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AVAILABLE from China Under the Four Modernizations DOCUMENT RESUME 80 235 108 SO 015 042 TITLE China under the Four Modernizations: Part 2. Selected Papers Submitted_to the Joint Economic Committee. Congress of the United States, Ninety-Seventh Congress; Second Session. INSTITUTION Joint Economic Committee, Washington, D.C. PUB DATE 30 Dec 82 NOTE 385p.; For a related document, see SO 015 041. Tables And figures marginally legible due to small print type. AVAILABLE FROM Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402 (Stock No. 052-070-05798-0, $7.50). PUB TYPE Legal/Legislative/Regulatory Materials (090) -- Viewpoints (120) EDRS PRICE MF01/PC16 Plus Postage. DESCRIPTORS Communism; *Economic Development; *Economics;_ Foreign Countries; *Foreign Policy; *International Relations; International Trade; *Modernization IDENTIFIERS *China; Imports; Japan; United States ABSTRACT The politics and performance of the post-Mao Chinese government (1976 to the present) in the areas of foreign economic relations -and Sino=American normalization are examined. Realizing that the four modernizations program for bringing up to date agriculture, industry, science and technology, and defense,initiated by Mao's successors in 1977, was too ambitious,China's current leadership iS in the process of adjusting, reorienting, and retrenching the program into something more pragmatic, realistic, and attainable. Included among the topics discussed in this publication are: China's international trade and finance;China's capital construction and the prospects for foreign participation; China's hard currency export potential and import capacity through 1985; Sino-Japanese economic relations; China's grain imports;_Chinese general agreement on tariff and trade; normalization of U.S. commercial relations with Chinaf recent developments in China's trade practices; emerging functions of formal legal institutions in China's modernization; recent developments in China's treatment of intellectua property; U.S. firms in China trade; overcoming hindrances and impedimentt in U.S.-Chinese commercial negotiations; and the U.S.-China Joint Economic Committee. (RM) *********************************************************************** * Reproductions supplied by EDRS are the best that can be made * * from the original document. * *********************************************************************** U.S. DEPARTMENT OF EDUCATION NATIONAL. INSTITUTE OF EDUCATION EDUCATIONAL RESOURCES INFORMATION CENTER (ERIC) This document has been reproduced as 97th Congress .101NT ('OMMI'VI'EE PRINT receiyed from the Person or organization 2d SeSsion originating it. )(Minor changes have been made to improve reproduction quality. Points of wow or opinions stated in thisdocu merit do riot necessarily represent official ME position or policy. CHINA UNDER THE FOUR MODERNIZATIONS Part 2 SELECTED PAPERS SUBMITTED TO THE JOINT ECONOMIC COMMITTEE CONGRESS OF THE UNITED STATES DECEMBER 30, 1982 Printed for the use of the Joint Economic Committee U.S. GOVERNMENT PRINTING OFFICE 91 -930 0 WASHINGTON : 1982 For sale by the Superintendent of Documents, U.S. Government Printing Olnce Washington, 11.1'. 20402 JOINT ECONOMIC COMMITTEE (Created pursuant to sec. 5).,) of Public Law 301, 79th Cong.) IIOUSE OF REPRESENTATIVES SENATE HENRY S. REUSS, Wisconsin. Chairman ROGER W. JEPSEN, Iowa, Vice Chairman RICHARD BOLLING. Missouri WILLIAM V. ROTH, JR., Delaware LEE II. HAMILTON, Indiana JAMES ABDNOR, South Dakota GILLIS W. LONG, Louisiana STEVEN D. SYMMS, Idaho PARREN J. MITCHELL. Maryland PAULA HAWKINS. Florida AUGUSTUS F. HAWKINS. California MACK MATTINGLY, Georgia CLARENCE J. BROWN, Ohio LLOYD BENTSEN. Texas MARGARET M. HECKLER, Massachusetts WILLIAM PROXMIRE, Wisconsin JOHN II. ROUSSELOT, California EDWARD M. KENNEDY, Massachusetts CHALMERS P. WYLIE, Ohio PAUL S. SARBANES, Maryland JAMES K. GALBRAITR, Executive Director Baurf: R. BARTLETT, Deputy Director 411) or LETTERS OF TRANSMITTAL DECEMBER 27, 1982. To the Members of the Joint Economic Committee: I am transmitting for the use of the Joint Et:, nomic Committee, Congress, and the interested public a compilation of papers assess- ing the economy of China entitled "China Under the Four Modern- izations, Part 2." This compilation contains current information and analyses of China's foreign economic relations We are grateful to the Congressional Research Service of the Li- brary of Congress for making available the services of Jahn F. Hardt, who helped plan the scope of the research and coordinated and edited the contributions.- Dr. Hardt was assisted by Kate T. Tomlinson, formerly of the Congressional Research Service staff. The project was supervised for the Joint Economic Committee by Richard F. Kaufman. The views contained in this study are not necessarily those of the Joint Economic Committee or of individual Members. Sincerely, HENRY S. REUSS, Chairman, Joint Economic Committee. DECEMBER 22, 1982. Hon. Henry S. Reuss, Chairman, Joint Economic Conzmittee, Congress of the United States, Washington, D.C. DEAR MR. CHAIRMAN: Transmitted herewith is a volume of stud- ies on the Chinese economy entitled "China Under the Four Mod- ernizations, Part 2." The studies were written by specialists who were invited to contribute because of their expertise about China. The authors come from universities, research organizations, and agencies of the Federal Government. Views expressed in the papers are those of the individual authors and do not necessarily represent the views of their organizations or of members of the Joint Economic Committee. Sincerely, RICHARD F. KAUFMAN, Assistant Director, Joint Economic Committee. CONTENTS cHINA UNDER THE FOUR MODERNIZATIONS Page LeIterS of Transmittal III Sunimary--John F. Hardt 1 IV. FO REIGN ECONOMIC China's International Trade and FinanceJohn L. Davie and Dean W Carver 19 China's Capital Construction: Current Retrenchment and Prospects for For eign Participation=7Nai-Ruonn Chen 48 China's Hard Currency Export Potential and Import Capacity Through 1985Damian T. Gullo -83 Sino-Japanese Economic Relz-itionsRichard K. NantO 109 China's Grain ImportsFrederic M. Sur-Is 127 China and the General Agreement on Tariffs and Trade (GATT)Florizelle B. User 137 V. SINO-AMERICAN NORMALIZATION Normalization of U.S. Commercial Relations With the People's Republic of China: United States Statutory and Regulatory AspectsVladimir N. Pre= 151 'J.S.-PRC Trade Normalization: Effects on U.S. Imports a-nd EMPIOYMetit -- Thomas Bayard, James Orr, Joseph Pelzman, and Jorge-Perez-Lopez 172 Recent Developments in China's Trade Practices, 1978-81Liliafia Monk and A. .Jackson Rich 210 Emerging Functions of Formal Legal Institutions in China's Moderniz-ation Stanley B. Liihman 235 Recent Developments in China's Treatment of Intellectual PropertyMichael Kirk and David-Denny 290 Unfrozen Assets: The-1979 Claims Settlement Between the United States and ChinaNatalie G. Lichtenstein 316 U.S. Firms in the PRC Trade The Sweet and Sour China MarkenHenry J. Groen Overcoming- Hindrances and Impediments in U.S.-Chinese Commercial Nego- :::334(218593 tiations: The Experience of the Control Data CorporationJohn W. De Pauw The U.S.-China Joint Economic CommitteePatricia A Ilaas. rI SITAffARY By .folin P. Hardt r.M-01)1.11{N tz.vrio:c : :V ROCKY COURSE The determination to modernize the economy ofthe People's_Repub lie of China on the course initiated byAfao's successors in 1977 continues. The drive toward noi.muliyAit ion of China's economicrelations With Japan, the'nited States and t he otheradvanced_industrialeconomies is i.esithirig in Melva:411g ,logiT('S of interdependence. I fowever. the Four Medernizations. the progrtiln formodernizing knit iiee. industry; science and technology; and defense hasunder- gone considerable changes since it wasfirst. announced in 1977. Having eCalized thitt itaS much too ambitions; given China's currentcapabili- ties, the leadership is in_ the _process of adjusting,reorienting and re- trezieliing the Four _Modernizations into something inot.epragmatic, ivalistic and at tainable.:Plie main lines of the modernization program still obtain; but the adjustment may occupy much of thedecade of tlia 1980s: Economic development is still the overriding niperative,but the reliance on costly major projects is being reduced:For ex- ample; the mammoth; modern Baoshan iron arid steelcomplex is being sealed down to a more attainable size and schedule._ Although implementation of economic reforms such asde- centralization of planning and the introduction of incentives-con7 timies; efforts have_been made to retain necessary centralcontrol and economic. stability: Westeti systenis _and _ processes are still important,but the measuring rod for China's modernization is nolonger the acquisi- tion of the most. advanced Western technology;but a judicjous blend of foreign experience and self reliance: _ Trriprovernent in living conditions is still an irrip6P.,Antgoal; the earlier expectation that China could rapidly movebeyond meeting _the subsistence, requirements of its citizens mustbe tempered. Uncertainty about the effectiveness and permanetiee_efthe adjust- . ment persist. Retrenchment may yet become_reversal: Leadership changes may resurface at least some of the old ideologicalpriorities evident (iring_ the- Cultural Revolution and the GreatLeap__Forward. Likewise, the priority of the fourth modernizationthatof the mili- tary.may rise. and threaten the preeminenceof the other three. The norinalization of economic and politicalrelations with Japan, the, United
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