916, Yuan unsuccessfully attempted to name himself emperor. His death left the republican government all but shattered, ushering in the era of the "warlords" during which China was ruled and ravaged by shifting coalitions of competing provincial military leaders. J ê(⌠p In the 1920s, Sun Yat-sen established a revolutionary base in south China and set out to unite the fragmented nation. With Soviet assistance, he organized the Kuomintang (KMT or "Chinese Nationalist People's Party") along Leninist lines, and entered into an alliance with the fledgling Chinese Communist Party (CCP). After Sun's death in 1925, one of his proteges, Chiang Kai-shek, seized control of the KMT and succeeded in bringing most of south and central China under its rule. In 1927, Chiang destroyed the CCP's party organization and executed many of its leaders. The remnants fled into the mountains of eastern China. J ê(⌠p Finally, driven out of their mountain bases in 1934, the CCP's forces embarked on a "long march" across China's most desolate terrain to the northwest, where they established a guerrilla base at Yan'an in Shaanxi Province. J ê(⌠p During the "long march," the communists reorganized under a new leader, Mao Zedong (Mao Tse-tung). The bitter struggle between the KMT and the CCP continued openly or clandestinely through the 14- year long Japanese invasion (1931-45), even though the two parties nominally formed a united front to oppose the Japanese invaders in 1937. The war between the two parties resumed after the Japanese defeat in 1945. By 1949, the CCP occupied most of the country. Chiang Kai-shek fled with the remnants of his KMT government and military forces to Taiwan, where he proclaimed Taipei to be China's "provisional capital" and vowed to reconquer the Chinese mainland. The KMT authorities on Taiwan still call themselves the "Republic of China" and assert that they constitute the sole legal government of all China, including Taiwan. J ê(⌠p The People's Republic of China In Beijing, on October 1, 1949, Mao Zedong proclaimed the People's Republic of China. The new government assumed control of a people exhausted by two generations of war and social conflict, and an economy ravaged by high inflation and disrupted transportation links. A new political and economic order modeled on the Soviet example was quickly installed. J ê(⌠p In the early 1950s, China undertook a massive economic and social reconstruction. The new leaders gained popular support by curbing inflation, restoring the economy, and rebuilding many war-damaged industrial plants. The CCP's authority reached into almost every phase of Chinese life. Party control was assured by large, politically loyal security and military forces; a government apparatus responsive to party direction; and ranks of party members in labor, women's, and other mass organizations. J ê(⌠p The "Great Leap Forward" and the Sino-Soviet Split In 1958, Mao broke with the Soviet model and announced a new economic program, the "Great Leap Forward," aimed at rapidly raising the industrial and agricultural production above the impressive gains already attained. Mao believed that China's latent potential could be tapped by industrial decentralization and a greater degree of collectivization. Giant cooperatives (communes) were formed, and "backyard factories" dotted the Chinese landscape. The results were disastrous. Normal market mechanisms were disrupted, and China's people exhausted themselves producing what turned out to be shoddy, unsalable goods. Within a year, starvation appeared even in fertile agricultural areas, and the Chinese leadership retreated, blaming poor planning and the weather. Later, they also blamed the Soviets for economic sabotage. J ê(⌠p The already strained Sino-Soviet relationship deteriorated sharply in 1959, when the Soviets started to restrict the flow of scientific and technological information to China. The dispute escalated, and the Soviets withdrew all of their personnel from China in August 1960. In 1960, the Soviets and the Chinese began to dispute openly in international forums. J ê(⌠p The Cultural Revolution In the early 1960s, State President Liu Shaoqi and his protege, Party General Secretary Deng Xiaoping, took over direction of the party and adopted pragmatic economic policies at odds with Mao's revolutionary vision. Dissatisfied with China's new direction and his own reduced authority, Party Chairman Mao launched a massive political attack on Liu, Deng, and other pragmatists in the spring of 1966. The new movement, the "Great Proletarian Cultural Revolution," was unprecedented in communist history. For the first time, a section of the Chinese communist leadership sought to rally popular opposition against another leadership group. China was set on a course of political and social anarchy which lasted the better part of a decade. J ê(⌠p In the early stages of the Cultural Revolution, Mao and his "closest comrade in arms," National Defense Minister Lin Biao, charged Liu, Deng, and other top party leaders with dragging China back toward capitalism. Radical youth organizations, called Red Guards, attacked party and state organizations at all levels, seeking out leaders who would not bend to the radical wind. In reaction to this turmoil, some local People's Liberation Army (PLA) commanders and other officials maneuvered to back Mao and the radicals outwardly while actually taking steps to rein in local radical activity. J ê(⌠p Gradually, Red Guard and other radical activity subsided, and the Chinese political situation stabilized along complex factional lines. The leadership conflict came to a head in September 1971, when Party Vice Chairman and Defense Minister Lin Biao reportedly tried to stage a coup against Mao; Lin Biao allegedly later died in a plane crash in Mongolia. J ê(⌠p In the aftermath of the Lin Biao incident, many officials criticized and dismissed during 1966-69 were reinstated. Chief among these was Deng Xiaoping, who reemerged in 1973 and was confirmed in 1975 in the concurrent posts of Politburo Standing Committee member, PLA Chief of Staff, and Vice Premier. Deng and other veteran officials dominated the fourth National People's Congress, held in January 1975. As Premier Zhou Enlai's health deteriorated, Deng acted as Zhou's alter ego. J ê(⌠p The conflict between veteran party officials and the radicals re-emerged with a vengeance in late 1975. Mao's wife, Jiang Qing, and three close Cultural Revolution-era associates (later dubbed the "Gang of Four") launched a media campaign against Deng. When Zhou died in January 1976, it was assumed that Deng would take over the premiership. Instead, Minister of Public Security Hua Guofeng was named Acting Premier in February. Then on April 5, when the Beijing populace staged a spontaneous demonstration in Beijing's Tiananmen Square in Zhou's memory--with strong political overtones in support of Deng--the authorities forcibly suppressed the demonstration. Deng was blamed for the disorder and stripped of all official positions, although he retained his party membership. An event interpreted by many Chinese as a sign that Mao's "reign" was near its end was the Tangshan earthquake, which caused 800,000 casualties in July 1976. J ê(⌠p The Post-Mao Era Mao's death in September 1976 removed a towering figure from Chinese politics and set off a scramble for succession. Hua Guofeng was quickly confirmed as Party Chairman and Premier. A month after Mao's death, Hua, backed by the PLA, arrested Jiang Qing and other members of the "Gang of Four." After extensive deliberations, the Chinese Communist Party leadership reinstated Deng Xiaoping to all of his previous posts at the 11th Party Congress in August 1977. This symbolized the growing consolidation of control by veteran party officials opposed to the radical excesses of the previous two decades. J ê(⌠p The new, pragmatic leadership emphasized economic development and renounced mass political movements. At the pivotal December 1978 Third Plenum (of the 11th Party Congress Central Committee), the leadership adopted new agrarian policies aimed at expanding rural income and incentives, endorsed experiments in enterprise autonomy and reduced central planning, and approved direct foreign investment in China. The plenum also decided to accelerate the pace of legal reform, culminating in the passage of several new legal codes by the National People's Congress in June 1979. J ê(⌠p After 1979, the Chinese leadership moved toward more pragmatic positions in almost all fields. The party encouraged artists, writers, and journalists to adopt more critical approaches, although open attacks on party authority were not permitted. In late 1980, the Cultural Revolution was finally officially proclaimed to have been a catastrophe. Hua Guofeng was replaced as Premier in 1980 by reformist Sichuan party chief Zhao Ziyang and as party General Secretary in 1981 by the even more reformist Communist Youth League chairman Hu Yaobang. J ê(⌠p The 12th Party Congress in September 1982 highlighted the importance of the economic modernization drive by adopting a goal of quadrupling the nation's gross domestic product by the year 2000, and a new state constitution adopted in December 1982--the fourth since 1949--provided a legal framework for ongoing reforms in China's social and economic institutions and practices. J ê(⌠p Reform policies brought great improvements in the standard of living, especially for urban workers and for farmers who took advantage of opportunities to diversify crops and establish village industries. Literature and the arts blossomed, and Chinese intellectuals established extensive links with scholars in other countries. At the same time, however, political dissent as well as social problems like inflation, urban migration, and prostitution re-emerged, and party elders increasingly questioned the pace and ultimate goals of the reform program. J ê(⌠p Efforts to reform the political structure, however, have been less successful. Student demonstrators protested the slow pace of political reform in December 1986. Deng's effort to institutionalize the leadership succession also received a major blow when Hu Yaobang, a protege of Deng and a leading advocate of reform, was forced to resign as CCP General Secretary in January 1987. Premier Zhao Ziyang was made General Secretary and Li Peng, former Vice Premier and Minister of Electric Power and Water Conservancy, was made Premier. J ê(⌠p Reform and Tiananmen Square Repression, June 4, 1989 After Zhao was moved to party General Secretary, the economic and political reforms he had championed came under increasing attack. His proposal in May 1988 to accelerate price reform led to widespread popular complaints about rampant inflation and gave opponents of rapid reform the opening to call for greater centralization of economic controls and stricter prohibitions against Western influence. This precipitated a political debate which grew more heated through the winter of 1988-89. J ê(⌠p The death of Hu Yaobang on April 15, 1989, provided students, intellectuals, and other supporters of continued political reform the opportunity to express their desire for greater freedom. Students at Beijing University marched to Tiananmen Square in order both to mourn Hu's death and to protest against those who would slow reform. Their protests, which grew despite government efforts to halt them, called for an end to official corruption and for defense of freedoms guaranteed by the Chinese constitution. Protests also spread through many other cities, including Shanghai and Guangzhou. J ê(⌠p After several attempts to persuade the students to abandon their protests failed, Zhao's strategy of reasoning with the students was overruled, and martial law was declared on May 20, 1989. After several efforts by the military to clear Tiananmen Square failed, additional units were brought into Beijing early on the morning of June 4, and the military moved into the square led by tanks and armored personnel carriers. The result was the death of hundreds, some claim thousands, of protesters in the square and surrounding streets. J ê(⌠p While foreign governments expressed the horror of the world at this brutal suppression of basic human rights, the Chinese central government moved in the weeks and months after June 4 to eliminate any remaining sources of organized opposition, detaining large numbers of protesters, removing Zhao supporters from office, and requiring political reeducation not only for students but also for large numbers of party cadre and government officials. J ê(⌠p Following the resurgence of hard-liners in the aftermath of June 4, economic reform slowed until given new impetus by Deng Xiaoping's dramatic visit to southern China in early 1992. Deng's renewed push for a market-oriented economy received official sanction at the 14th Party Congress later in the year as a number of younger, reform-minded leaders rose to top positions. Also subsequent to the visit, China's politburo publicly issued an endorsement of Deng's policies of economic openness and reform that stated that the policies should be followed for the next century. These developments should reinforce the support for an integrated and rapidly growing market-oriented economy in southern China. J ê(⌠p Nevertheless, fundamental changes in China's political system appear stalled until the officially retired but still influential revolutionary generation of Deng Xiaoping and his fellow octogenarians passes from the scene. J ê(⌠p Deng's campaign marks a new round in the debate over what policies are more likely to maintain the Chinese Communist Party in power over the long run. Deng and his supporters argue that managing the economy in a way that rapidly increases living standards should be China's primary policy objective, even if "capitalist" measures are adopted. J ê(⌠p The Chen Yun faction argues that turning party functionaries into entrepreneurs would lead to corruption, speculation, and nepotism that undermine respect for the party. These conservatives fear that, when economic growth inevitably falters and the government can no longer satisfy popular expectations, the ideological underpinnings of party power will have been eroded. J ê(⌠p GOVERNMENT State Structure The Chinese Government has always been subordinate to the Chinese Communist Party (CCP), its role being to implement the party's policies. The primary instruments of state power are the State Council, an executive body corresponding to a cabinet, and the National People's Congress (NPC), a legislative body. Members of the State Council include Premier Li Peng, a variable number of vice premiers (now 5), 9 state councilors (protocol equal of vice premiers but with narrower portfolios), the heads of ministries (now 31), and the heads of other commissions and special agencies attached to the State Council. J ê(⌠p Under the Chinese constitution, the NPC is theoretically the state's leading government body. It meets annually for about 2 weeks to review and approve major new policy directions, laws, the budget, and major personnel changes. These initiatives are presented to the NPC for consideration by the State Council after previous endorsement by the communist party's Central Committee. Although the NPC generally approves State Council policy and personnel recommendations, various NPC committees hold active debate in closed sessions, and changes may be made to accommodate alternate views. J ê(⌠p The annual session of the 7th NPC (March-April 1992) endorsed the leadership's policies of economic reform, modernization, and "opening to the outside world," and approved the building of the mammoth "Three Gorges" dam on the Yangtze River. J ê(⌠p Chinese Communist Party The 50-million member CCP, authoritarian in structure and ideology, continues to dominate government and society. Nevertheless, China's population, geographical vastness, and social diversity frustrate attempts to rule by fiat from Beijing. Central leaders must increasingly build consensus for new policies among party members, local and regional leaders, influential non-party members, and the population at large. J ê(⌠p In periods of relative liberalization, such as between 1978 and 1989, the influence of people and organizations outside the formal party structure has tended to increase, particularly in the economic realm. This phenomenon is apparent today in the rapidly developing southeast coastal region. Nevertheless, in all important government, economic, and cultural institutions in China, party committees work to see that party and state policy guidance is followed and that non-party members do not create autonomous organizations that could challenge party rule. Party control is tightest in government offices and in urban economic, industrial, and cultural settings; it is considerably looser in the rural areas, where 80% of the people live. J ê(⌠p Theoretically, the party's highest body is the Party Congress, which is supposed to meet at least once every 5 years. The 14th Party Congress, which met in October 1992, gave official sanction to Deng Xiaoping's "socialist market economy" reform program, elected a new central committee with an expanded politburo, and abolished the central advisory commission of party elders. J ê(⌠p The primary organs of power in the party include: J ê(⌠p -- The seven-member politburo standing committee; -- The politburo, consisting of 20 full members (expanded from 14); -- The secretariat, the principal administrative mechanism of the CCP, headed by the general secretary; -- The military commission; -- The central advisory commission; and -- The discipline inspection commission, which is charged with rooting out corruption and malfeasance among party cadres. J ê(⌠p J ê(⌠p Principal Government and Party Officials President--Jiang Zemin Vice President--Rong Yiren Premier, State Council--Li Peng J ê(⌠p Vice Premiers Yao Yilin Tian Jiyun Wu Xueqian Zou Jiahua Zhu Rongji Minister of Foreign Affairs--Qian Qichen J ê(⌠p Party Officials Politburo Standing Committee Jiang Zemin (General Secretary) Li Peng Qiao Shi Li Ruihuan Zhu Rongji Liu Huaqing Hu Jintao J ê(⌠p Other Full Politburo Members Ding Guangen Tian Jiyun Li Lanqing Li Tieying Yang Baibing Wu Bangguo Zou Jiahua Chen Xitong Jiang Chunyun Qian Qichen Wei Jianxing Xie Fei Tan Shaowen J ê(⌠p Alternate Politburo Member Wen Jiabao Wang Hanbin J ê(⌠p J ê(⌠p Legal System After the Cultural Revolution, China's leaders aimed to develop a legal system to restrain abuses of official authority and revolutionary excesses. In 1982, the National People's Congress adopted a new state constitution that emphasized the rule of law under which even party leaders are theoretically held accountable. In keeping with the emphasis on predictability and the rule of law, the NPC delegates also passed a number of new statutes. Several sought to assure foreigners doing business with China that agreements and contracts would be honored and that arbitrary behavior would not be tolerated. J ê(⌠p In other legal developments, the first civil procedure law in the history of the People's Republic of China was promulgated for provisional use in 1982, filling a major gap in the legal system. Since 1979, when the drive to establish a functioning legal system began, more than 300 laws and regulations, most of them in the economic area, have been promulgated. The use of mediation committees--informed groups of citizens who resolve about 90% of China's civil disputes and some minor criminal cases at no cost to the parties--is one innovative device. There are more than 800,000 such committees in both rural and urban areas. The new Administrative Procedure Law allows citizens to sue officials for abuse of authority or malfeasance. J ê(⌠p The training of lawyers and trained legal aides is now a high priority in China, but the continued scarcity of such professionals complicates the delivery of legal services in the courts. In addition, many lawyers, like other Chinese, generally depend on their work units for housing and many other aspects of their lives. As a result, they often are reluctant to be seen as overzealous in defending individuals accused of political offenses. J ê(⌠p The government has prosecuted hundreds, perhaps thousands, of people for actions related to the pro-democracy demonstrations in June 1989. Some have received sentences in excess of 13 years for crimes such as "counter-revolutionary incitement." Many others have not received court trials and have been interned through administrative channels in re-education camps for up to 3 years. Despite international appeals, there have been few early releases and no response to proposals for international observers to have access to the prisoners. J ê(⌠p J ê(⌠p EDUCATION Although hampered by severe financial and personnel problems, China has made impressive progress in primary education since 1949. About 96% of eligible children are enrolled in first grade, but only 65% generally complete primary school; the drop-out rate in rural elementary schools is nearly double that in cities. In 1986, the NPC enacted its first national compulsory education law, requiring 9 years of attendance. While progress has been made in this regard, the rural reforms of the late 1970s and early 1980s had the unanticipated effect of making it profitable for rural families to put children to work as soon as possible; this has hampered efforts to cut the elementary school drop-out rate. J ê(⌠p A wide gap between China's rural and urban areas also exists in secondary education; middle schools with the best physical plants and budgets are nearly all located in the cities. These include many elite schools that serve as feeder schools for the university system. In all, there are some 104,000 middle schools (both regular and vocational) enrolling nearly 50 million students (roughly 68% of the school-aged population). J ê(⌠p Only about 3% of China's middle school graduates gain admission to college. Every year, 1.5 to 2 million students compete in a nationwide entrance examination for the 500,000 available slots in Chinese universities. Additional examinations--nearly as competitive--take place for those desiring to become students in professional and technical schools. J ê(⌠p China's higher education system was severely damaged during the decade of the Cultural Revolution (1966-76); its full restoration began in 1978. During the first 5 years of the Cultural Revolution, many colleges and universities were closed. In 1978, China's colleges and universities chose new entrants on the basis of standardized entrance examinations and academic criteria, rather than on political criteria. A major effort also was begun to restore the physical plants and personnel resources of colleges and universities to the pre-1966 level. In addition to about 633 regular colleges and universities enrolling about l million students, another 169 new facilities, including short-term colleges and "TV" universities, were opened to provide more opportunities for higher education. J ê(⌠p The results of the education reforms have been difficult to measure, but their long-term success seems to depend largely on two key questions: whether local authorities devote the necessary resources to the new system and whether it attracts the quality of teachers and administrators it needs. The pro-democracy movement of 1989, which started on Chinese campuses, appears to have spurred efforts by conservatives to increase the ideological content of education, first at the university level and increasingly in secondary education. It remains to be seen whether these efforts will endure. J ê(⌠p Although China has sent students to the West since the early 1970s, the numbers have increased dramatically in recent years. By 1992, about 50,000 students were studying in the United States. President Bush's executive order of late 1989 concerning Chinese nationals in the U.S. protected these students from being involuntarily repatriated before January 1, 1994. The Chinese Student Protection Act of 1992 allows these Chinese to apply for permanent residency. The ultimate return of these students will largely depend on China's ability to create conditions which will attract them home. J ê(⌠p J ê(⌠p HUMAN RIGHTS China has acknowledged in principle the importance of human rights and has begun a limited dialogue with its foreign critics. However, its human rights practices remain repressive, falling far short of internationally accepted norms. The government restricts freedom of assembly, expression, and the press and represses most dissent. The most obvious of these efforts was the violent suppression of the demonstrators in Tiananmen Square in 1989 and the subsequent imprisonment of many of the demonstrators, who were charged with offenses such as "counter-revolutionary incitement." J ê(⌠p Although China attempts to control religion through state-sponsored organizations, unofficial religious practice increasingly occurs. Catholics and Protestants have been prosecuted for maintaining foreign ties, proselytizing, or conducting "illegal" religious services. J ê(⌠p J ê(⌠p ECONOMY Trends and Policies: 1949-81 When the People's Republic of China was established in 1949, its economy was suffering from severe dislocations caused by decades of war and inflation. The new government's immediate concerns were to consolidate power, restore public order, and eliminate widespread unemployment and starvation--all of which were accomplished by 1952. J ê(⌠p Following the example of the early Soviet experience, China created a centrally planned economy which emphasized defense needs and the rapid buildup of heavy industry. China's involvement in the Korean war and the resulting UN trade embargo against it led to further reliance upon Soviet rather than Western assistance. Blueprints for many facilities were imported from the then Soviet Union, which also provided technicians. J ê(⌠p Despite major disruptions stemming from political turmoil and poor economic planning, China's economy averaged a growth rate of almost 6% per year during 1957-81. The "Great Leap Forward" (1958-60) had a disastrous effect upon the economy. Economic experiments during this period included rural collectivization, abandonment of wage incentives, "backyard" steel plants, and great leeway for local government initiative. Such experiments plunged China into a depression in the early 1960s, resulting in famine and the death of millions of Chinese. Compounding these domestic difficulties were increasingly strained relations with the Soviets, who withdrew all assistance and technicians in August 1960. J ê(⌠p In response to these traumas, Beijing reemphasized its traditional determination to be "self-reliant" and began to invest in its agricultural sector. After a brief period of economic growth, the Cultural Revolution (1966-76) reintroduced ideology into economic planning, damaging educational and training systems and disrupting foreign trade. J ê(⌠p In 1975, then Premier Zhou Enlai outlined a new set of economic goals to elevate China to the status of a "front rank" economic power by the year 2000. This multi-staged effort, described as the "four modernizations" program, aimed to achieve ambitious levels of production in Chinese agriculture, industry, science and technology, and national defense. It echoed a century-long search for means to restore the country to relative wealth and power in a world of technologically advanced civilizations. J ê(⌠p After Mao died in 1976, a more pragmatic perspective on political and socioeconomic problems led to a sharp reduction in the role of ideology in economic policy. Consumer welfare, economic productivity, and political stability were considered indivisible. The government emphasized raising personal income and consumption and introducing new management systems to help increase productivity. The government also began to expand foreign trade--by 1978, China was over-extended, having committed itself to purchases totaling $7 billion. J ê(⌠p After poor economic performance in 1978, the government's "readjustment" plan for 1979-81 focused on moderate, short-term goals to remedy the ailing domestic economy. Hundreds of industrial capital construction projects were canceled or postponed to shift resources away from heavy industry to light industry and agriculture. Efforts were aimed to foster economic development by improving energy production and transportation and other infrastructure. At the same time, the government delegated more economic decision-making power to the local governments and state enterprises. J ê(⌠p Continuing budget deficits, excessive capital construction (largely generated by local governments and state enterprises), and inflation led in 1981 to an even more stringent austerity program. Many contracts for imported plants and equipment were canceled or postponed, inefficient state factories were closed, and foreign technology was acquired more judiciously. Tighter central control over some aspects of economic planning also was reintroduced. J ê(⌠p 1981-Late 1980s The 5-year plans for 1981-85 and 1986-90 increasingly reduced the overall role of central management in favor of a mixed "planned commodity" economy. China tried to combine central planning with market-oriented reforms to increase productivity, living standards, and technological quality without exacerbating inflation, unemployment, and budget deficits. China pursued agricultural reforms (including long- term leases on land and permission to specialize in cash crops and engage in non-agricultural activities that led to the demise of the commune system. The government encouraged more self-management for state enterprises, increased competition in the marketplace, and facilitated direct contact between Chinese and foreign trading enterprises. To meet plan targets, China also relied more upon foreign financing and imports. J ê(⌠p During the 1980s, these reforms led to average annual rates of growth of 10% in agricultural and industrial output. Rural per capita real income doubled. China became self-sufficient in grain production; rural industries accounted for 23% of agricultural output, helping absorb surplus labor in the countryside. The variety of light industrial and consumer goods increased. Reforms began in such areas as fiscal, financial, banking, price setting, and labor systems. J ê(⌠p However, by the late 1980s, the economy had become overheated with increasing rates of inflation. At first, the government demonstrated its ability to adjust to economic pressures by adopting a variety of fiscal and administrative measures and appeared to be working toward creating the appropriate political environment in which such reforms could thrive. J ê(⌠p 1989-Present At the end of 1988, however, in reaction to a sudden surge of inflation, the leadership introduced a severe austerity program. Political struggle and economic instability fueled popular unrest. The resulting economic slump was compounded by the immediate foreign reaction to the violence at Tiananmen Square. Resource flows from abroad dropped dramatically, accelerating the deterioration in China's current account balance and raising debt service requirements. The World Bank terminated consideration of new loans, and bilateral assistance programs were frozen. Foreign commercial lending slowed down, and foreign investors postponed projects. Tourism declined sharply. The official trade deficit reached $6.7 billion by the end of 1989. J ê(⌠p China's economy regained momentum in 1990. The government shifted its focus from austerity to restructuring the state-owned enterprises. It relied heavily on promoting exports (while reducing or eliminating export subsidies) and restricting imports to stimulate economic recovery. By the end of 1990, China had a record $9 billion official trade surplus. Its gross domestic product grew by 5%; inflation was at 2%. Tourism recovered. The World Bank and most bilateral assistance donors other than the U.S. resumed former relationships with the country. Notably, Japan restarted a 5-year bilateral aid program which helped revive foreign commercial bank lending. J ê(⌠p According to the 14th Party Congress in late 1992, China's key task in the 1990s is to create a "socialist market economy." Continuity in the political system but bolder reform in the economic system are to be the hallmarks of the 10-year development plan for the 1990s. The 5-year plan for 1991-95 emphasizes development of agriculture, basic industries, transportation, and telecommunications. Chinese leaders have been cautious in stressing a need for greater efficiency and appear to be rejecting radical changes in the economic system. The new plan seems to focus on reducing uncertainties and on fine-tuning some existing policies with respect to prices, finance, taxation, banking, planning, investment, and labor. It does not appear to tackle the structural price distortions which require government subsidies to large and inefficient state enterprises and to the privileged urban population (in the form of housing and food). The plan also does not address the huge amount of resources needed to acquire raw materials and technology to fulfill development plans. J ê(⌠p Agriculture Most of China's labor force is engaged in agriculture, even though only 10% of the land is suitable for cultivation. Virtually all arable land is used for food crops, and China is the world's largest producer of rice, potatoes, sorghum, millet, barley, peanuts, tea, and pork. Major non- food crops, including cotton, other fibers, and oil seeds, furnish China with a large proportion of its foreign trade revenue. Agricultural exports, such as vegetables and fruits, fish and shellfish, grain and grain products, and meat and meat products, are exported to Hong Kong. Yields are high because of intensive cultivation, but China hopes to further increase agricultural production through improved plant stocks, fertilizers, and technology. J ê(⌠p Despite severe flooding in 1991, agricultural output rose by 3%. Over the next 5 years, the government aims to increase annual agricultural production by 3.5%, compared to a planned growth rate of 6.5% for industry and 9% for the service sector. Grain production sharply increased in the last decade and reached its second highest level ever-- 435 million metric tons--in 1991. Cotton production increased to 26% in response to substantial increases in government-set prices. Tobacco, fruit, and sugar crop production also increased substantially; oil-seed, silk cocoons, and tea remained about the same. J ê(⌠p However, low government-set prices for agricultural products and a lack of adequate distribution and storage has led to grain shortages in cities despite government efforts to transfer grain from surplus rural areas to urban centers. A rising demand for meat and rapid growth in the livestock industry also places increased pressure on China's grain supplies. Consequently, China must import grain to fill the gap between demand and supply. To encourage grain production, the government has increased prices several times, but they remain significantly below the market value of farmers' output to maintain low food prices for politically influential urban consumers. J ê(⌠p Industry Major state industries are iron and steel, coal, machine building, armaments, and textiles. These industries completed a decade of "reform" (1979-89) with little substantial management reform. Although the central government depends upon income from state- owned enterprises, their productivity has been falling while costs of production and debt levels have been increasing sharply. The government recognizes the need for substantial reforms but remains reluctant to terminate state subsidies and to pursue innovative approaches to management. J ê(⌠p The Chinese have in some instances tried to substitute "advisory planning" for mandatory planning. The industrial sector needs to undergo new reform designed to resolve the chronic debt, low efficiency, and heavy losses of state-run enterprises sustained in the late 1980s. Industrial growth spurted 14% in 1991, but there were marked disparities in growth among different types of enterprises. State-owned industry grew only 8.4%, while collective and private sectors grew 18% and 24% respectively. The industrial output of Sino-foreign joint ventures, Sino-foreign contract ventures, and solely foreign-owned enterprises rose 56%. J ê(⌠p In late 1990, Chinese leaders declared that 1991 would be the year of "quality, variety, and efficiency." Factory managers were called on to cut losses and boost productivity, and enterprise managers were challenged to reduce material consumption by 3%, pare administrative expenses by 5%, and cut operational losses by half during the next year. To this end, Beijing announced 11 measures, such as lowering interest rates on state enterprise loans, forming 100 new enterprise groups to improve production coordination, and giving some of these groups and other key firms more foreign trade authority in the long term. To attract new investments to support technical upgrading and improve competitiveness, Chinese banks intend to issue more loans over the next 5 years to support these projects. In 1992, China undertook an effort to improve the efficiency and productivity of state-owned industries by increasing investment in technical transformation projects and earmarking several billion U.S. dollars to purchase production facilities constructed by foreign companies and advanced technology needed to upgrade China's heavy industries. J ê(⌠p Energy and Mineral Resources The Chinese have high energy needs but limited capital. As in other sectors of the state-owned economy, the energy sector suffers from high rates of waste, low utilization, and inefficiencies in production, transport, conversion, and consumption. Other problems include declining real prices, rising taxes and production costs, spiraling losses, high debt burden, insufficient investment, low productivity, low efficiency, poor management structure, environmental pollution, and inadequate technological development. J ê(⌠p Demand for energy has risen steadily in response to rapid expansion of the economy over the last 10 years; however, state controls on oil prices forced China's oil production companies to accumulate huge losses, depleting capital resources and limiting investment in explorative and enhanced recovery procedures. Such problems could constrain the ability of domestic industries to meet the energy needs of China's modernization program and lead to larger imports of energy, particularly oil, thus limiting the speed and scope of economic expansion in the 1990s and beyond. J ê(⌠p Domestic energy policies generally encourage investment in the exploration of China's vast and largely untapped energy resources. Domestic output of hydropower in 1991 was up 112% over 1980 output, coal was up 76% (making China the world's largest coal producer), and oil up 31%. But demand has also increased, and power shortages and temporary blackouts are common in some areas. Energy needs are supplied mainly by coal (about 75%), oil (around 20%), hydropower, and natural gas. Increased production of hydropower is expected as new power projects are completed. J ê(⌠p Coal: This fuel is by far China's most important source of primary energy and forms the backbone of China's energy sector. With around 900 billion metric tons (MT) of identified and recoverable reserves, China's total coal resources are more than three times the reserves in the U.S. or in the former Soviet republics. The Chinese mined over 1 billion MT of coal in 1989, 1990, and 1991. Ironically, China must import coal to meet demand in the industrial south because of shipping difficulties in the north-central regions where the coal is mined. J ê(⌠p On July 1, 1985, Occidental Petroleum signed a 30-year joint venture agreement with the Chinese to develop what could become the world's largest open-pit coal mine at Pingshuo in Shanxi province. Occidental had a 25% stake in this $650 million venture; however, falling energy prices made it unprofitable, and Occidental recently withdrew. J ê(⌠p Oil: The refining industry was transformed during the 1980s. A number of smaller refineries were shut down and most of the larger ones were consolidated in 1983 under Sinopec (China National Petrochemical Corporation). At a cost of about $10 billion, China upgraded refineries to shift output from fuel oil to more valuable products like gasoline, kerosene, diesel, and components for petrochemicals. J ê(⌠p Primary distillation capacity, 2.4 million barrels per day (b/d), is fifth largest in the world, and China now is second only to the U.S. in the ratio of upgrading capacity to distillation. Production of non-energy-use products including raw materials, lubricants, asphalt, coke, paraffin, and solvents has also increased significantly. Demand still exceeds production of many petroleum products, however, which has necessitated a growing level of imports. J ê(⌠p Increased output from China's mature eastern oil fields is questionable because of inadequate funding for exploration and development in the 1980s. In the 1990s, the government aims to spend billions of dollars to build a pipeline to carry oil east from potentially huge reserves in the remote Tarim Basin. J ê(⌠p China's ambitious offshore exploration program produced no major petroleum finds. The government has opened up selected onshore areas to foreign exploration and development. However, in the 10 years since Western companies began seismic surveys, the results have been disappointing. Some Western companies reduced expenditures or left China altogether when oil prices fell in 1986. The Chinese have begun to approach Western oil companies about the possibility of risk exploration contracts for certain parts of the East China Sea. J ê(⌠p Electric Power: Electric power was the fastest growing form of energy in the 1980s yet was the shortest in supply. Industry uses around 80% of the electricity generated; shortages and blackouts greatly reduce industrial productivity. J ê(⌠p China is believed to have the world's greatest hydropower potential, though it is not fully developed. A number of hydropower projects are planned or underway, including plans for the world's largest dam at the Three Gorges site on the Yangtze River. The dam will take about 15 years to build and is expected to generate 84 billion kilowatt hours annually. The estimated cost is at least $12 billion, for which Beijing must seek foreign loans, technology, and parts. China has imported new power plants from the West to increase its generation capacity, and these units account for approximately 20% of total generating capacity. Plans for 1992 also include spending $6.8 billion to expand power output by building 24 hydroelectric stations, 51 thermal plants, and 223 electricity substations, thus helping reduce blackouts. J ê(⌠p Natural Gas: Most natural gas is used by industry. Two-thirds of the commercial volume is consumed as raw material to make fertilizer or fuel. Over 5.3 million people are served by natural gas in the cities of Beijing, Tianjin, Shenyang, Dalian, Zhengzhou, Chengdu, and Chongqing. J ê(⌠p China's natural gas production is small in relation to its potential reserve base and crude oil production. Forty percent of China's gas production comes from the major fields in Sichuan province. Arco Petroleum (in a joint venture with Kuwaiti and Chinese oil companies) discovered a large natural gas field in the South China Sea and has embarked on a $1 billion project to build the world's longest undersea pipeline to deliver the gas to a power plant under construction in Hong Kong. An offshoot of the pipeline will deliver gas to Hainan Island. The estimated date of completion is1996. J ê(⌠p Nuclear Power: Current goals for development of nuclear power include having a 6,000 MW capacity by 2000, an additional 6,000 MW under construction by 2000, and binging on line an additional 1,200 MW every year after 2000. These goals, scaled down from initial hopes of 20,000 MW on line by 2000, may well be difficult to meet due to a lack of financial and technical resources. J ê(⌠p Minerals: China's metal and mineral resources, believed to be substantial, are largely unexplored. In 1985, China was a major producer and exporter of tin (35,000 tons produced, 70% exported), antimony (15,000 tons, 80%), tungsten (16,000 tons, 90%), and fluorspar (600,000 tons, 85%). China also exported strategic metals such as molybdenum, titanium (8,000 tons, 80%), tantalum (50 tons, 95%), and vanadium (5,000 tons, 50%). China lacks reserves of copper, chromite, nickel, and zinc. China imported $106 million worth of iron and steel from the U.S. in 1991, up from $44 million in 1990, but down from $286 million in 1989. China exported $283 million of iron and steel in 1991, $247 million in 1990, and $226 million in 1989. J ê(⌠p Environment A harmful by-product of China's rapid industrial development in the 1980s has been increased pollution. Although China has passed environmental legislation and has participated in some international anti- pollution conventions, pollution will be a serious problem in China for years to come. J ê(⌠p China is an active participant in the UN Environment Program and a signatory to the Basel Convention governing the transport and disposal of hazardous waste. China also signed the Montreal Convention for the Protection of the Ozone in 1991. J ê(⌠p The head of China's National Environmental Protection Agency (NEPA) proclaimed in 1991 that environmental protection was one of China's basic national policies, at the same time cautioning that environmental protection must be coordinated with economic development. According to NEPA, $3.2 billion was spent on pollution prevention and environmental rehabilitation from 1981-85, $8.8 billion from 1986-1990, and about $15 billion is planned for the eighth 5-year plan (1991-95). J ê(⌠p China has sought to contain its increasing industrial pollution largely through administrative procedures and efforts to increase public awareness. The heavily-polluted Pearl River delta is one of the first major industrialized areas targeted for clean-up. Officials hope that new sewage treatment plants for cities in the delta area will enable the river to support an edible fish population by the year 2000. J ê(⌠p A small environmental protection industry has also emerged. However, in some areas of China, pollution has long been considered as one of the costs associated with economic development. J ê(⌠p The question of environmental damage associated with the planned hydroelectric Three Gorges project concerns NEPA officials. While conceding that erosion and silting of the Yangtse River threaten several endangered species, officials say the hydroelectric power generated by the project would enable the region to lower its dependence on coal, thus lessening air pollution. J ê(⌠p Overall, even NEPA characterizes the environmental situation in China as grim and recognizes that increasing deforestation and desertification will threaten the base of China's economic development. J ê(⌠p Communications Railroads: Total about 54,000 km common carrier lines; 53,400 km 1.435 meter standard gauge; 600 km 1.000 meter gauge; all single track except 11,200 km double track on standard-gauge lines; 6,500 km. electrified; 10,000 km industrial lines (gauges range from 0.762 to 1.067 meters). Highways: About 980,000 km of roads; 162,000 km paved. Inland waterways: 138,600 km; about 109,800 km navigable. Pipelines: Crude, 6,500 km; refined products, 1,100 km; natural gas, 6,200 km. Ports: Dalian; Guangzhou; Huangpu; Ningbo; Qingdao; Qinhuangdao; Shanghai; Shantou; Tanggu; Xiamen; Xingang; Zhanjiang. Merchant Marine: 1,421 ships (1,000 gross registered tons (GRT) or over) totaling 14 million GRT/21 million dead-weight tons (DWT); includes 24 passenger, 42 short-sea passenger, 19 passenger- cargo, 7 cargo/training, 776 cargo, 11 refrigerated cargo, 70 container, 17 roll-on/roll-off cargo, 2 multifunction barge carrier, 181 petroleum, oils, and lubricants (POL) tanker, 9 chemical tanker, 250 bulk, 2 liquefied gas, 2 vehicle carrier, 9 combination bulk. China directly and indirectly owns an additional 183 ships (1,000 GRT or over) totaling about 6 million DWT that operate under Maltese and Liberian registry. Airports: 330 total; 260 with permanent-surface runways; fewer than 10 with runways over 3,500 m. Telecommunications: Domestic and international services are increasingly available for private use; unevenly distributed internal system serves principal cities, industrial centers, and most townships; 11 million telephones (Dec. 1989). J ê(⌠p Science and Technology Scientific and technological modernization has been a growing priority for Chinese leaders. They aim to achieve 1980s Western levels by the year 2000 by rebuilding the educational structure, sending students abroad, negotiating technological purchases and transfer arrangements with the U.S. and others, and by developing ways to disseminate scientific and technological information. Areas of most critical interest include microelectronics, computers, telecommunications, automated manufacturing, and energy. China also has had a space program since the 1960s and has launched 27 successful satellites. One particularly effective program plans to reinvest military resources in the civilian sector and emphasizes bio-space information, laser and automation technology, and research in energy and advanced materials. J ê(⌠p Although China has funded its ambitious science programs at a rate slightly higher than that accorded other priority programs, the amount spent is still not commensurate with need. Consequently, the Chinese are encouraging local industrial entities to finance and support research groups; they also have sought to encourage foreign investors to pump money and technology into joint equity and cooperative ventures. China has made rapid progress in some areas and is starting to accept that it does not always need state-of-the-art technology, because a lesser technology may prove to be more appropriate, useful, and profitable. J ê(⌠p The U.S. has continued to extend the science and technology accord which had expired in January 1987. A new 5-year agreement to extend and amend the accord, including provisions for the protection of intellectual property rights, was signed in May 1991. Japan has also increased science and technology cooperation, more than doubling funding and assistance since 1989. J ê(⌠p Trade and Investment China had long favored a policy of "self-reliance"--restricting and diversifying imports and foreign credits to avoid dependence on any one foreign country--but the current leadership has recognized that foreign trade and technology play critical roles in China's modernization and has promulgated measures to improve the investment climate. J ê(⌠p China has experimented with decentralizing its foreign trading system and has sought to integrate itself into the world trading system. In November 1991, China joined the Asia-Pacific Economic Cooperation (APEC) group, which promotes free trade and cooperation in economic, trade, investment, and technology issues. In addition, Beijing announced its formal application to rejoin the General Agreement on Tariffs and Trade (GATT), which governs much of the world's trade. J ê(⌠p China was one of the original contracting parties to the GATT in 1947, but the Republic of China withdrew a few years later. In 1986, Beijing made a formal application to rejoin, and a working party was formed to consider the terms of China's accession to the GATT. Consideration was delayed, however, due to the Tiananmen Square crackdown of 1989. The China working party met 10 times through October 1992; at the October meeting, China declared its readiness to join GATT. Nevertheless, many aspects of China's trade regime remain unclear. Western nations still express serious concerns and reservations about the eventual terms of China's accession. J ê(⌠p China will need to make changes in its state-run economy to fulfill GATT requirements that member countries must operate a predictable, open trading system on the basis of market-oriented principles. Its current system of market and administrative controls limits foreign access through such means as tariffs, import and export licensing, import substitution regulations, and foreign exchange restrictions. The government also restricts foreign entry into service sectors, such as insurance, banking, accounting, and legal services. In addition, arbitrary and inadequate legal and regulatory systems affect foreign investor's ability to do business in the country. J ê(⌠p Central planning, rather than market forces, are key to determining the composition of most Chinese exports and imports. Therefore, domestic prices for imported products are often subsidized. Government trade and investment decisions will be governed by the need to restructure the economy and by concerns about future political directions. J ê(⌠p According to Chinese statistics, their global trade totaled $136 billion in 1991, an increase of 18% over 1990. China's trade surplus dropped from $8.7 billion in 1990 to $8.1 billion in 1991. The United States, European Community, and Japan are traditional trade markets. China had a trade surplus with the United States of $12.7 billion in 1991 (see chart on p. 12). The government also is working to expand trade ties, particularly with Russia and the new Central Asian states and with India, South Korea, Vietnam, and Taiwan and other developing and newly industrialized economies in Asia, Africa, and Latin America. J ê(⌠p During the 1980s, Chinese exports averaged an annual growth rate of 13%--one matched only by South Korea, Taiwan, and Hong Kong-- making China the 13th largest exporter in 1991. To increase exports China has pursued policies such as fostering the rapid development of factories which assemble imported components into consumer goods for export to hard-currency countries. J ê(⌠p The U.S. is one of China's primary suppliers of aircraft and parts, computers and industrial machinery, raw materials, and chemical and agricultural products needed to meet 5-year plan targets. However, U.S. exporters continue to have concerns about fair market access due to China's restrictive import policy. J ê(⌠p Foreign Investment Foreign investment stalled in the aftermath of Tiananmen. Legislation and regulations designed to encourage foreigners to invest in high- priority sectors and regions resulted in more than 37,000 contracts worth nearly $46 billion in 1991. J ê(⌠p Recently, the Chinese have taken steps to improve the foreign investment climate. In 1990, the government eliminated time restrictions on the establishment of joint ventures, provided some assurances against nationalization, and allowed foreign partners to become the chairs of joint venture boards. In 1991, China granted more preferential tax treatment for wholly foreign-owned businesses and contractual ventures and for foreign companies which invest in selected economic zones or in projects encouraged by the state, such as energy, communications, and transportation. It also authorized some foreign banks to open branches in Shanghai and allowed foreign investors to purchase special "B" shares of stock in selected companies listed on the Shanghai and Shenzhen Securities Exchanges. These "B" shares are sold to foreigners but carry no ownership rights in a company. J ê(⌠p China's Foreign Assistance Program: Although a developing country, China has had a modest program of foreign aid designed to win friends and compete with Taiwan for diplomatic recognition. Developing countries in Asia and Africa have been the primary beneficiaries, receiving Chinese grants and credits amounting to nearly $7 billion between 1954 and 1985. Chinese aid has been interest-free and has taken the form of small, labor-intensive infrastructure and light industrial projects, of which textile mills were the most popular. Terms required that any Chinese employed on the projects be paid at local wage scales. The structure of the aid program is changing, however. China's direct aid to other countries, though still in evidence in selected areas primarily in Africa, has declined dramatically because Beijing now emphasizes mutually beneficial commercial ventures with other countries. J ê(⌠p J ê(⌠p FOREIGN RELATIONS Since its establishment, the People's Republic has worked vigorously to win international support for its position that it is the sole legitimate government of all China, including Hong Kong, Macao, and Taiwan. In the early 1970s, when it was recognized by most world powers, Beijing made major breakthroughs toward this goal. Beijing assumed the China seat in the United Nations in 1971 and became increasingly active in multilateral organizations. Japan established diplomatic relations with China in 1972, and the U.S. did so in 1979. The number of countries that have established diplomatic relations with Beijing has risen to 138, while 29 consider Taipei as the seat of China's government. J ê(⌠p After the founding of the P.R.C., China's foreign policy initially focused on solidarity with the Soviet Union and other communist countries. In 1950, China sent the People's Liberation Army into North Korea as "volunteers" to help North Korea halt the UN offensive which was approaching the Yalu River. After the conclusion of the Korean war, China sought to balance its identification as a member of the Soviet bloc by establishing friendly relations with India and neutralist countries, particularly in Southeast Asia. J ê(⌠p In the 1960s, after their disenchantment with the Soviet Union, Beijing competed with Moscow for political influence among communist parties and in the developing world generally. Following the 1968 Soviet invasion of Czechoslovakia and clashes in 1969 on the Sino-Soviet border, Chinese opposition to the Soviet Union increasingly reflected concern over China's own strategic position. J ê(⌠p In late 1978, the Chinese also became concerned over Vietnam's efforts to establish open control over Laos and Cambodia and to exert pressure on Thailand. In response to the Soviet-backed Vietnamese invasion of Cambodia, China fought a brief border war with Vietnam (February- March 1979) with the stated purpose of "teaching Vietnam a lesson." J ê(⌠p Chinese anxiety about Soviet strategic advances was heightened following the Soviet Union's December 1979 invasion of Afghanistan. Sharp differences between China and the Soviet Union persisted over Soviet support for Vietnam's continued occupation of Cambodia, the Soviet invasion of Afghanistan, and Soviet troops along the Sino-Soviet border and in Mongolia--the so-called "three obstacles" to improved Sino-Soviet relations. J ê(⌠p In the 1970s and 1980s China sought to create a secure regional and global environment for itself and to foster good relations with countries that could aid its economic development. To this end, China looked to the West for assistance with its modernization drive and for help in countering Soviet expansionism--which it characterized as the greatest threat to its national security and to world peace. J ê(⌠p China maintained its consistent opposition to "superpower hegemonism," focusing almost exclusively on the expansionist actions of the Soviet Union and Soviet proxies such as Vietnam and Cuba, but it also placed growing emphasis on a foreign policy independent of both superpowers. While improving ties with the West, China continued to follow closely economic and other positions of the Third World nonaligned movement, of which China was not a formal member. J ê(⌠p Recently, China has become a more visible actor internationally. Chinese leaders are regular travelers to all parts of the globe, and China has sought a higher profile in the UN and other multilateral organizations. Closer to home, China seeks to reduce tensions in Asia through its relations with North and South Korea and its broad range of ties with Japan. China also has cultivated a more cooperative relationship with members of the Association of Southeast Asian Nations (Malaysia, Singapore, Thailand, Indonesia, the Philippines, and Brunei) and has increased nonpolitical exchanges with India. These efforts flowed in part from China's perception of itself as the historic great power in East Asia and as the world's largest developing country. J ê(⌠p China's International Position Since 1989 By 1989, China's 10-year old program of economic and political reforms had increased substantially its relations with the developed world. At the same time, China's need for stability on its northern border coincided with the Soviet Union's interest in reducing the military burden of its border confrontation with China. In May 1989, Soviet Communist Party General Secretary Gorbachev visited Beijing, attracting world-wide media coverage. Reporters, including large numbers from the U.S., found themselves in the middle of pro- democracy demonstrations prompted by the death of former communist party General Secretary Hu Yaobang. The violent suppression of the demonstrations in and around Tiananmen Square on June 4 provoked a world-wide condemnation of China's violations of human rights. J ê(⌠p In the immediate aftermath of June 4, many countries reduced their diplomatic contacts with China as well as their economic assistance programs. China countered with a sustained effort to encourage resumption of normal relations. In the fall of 1990, this led to the resumption of Japan's third yen loan to China. China also worked vigorously to expand its relations with the countries of Southeast Asia. By late 1990, China had reestablished normal relations with almost all nations. Following the collapse of the Soviet Union in late 1991, China also moved to open diplomatic relations with the republics of the former Soviet Union. J ê(⌠p China has a number of border and maritime disputes. China disputes the boundary with Vietnam in the Gulf of Tonkin, and is also involved in a complex dispute with Vietnam, Malaysia, Philippines, and Taiwan over the Spratly Islands. China claims the Japanese-adminstered Senkaku-shoto (Senkaku Islands or Diaoyutai), and occupies the Paracel Islands claimed by Vietnam and Taiwan. A short section of its border with Tajikistan (the Pamir salient) is still in dispute. The border with India is also disputed, but the two governments have established a working group, which started its fourth round in February 1992. Also in that month, China and Russia ratified an agreement settling most of their eastern border. J ê(⌠p Defense J ê(⌠p The PLA. The last of the "four modernizations," announced by Zhou Enlai and supported by Deng Xiaoping, was establishment of a professional military force equipped with modern weapons and doctrine. In keeping with Deng's mandate to reform, the People's Liberation Army (PLA), which includes the strategic nuclear forces, army, navy, and air force, has demobilized about 3 million men and women since 1978 and has introduced modern methods in such areas as recruitment and manpower, strategy, and education and training. The overall size of China's armed forces is approximately 3.3 million men and women, compared to the U.S. armed forces' 1991 level of 2 million. Beijing appears committed to further troop cuts over the next few years, during which it will continue to upgrade equipment and training, especially for the air force and navy. J ê(⌠p Following the June 1989 Tiananmen crackdown, when PLA troops were used to restore control and stability, ideological correctness temporarily revived as the dominant theme in Chinese military affairs. Reform and modernization appear to have since resumed their position as the PLA's priority objectives, although the armed forces' political loyalty to the CCP remains a leading concern. J ê(⌠p Nuclear Forces and Arms Control Policy China's nuclear deterrent plays a central role in defense policy. After its first nuclear test in October 1964, Beijing deployed a modest but potent ballistic missile force, including land and sea-based intermediate-range and intercontinental ballistic missiles. J ê(⌠p The P.R.C. was the first state to pledge "no first use" of nuclear weapons. It also pledged in 1986 to abstain from further atmospheric testing of nuclear weapons. J ê(⌠p China became a major international arms exporter during the 1980s, while claiming that it had a "prudent and responsible" attitude toward arms sales. Beijing joined the Middle East arms control talks, which began in July 1991 to establish global guidelines for conventional arms transfers but announced in September 1992 that it would no longer participate because of the U.S. decision to sell F-16A/B aircraft to Taiwan. J ê(⌠p China joined the International Atomic Energy Agency in 1984 and acceded to the Nuclear Non-Proliferation Treaty in March 1992. Also in March 1992, Beijing formally undertook to abide by the guidelines and parameters of the Missile Technology Control Regime, the multinational effort to restrict the proliferation of missiles capable of delivering weapons of mass destruction. J ê(⌠p J ê(⌠p U.S.-CHINESE RELATIONS From Liberation to the Shanghai Communique As the PLA armies moved south to complete the Communist conquest of China in 1949, the American embassy followed the Nationalist government headed by Chiang Kai-shek, finally moving to Taipei later that year. U.S. consular officials remained in mainland China. The new P.R.C. Government was hostile to this official American presence, and all U.S. personnel were withdrawn from the mainland in early 1950. Any remaining hope of normalizing relations ended when U.S. and Chinese communist forces fought on opposing sides in the Korean conflict. J ê(⌠p Beginning in 1954 and continuing until 1970, the United States and China held 136 meetings at the ambassadorial level, first at Geneva and later at Warsaw. Though some progress was made in early years, by the 1960s the talks were stalemated. Finally, in the late 1960s, U.S. and Chinese political leaders decided that improved bilateral relations were in their common interest. In 1969, the United States initiated measures to relax trade restrictions and other impediments to bilateral contact. On July 15, 1971, President Nixon announced that his Assistant for National Security Affairs, Dr. Henry Kissinger, had made a secret trip to Beijing to initiate direct contact with the Chinese leadership and that he, the President, had been invited to visit China. J ê(⌠p In February 1972, President Nixon traveled to Beijing, Hangzhou, and Shanghai. At the conclusion of his trip, the U.S. and Chinese Governments issued the "Shanghai communique," a statement of their foreign policy views. (For the complete text of the Shanghai communique, see the Department of State Bulletin, March 20, 1972). J ê(⌠p In the communique, both nations pledged to work toward the full normalization of diplomatic relations. Acknowledging that all Chinese on either side of the Taiwan Strait maintain that there is only one China and that Taiwan is part of China, the U.S. agreed not to challenge this position. The statement enabled the two sides temporarily to set aside the "crucial question obstructing the normalization of relations"-- Taiwan--and to open trade and other contacts. J ê(⌠p Liaison Office, 1973-78 In May 1973, in an effort to build toward the establishment of formal diplomatic relations, the U.S. and China established the United States Liaison Office (USLO) in Beijing and a counterpart Chinese office in Washington, DC. In the years between 1973 and 1978, such distinguished Americans as David Bruce, George Bush, Thomas Gates, and Leonard Woodcock served as chiefs of the USLO with the personal rank of Ambassador. J ê(⌠p President Ford visited China in 1975 and reaffirmed the U.S. interest in normalizing relations with Beijing. Shortly after taking office in 1977, President Carter again reaffirmed this interest expressed in the Shanghai communique. The United States and China announced on December 15, 1978, that the two governments would establish diplomatic relations on January 1, 1979. J ê(⌠p Normalization In the Joint Communique on the Establishment of Diplomatic Relations dated January 1, 1979, the United States transferred diplomatic recognition from Taipei to Beijing. The U.S. reiterated the Shanghai communique acknowledgment of the common Chinese position that there is only one China and that Taiwan is a part of China; Beijing agreed that the American people would continue to carry on commercial, cultural, and other unofficial contacts with the people of Taiwan. The Taiwan Relations Act made the necessary changes in U.S. domestic law to permit such unofficial relations with Taiwan to flourish. J ê(⌠p U.S.-China Relations Since Normalization Vice Premier Deng Xiaoping's January 1979 visit to Washington, DC initiated a series of important, high-level exchanges, which continued until the spring of 1989. This resulted in many bilateral agreements-- especially in the fields of scientific, technological, and cultural interchange and trade relations. Since early 1979, the United States and China have initiated hundreds of joint research projects and cooperative programs under the Agreement on Cooperation in Science and Technology, the largest bilateral program. These programs cover diverse subjects, ranging from high-energy physics to earthquake studies. J ê(⌠p On March 1, 1979, the United States and China formally established embassies in Beijing and Washington, DC. During 1979, outstanding private claims were resolved, and a bilateral trade agreement was concluded. Vice President Walter Mondale reciprocated Vice Premier Deng's visit with an August 1979 trip to China. This visit led to agreements in September 1980 on maritime affairs, civil aviation links, and textile matters, as well as a bilateral consular convention. J ê(⌠p As a consequence of high-level and working-level contacts initiated in 1980, our dialogue with China broadened to cover a wide range of issues, including global and regional strategic problems, politico- military questions, including arms control, UN and other multilateral organization affairs, and international narcotics matters. J ê(⌠p The expanding relationship that followed normalization was threatened in 1981 by Chinese objections to the level of U.S. arms sales to Taiwan. Secretary of State Alexander Haig visited China in June 1981 in an effort to resolve Chinese questions about America's unofficial relations with Taiwan. Eight months of negotiations produced the U.S.-China joint communique of August 17, 1982. In this third communique, the U.S. stated its intention to reduce gradually the level of arms sales to Taiwan, and the Chinese described as a fundamental policy their effort to strive for a peaceful resolution to the Taiwan question. Meanwhile, Vice President Bush visited China in May 1982. J ê(⌠p High-level exchanges continued to be a significant means for developing U.S.-China relations in the 1980s. President Reagan and Premier Zhao made reciprocal visits in l984. In July 1985, President Li Xiannian traveled to the United States, the first such visit by a Chinese head of state. Vice President Bush visited China in October 1985 and opened the U.S. Consulate General in Chengdu, this country's fourth consular post in China. Further exchanges of cabinet-level officials occurred from 1985-89, capped by President Bush's visit to Beijing in February 1989. J ê(⌠p In the period before the June 3-4, 1989, assault on Tiananmen Square and subsequent repression in China, a large and growing number of cultural exchange activities undertaken at all levels gave the American and Chinese peoples broad exposure to each other's cultural, artistic, and educational achievements. Numerous Chinese professional and official delegations visited the United States each month. Many of these exchanges continue in the wake of Tiananmen. More than 50,000 Chinese scholars and students are currently studying or conducting research in the U.S., roughly 2,000 Americans are studying or teaching in China, and approximately 17,000 Chinese citizens emigrate to the U.S. every year. J ê(⌠p Bilateral Relations After Tiananmen Following the Chinese authorities' brutal suppression of supporters of political reform in June 1989, the U.S. and other governments enacted a number of measures to express their condemnation of Chinese action that violated the basic human rights of its citizens. The U.S. suspended high-level official exchanges with China and weapons exports from the U.S. to China. The U.S. also imposed a series of economic sanctions. In the summer of 1990, at the G-7 Houston summit, Western nations called for renewed political and economic reforms in China, particularly in the field of human rights. J ê(⌠p The U.S.-China trade relationship was disrupted by Tiananmen, and U.S. investors' interest in China dropped dramatically. The U.S. Government also responded to the political repression by suspending certain trade and investment programs on June 5 and 20, 1989. Congress followed with several bills that year containing sanctions against the Chinese. Briefly: J ê(⌠p -- Government-to-government sales and commercial exports of weapons of dual-use civilian technology items for the Chinese police or military were halted; -- Consideration of an increased liberalization of Coordinating Committee for Multilateral Export Controls (COCOM) restrictions was suspended; -- The Overseas Private Investment Corporation (OPIC) and Trade and Development Program (TDP) suspended all new activities; -- Licenses for items on the munitions list (including satellites) were suspended with a few exceptions; and -- The U.S. opposed new loans to China by international financial institutions, except for projects meeting basic human needs. J ê(⌠p As of June 1993, the U.S. retains in place sanctions on China, including the suspension of military assistance. Bilateral diplomatic meetings in pursuit of U.S. vital interests have occurred. Commercial relations have returned to pre-Tiananmen levels, although bilateral assistance programs generally remain suspended. J ê(⌠p U.S. diplomatic and consular services in China have not been disrupted since the June 1989 assault on Tiananmen and continue during the current sanctions. J ê(⌠p U.S.-Chinese Economic Relations In the aftermath of Tiananmen, new contracted U.S. investment in 1990 was $357 million, 44% lower than in the previous year. Since 1990, however, foreign investment has rebounded strongly, with commitments of more than 85% in 1991. Contracted U.S. investment rose 53% to $548 million in 1991. J ê(⌠p Even after Tiananmen, U.S. direct investment in China covered a wide range of manufacturing sectors, several large hotel projects, and a heavy concentration in offshore oil and gas development in the South China Sea. U.S. companies have entered agreements establishing more than 1,700 equity joint ventures, contractual joint ventures, and wholly foreign-owned enterprises in China. Over 100 U.S.-based multinationals have projects, some with multiple investments. The majority of U.S.-invested ventures are relatively small-scale, i.e., under $1 million. J ê(⌠p China's expanded exports to the U.S. now account for almost 25% of China's foreign sales, while China's pervasive system of trade barriers has restricted opportunities for U.S. exporters, creating a U.S. trade deficit with China of $12.7 billion in 1991. In reaction, on October 10, 1991, the U.S. began an investigation (under the authority of Section 301 of the Trade Act of 1974) into China's market access barriers. Following several rounds of bilateral talks, the U.S. reached a market access agreement with China on October 10, 1992. This agreement will significantly lower Chinese barriers to U.S. exports. Leading up to this agreement, the U.S. and China had agreed, in January 1992, on adequate protections for intellectual property rights and, in August 1992, on banning exports to the U.S. of Chinese prison labor products. The U.S. also has a bilateral tax treaty with China but no bilateral investment treaty. J ê(⌠p China's Most-Favored-Nation (MFN) Status There has been intense debate in the U.S. regarding the extension of China's most-favored-nation status, which allows non-discriminatory tariff treatment for Chinese exports to the U.S. The reciprocal granting of MFN treatment was the main pillar of the U.S.-China Trade Agreement signed in 1979, which marked the beginning of normal commercial relations between the two countries. As a non-market- economy country, China's MFN status must be renewed annually by a U.S. presidential waiver stipulating that China meets the freedom of emigration requirements set forth in the Jackson-Vanik amendment to the Trade Act of 1974. China had received the waiver routinely prior to 1989, but after Tiananmen, although the presidential waiver continued, Congress began to exert strong pressure to oppose MFN renewal. In 1991 and 1992, Congress voted to place conditions on MFN renewal for China, but those conditions were vetoed by the Bush Administration, which stressed the importance of our relationship with China and the belief that MFN was not the correct tool to exert pressure on China but would only result in isolating it. J ê(⌠p Given China's growing importance in the global community, the U.S. does not want to isolate it. It is the world's most populous state, the fastest growing major economy, and a permanent member of the UN Security Council. J ê(⌠p On May 28, 1993, President Clinton announced a unified congressional and Executive Branch policy and stated that the core of this policy will be a resolute insistence upon significant progress on human rights in China. He signed an Executive Order that will extend MFN status for China for 12 months. Extension of MFN in 1994 will depend on whether China makes significant progress in improving its human rights record. The order lays out particular areas that will be examined in 1994, including respect for the Universal Declaration of Human Rights and the release of citizens imprisoned for the non-violent expression of their political beliefs. J ê(⌠p In addition, the U.S. has concerns in the areas of trade and arms proliferation and will use existing statutes to address those concerns. The President's Executive Order directs the Secretary of State and other Administration officials to pursue resolutely all legislative and executive actions to ensure China abides by international standards. For example, if the Administration finds that China has violated the guidelines and parameters of the Missile Technology Control Regime in weapons sales, existing U.S. law provides for strict sanctions against nations that violate these guidelines. J ê(⌠p J ê(⌠p CHINESE DIPLOMATIC REPRESENTATION Ambassador--Li Daoyu J ê(⌠p Chancery at 2300 Connecticut Avenue NW, Washington, DC 20008; Tel.: (202) 328-2500 through 2502 J ê(⌠p There are Chinese Consulates General in Chicago, Houston, Los Angeles, New York, and San Francisco. J ê(⌠p J ê(⌠p U.S. REPRESENTATION Ambassador--J. Stapleton Roy J ê(⌠p Embassy at Xiu Shui Bei Jie 3, Beijing 100600 (mailing address from U.S.: PSC 461, Box 50, FPO AP 96521-0002-- use U.S. domestic postage rates); Tel.: (86) (1) 532-3831. J ê(⌠p There are U.S. Consulates General in Chengdu, Guangzhou, Shanghai, and Shenyang. n J ê(⌠p J ê(⌠p The Chinese Dynasties J ê(⌠p Xia (Hsia) Dynasty--c. 21st-16th centuries BC Shang (Yin)--c. 16th century-1066 BC Zhou (Chou)--c. 1066-221 BC J ê(⌠p Western Zhou (Chou)--c. 1066-771 BC Eastern Zhou (Chou)--c. 770-256 BC Spring and Autumn Period--772-481 BC Warring States Period--403-221 BC J ê(⌠p Qin--221-206 BC Han--206 BC-220 AD Six Dynasties--220-439 AD J ê(⌠p Three Kingdoms-- 220-265 Wei--220-265; Shu--221-263; Wu--222-280 Western Jin (Tsin)--265-316 Eastern Jin (Tsin)--317-420 Sixteen States--304-439 J ê(⌠p Southern and Northern Dynasties Southern Song (Sung) 420-479 Qi (Ch'i) 479-502 Liang 520-557 Chen (Ch'en) 557-589 J ê(⌠p Northern Northern Zhou (Chou) 557-581 Western Wei 535-557 Northern Qi (Ch'i) 550-577 Eastern Wei 534-550 Northern Wei 386-534 J ê(⌠p Sui 581-618 Tang (T'ang) 618-907 J ê(⌠p Five Dynasties and Ten Kingdoms Period 907-979 Latter Liang--907-923 Latter Tang (T'ang)--923-936 Latter Jin (Tsin)--936-946 Latter Han--947-950 Latter Zhou (Chou)--951-960 10 Kingdoms--902-979 J ê(⌠p Song (Sung)--960-1279 Liao (Kitan)--907-1125 Western Xia--1032-1227 Jin (Nurchen)--1115-1233 Yuan (Mongol)--1279-1368 Ming--1368-1644 Qing (Ch'ing or Manchu)--1644-1911 Republic--1912-1949 People's Republic1--1949-present. J ê(⌠p 1 The Taiwan authorities are currently recognized by 29 countries as the "Republic of China." J ê(⌠p J ê(⌠p The Pinyin System of Romanization On January 1, 1979, the Chinese Government officially adopted the "pinyin" system for spelling Chinese names and places in Roman letters. A system of romanization invented by the Chinese, pinyin has long been widely used in China on street and commercial signs as well as in elementary Chinese textbooks as an aid in learning Chinese characters. Variations of pinyin are also used as the written forms of several minority languages. J ê(⌠p Pinyin has now replaced other conventional spellings in China's English-language publications. The U.S. Government has also adopted the pinyin system for all names and places in China. For example, the capital of China is now spelled "Beijing" rather than "Peking." J ê(⌠p In the pinyin system, letters are pronounced much as they would be in American English with the following exceptions. J ê(⌠p Complex initial sounds: c -- like the t's in it's q -- like the ch in cheap x -- like the sh in she z -- like the ds in lids zh -- like the j in just J ê(⌠p Final Sounds: e -- Pronounced like"uh" eng -- like the ung in lung ai -- as in aisle ui -- pronounced way uai -- like the wi in wide i -- like the i in skin* ua -- like the wa in waft ao -- like the ow in now ian -- pronounced yen ou -- like the ow in know uan -- like the wan in wander J ê(⌠p *When zh, ch, sh, zh are followed by an "i," the "i" is pronounced like an r. J ê(⌠p Further Information J ê(⌠p The Department of Commerce publishes the Overseas Business Reports and Foreign Economic Trends Reports, which contain information on market research, foreign trade corporations, contract negotiations, shipping and insurance, P.R.C. tariffs, a section on travel in China, and other topics of interest to Americans who want to do business with China. The report may be obtained free of charge from the Department of Commerce. J ê(⌠p Other U.S. Government documents on China include: Annual Human Rights Report; and National Trade Estimate. J ê(⌠p Useful Addresses U.S. Offices Office of Chinese & Mongolian Affairs U.S. Department of State Washington, DC 20520 Tel. (202) 647-6300 FAX: (202) 647-6820. J ê(⌠p American Embassy Beijing Xiu Shui Bei Jie 3 Beijing 100600 People's Republic of China Tel. (86)(1)532-3831 FAX: (86)(1) 532-3178 J ê(⌠p American Consulate General Guangzhou Consulate Tower No. 1 South Shamian Street Shamian Island, Guangzhou 200031 People's Republic of China Tel.(86) (20) 888-8911 FAX: (86) (20) 886-2341. J ê(⌠p American Consulate General Shanghai 1469 Huai Hai Zhong Lu Shanghai 200031 People's Republic of China Tel. (86) (21) 433-6880 FAX: (86) (21) 433-4122. J ê(⌠p American Consulate General Shenyang 40 Lane 4, Section 5, Sanjing St. Heping District Shenyang, Liaonong People's Republic of China Tel. (86) (24) 282-0000 FAX: (86) (24) 282-0074. J ê(⌠p American Consulate General Chengdu Lingshiguan Lu No. 4 Chengdu, Sichuan 610041 People's Republic of China Tel. (86) (28) 558-9642 FAX: (86) (28) 558-8352. J ê(⌠p When calling the phone or fax numbers of a post in another province from within the country, replace the country code (86) with a 0. J ê(⌠p J ê(⌠p Chinese Offices J ê(⌠p Embassy of the People's Republic of China 2300 Connecticut Avenue NW Washington, DC 20008 Tel. (202) 328-2500. J ê(⌠p Consulate General of the People's Republic of China New York 520 - 12th Avenue New York, New York 10036 Tel. (212) 279-4275. J ê(⌠p Consulate General of the People's Republic of China San Francisco 1450 Laguna Street San Francisco, California 94115 Tel. (415) 563-4885. J ê(⌠p Consulate General of the People's Republic of China Houston 3417 Montrose Blvd. Houston, Texas 77006 Tel. (713) 524-4311. J ê(⌠p Consulate General of the People's Republic of China Chicago 104 So. Michigan Avenue, Suite 900 Chicago, Illinois 60603 Tel. (3l2) 346-0287. J ê(⌠p Consulate General of the People's Republic of China Los Angeles 502 Shatto Place, Suite 300 Los Angeles, California 90020 Tel. (213) 380-2507. J ê(⌠p J ê(⌠p U.S.-China Trade Advice J ê(⌠p U.S. Department of Commerce International Trade Administration Office of China and Hong Kong Affairs 14th and E Streets, NW. Rm. 2317 Washington, DC 20230 Tel. (202) 377-3583 J ê(⌠p U.S.-China Business Council 1818 N St. NW Suite 500 Washington, DC 20036 Tel. (202) 429-0340. J ê(⌠p J ê(⌠p Travel Contacts J ê(⌠p China Travel Service (Luxingshe) Head Office: Xidan Building Beijing, (86) (1) 667-850 HK: 77 Queens Road, Central, Hong Kong (852) 5-259121. J ê(⌠p Cultural Exchange National Association for Foreign Student Affairs Special Projects 1860 19th Street, NW Washington, DC 20009 Tel (202) 462-4811. J ê(⌠p Committee on Scholarly Communication with the People's Republic of China National Program of Scholarly Exchanges with the People's Republic of China 2101 Constitution Ave. NW Washington, DC 20418 Tel. (202) 334-2718. J ê(⌠p National Committee on U.S.-China Relations 777 United Nations Plaza--Room 9B New York, New York 10017 Tel. (212) 922-1385. (###) J ê(⌠p J ê(⌠p TAIWAN Taiwan was attached administratively to Fujian province in 1683; the Imperial Chinese Government made it a separate province in 1886. During the 18th and 19th centuries, migration from China's coastal provinces of Fujian and Guangdong steadily increased, and Chinese supplanted aborigines as the dominant population group. J ê(⌠p In 1895, as a result of the first Sino-Japanese War, China ceded the island to the Japanese Empire rather than give up Manchuria. Japanese rule continued on the island until 1945, when the Republic of China formally "repossessed" Taiwan and unilaterally proclaimed its retrocession to China under the Cairo and Potsdam agreements. J ê(⌠p During the immediate postwar period, the mainland Chinese Kuomintang (KMT) administration of Taiwan was repressive and corrupt, leading to native Taiwanese resentment. Anti-mainlander violence erupted on February 28, 1947, and was brutally suppressed by KMT troops. Toward the end of the civil war on the China mainland, some 2 million refugees, drawn primarily from military, government, and business circles, fled to Taiwan. J ê(⌠p After the victory of the Chinese Communist Party (CCP) in 1949, the KMT established a government-in-exile in Taiwan. KMT capitulation to the CCP was considered imminent in early 1950; the U.S. decided not to intervene to prevent this outcome. J ê(⌠p U.S. Involvement America's policy on Taiwan changed with the June 1950 North Korean invasion of South Korea. At that time, the United States interposed the Seventh Fleet in the 160-kilometer-wide Taiwan Strait for two reasons: to prevent either party to the Chinese civil war from widening the Korean conflict into a pan-Asian war and to prevent Taiwan from falling into hostile hands, thereby posing a threat to American forces in Japan. J ê(⌠p In the context of continuing conflict on the Korean peninsula with active P.R.C. participation, the United States resumed and expanded its economic and military aid to the KMT authorities on Taiwan and formalized its security commitment in the 1954 mutual defense treaty with the Republic of China J ê(⌠p Taiwan's Development Since 1949 Taiwan has developed steadily into a major international trading power. Tremendous prosperity on the island has brought economic and social stability. Taiwan maintains strong economic ties to the U.S., Japan, and other economies in Asia and Europe. J ê(⌠p Derecognition of Taiwan On January 1, 1979, the U.S. changed its diplomatic recognition from Taipei to Beijing. In the U.S.-P.R.C. joint communique that formalized the change, the United States recognized the Government of the P.R.C. as the sole legal Government of China and acknowledged the Chinese position that there is but one China, and Taiwan is part of China. The joint communique also stated that, "within this context, the people of the United States will maintain cultural, commercial, and other unofficial relations with the people of Taiwan." J ê(⌠p On April 10, 1979, President Carter signed into law the Taiwan Relations Act (PL 96-8), which created legal authority for the conduct of unofficial relations with Taiwan. U.S. commercial and cultural interaction with the people of Taiwan is facilitated through the American Institute in Taiwan (AIT), a non-governmental entity. AIT maintains headquarters in Rosslyn, Virginia, and offices in Taipei and Kaohsiung, Taiwan. J ê(⌠p At the time of derecognition, the United States notified the Taiwan authorities of our intent to terminate the 1954 Mutual Defense Treaty, and the termination took effect January 1, 1980. However, the United States declared on December 15, 1978, that it "continues to have an interest in the peaceful resolution of the Taiwan issue and expects that the Taiwan issue will be settled peacefully by the Chinese themselves." J ê(⌠p Since derecognition, the U.S. has continued the sale of defensive military equipment to Taiwan. On August 17, 1982, the U.S. and the P.R.C. issued a joint communique in which the P.R.C. cited its "fundamental policy" of striving for a peaceful solution to the Taiwan question. The U.S. stated in the communique that "it does not seek to carry out a long-term policy of arms sales to Taiwan, that its arms sales to Taiwan will not exceed, either in qualitative or in quantitative terms, the level of those supplied in recent years since the establishment of diplomatic relations between the United States and China, and that it intends to reduce gradually its sales of arms to Taiwan." J ê(⌠p In conjunction with the issuance of the August 17, 1982, communique, President Reagan stated: J ê(⌠p regarding future U.S. arms sales to Taiwan, our policy, set forth clearly in the communique, is fully consistent with the Taiwan Relations Act. Arms sales will continue in accordance with the Act and with the full expectation that the approach of the Chinese Government to the resolution of the Taiwan issue will continue to be peaceful....The position of the U.S. Government has always been clear and consistent in this regard. The Taiwan question is a matter for the Chinese people, on both sides of the Taiwan Strait, to resolve. We will not interfere in this matter or prejudice the free choice of, or put pressure on, the people of Taiwan in this matter. At the same time, we have an abiding interest and concern that any resolution be peaceful. J ê(⌠p Taiwan-P.R.C. contacts Over the past few years, Taiwan has relaxed restrictions on unofficial and some semi-official contacts with the P.R.C.. As a result, cross- strait interaction has mushroomed. More than 1 million Taiwan residents have visited the P.R.C. each year since November 1987, when the Taiwan authorities lifted the ban on private travel there. As of May 1990, members of the Legislative Yuan and the ruling Nationalist Party can also travel to the mainland. Indirect trade, mostly through Hong Kong, reached about $6 billion in 1991. Indirect investment, although technically still prohibited, totaled about $3 billion by 1992. J ê(⌠p A number of factors have contributed to this upsurge. Taiwan residents born in mainland China have visited their homes and relatives. The indirect trade runs heavily in Taiwan's favor, providing another outlet for the island's booming economy. A lure for investment by Taiwan businessmen in the P.R.C. is the cheaper labor costs there, an advantage Taiwan itself is losing as economic success drives up wages. J ê(⌠p The upswing, combined with domestic political liberalization on Taiwan, has resulted in more open discussion of the future of Taiwan, including the option of independence, to which Beijing is strongly opposed. J ê(⌠p While condemning the P.R.C. for the use of force to crush the pro- democracy movement in June 1989, Taiwan leaders have continued their policy of gradually liberalizing guidelines on contacts. Visits, trade, and investment suffered a temporary slowdown during the summer of 1989 but have now resumed an earlier upward trend. J ê(⌠p The U.S. has welcomed increased contact between people in both sides of the Taiwan Strait as a step toward a reduction of tension and an environment conducive to the eventual peaceful resolution of outstanding differences. J ê(⌠p Note: A separate Background Notes, describing Taiwan's distinctive political, economic, and social situation, may be purchased from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. (###) J ê(⌠p J ê(⌠p Military Since 1988, the military budget has increased approximately 22% annually (when adjusted for inflation), but its percentage of GNP (3- 4%) has remained the same since around 1980. Active military, around 3 million; reserves estimated at 800,000. J ê(⌠p Branches: Chinese People's Liberation Army (PLA) (est.) 2.3 million; PLA Navy (including Marines) (est.) 200,000; PLA Air Force (est.) 400,000. An additional (est.) 100,000 troops work in the nuclear missile forces. By early 1990, the Chinese People's Armed Police (PAP), numbered about 500,000. (###) J ê(⌠p J ê(⌠p Travel Notes Travel by American citizens to China grew tremendously in the 1980s. A sharp drop after the events of June 1989 has largely been reversed. Chinese travel to the U.S. continues to grow. J ê(⌠p Entry: To enter the People's Republic of China, a U.S. citizen must have a visa. Tourist visas for individuals were formerly difficult to obtain, but official policy toward individual travel has relaxed, facilities have improved, and a well-planned private trip is now feasible. More than 600 major Chinese urban and tourist centers are now open to unrestricted travel. Unless you speak Chinese, however, you should plan to visit only the most popular tourist areas. J ê(⌠p You may apply for a tourist visa in person or by mail at the Chinese embassy in Washington, DC, or at a Chinese consulate in Chicago, Houston, Los Angeles, New York, or San Francisco. (The current cost of a visa for China is $10.) To apply you must submit 2 visa application forms, a valid passport, two photographs, and the fee. Proof of intended travel, such as airline tickets or hotel reservations, is also required. J ê(⌠p Visas can take up to 10 working days to process; payment of an additional fee may expedite the process. Contact the nearest office for complete information well in advance of your departure date. J ê(⌠p Visas for tour group members are usually obtained by the travel agencies as part of the tour package. China International Travel Service (CITS) has exclusive responsibility for all foreign tourism in China. You may book a CITS tour through a number of travel agencies and airlines in the United States and abroad. You may contact the China National Tourist Office at: 60 E. 42nd Street, Suite 3126; New York, NY 10165; (212) 867-0271. Tour members with special interests, such as visits to hospitals or universities, should notify the tour organizer to arrange for such visits. J ê(⌠p Business visas are issued on the basis of an invitation from one of the Chinese foreign trade organizations. Should you wish to visit China for business purposes, correspond directly with the appropriate organization in China (e.g., China National Machinery Import-Export Corporation). J ê(⌠p Persons transiting China must have in their possession a valid Chinese visa, even if they do not leave the airport or carrier; otherwise, they may be subject to a $1,000 fine. J ê(⌠p Persons in Hong Kong may take short tours to Guangzhou (Canton) and other locations in China. Space on these tours is sometimes available on short notice. Written inquiries may be sent to any of the various private travel agencies in Hong Kong. J ê(⌠p AIDS test: In addition to the requirements above, long-term (6 months or longer) visitors to China must have an AIDS test. Tests can be given in China. If you have the test done in the United States, the results must indicate the test was given by a government facility such as your state's health department; if done at a private health facility, the results must be notarized by a notary public. J ê(⌠p Immunizations: Information on health precautions for travelers can be obtained in the United States from the Center for Disease Control (404- 332-4559), the U.S. Public Health Service, private physicians, and inoculation centers. J ê(⌠p The U.S. Public Health Service recommends diphtheria/tetanus and polio vaccines for all travelers abroad. For China, most health warnings are directed at those who plan extended travel or travel outside major urban areas. A gamma globulin shot may offer protection against hepatitis A. J ê(⌠p In addition, immunizations for Japanese B encephalitis (JE) are recommended during the epidemic summer months for visitors planning to stay longer than 2 or 3 weeks. At present, no vaccine for JE is available in the United States, but it can be obtained in Japan or Hong Kong. Malaria occurs particularly in rural areas and in southern China. J ê(⌠p Depending on the season and destination, you may need to take anti- malarial drugs, use insect repellant, and take other measures to reduce contact with mosquitoes. A yellow fever vaccination certificate is required from travelers coming from infected areas. Visitors are advised not to drink the tapwater in China. J ê(⌠p Hotel rooms are almost always supplied with boiled water, which is safe to drink. Water purification tablets might also prove useful in other situations. Raw fruits and vegetables and shellfish are common sources of hepatitis and intestinal parasites. (###) J ê(⌠p J ê(⌠p Published by the United States Department of State--Bureau of Public Affairs--Office of Public Communication--Washington, DC August 1993--Managing Editor: Peter A. Knecht J ê(⌠p Department of State Publication 7751--Background Notes Series J ê(⌠p Contents of this publication are not copyrighted unless indicated. If not copyrighted, the material may be reproduced without consent; citation of the publication as the source is appreciated. Permission to reproduce any copyrighted material (including photos and graphics) must be obtained from the original source. J ê(⌠p For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC, 20402. (###) J ê(⌠p #ENDCARD