VI. COMPARISON WITH KANG CHAO'S INDEX OF CONSTRUCTION

The index for this paper is tested against an index by Professor Kang Chao of the University of Wisconsin. Kang Chao presents an index of inputs to the construction sector covering 1950-58. He uses official Chinese data on steel, timber, cement, glass plates, other building materials, and labor. This index, converted to 1957-100 from its 1952 base is given in table 6. The two indexes show the same general pattern.

VII. OTHER BUILDING MATERIALS: GLASS AND BRICK

No time series are available on such inputs to construction as plywood, precast concrete, and plastics. Data on production of glass and brick from 1949 through 1960, however, are available. A new index was calculated including all five materials (cement, timber, steel, glass, and brick). This expanded index differs little from the original index (see table 7). This result suggests that the inclusion of glass and bricks in the whole index would not appreciably alter the pattern of construction activity as set forth in this paper. If five items are used, bricks (at 40 yuan per 1,000 bricks) would constitute 17-21 percent of the total value of building materials in the construction sector. Production thus would have amounted to an estimated 45 to 60 billion bricks in 1974-a reasonable figure, considering the production of 30 billion bricks reported for 1960. Glass (at 1.29 yuan per square meter) represents only about 1.5 percent of the total value of building materials in the five-item analysis, so that 1974 production would have been about 130 million square meters of flat glass. In 1960 the production of glass was 66.5 million square meters.

TABLE 6.-CHINA: COMPARISON OF THE PRESENT INDEX AND KANG CHAO'S INDEX

TABLE 7.-CHINA: EFFECTS OF THE INCLUSION OF GLASS AND BRICK ON THE CONSTRUCTION INDEX

1949-57, Rehabilitation and the First Five-Year Plan

During the reconstruction phase, construction activity was directed toward the rebuilding of the war-damaged industrial and transportation base. Rail lines were mended; damaged or idle factories were returned to production; and a small amount of new plant construction was initiated. With the adoption of the First Five-Year Plan (1953-57), industry was given priority over other types of construction. Soviet building specifications were adopted, and Soviet technical assistance was provided. The main results were an increase in basic heavy industry and in the railroad network.

1958-60, The Great Leap Forward

The Chinese felt during the late 1950's that a much faster pace of development could be attained by adding massive inputs of labor to the construction process. Work on the core Soviet-aid plants was supplemented by a fast-paced program of building thousands of small iron furnaces, fertilizer plants, cement plants, and machine shops. Severe material shortages quickly developed, and quality of output plummeted. Industrial and construction problems were exacerbated by the harvest shortfalls. The combination of industrial collapse, severe food shortages, and withdrawal of the Soviet advisers in mid-1960 brought the Leap Forward to an end.

1961–65, Readjustment and Recovery

The period of readjustment and recovery was characterized by a return to orthodox planning, including the shutting down of useless small plants. Construction work was first concentrated on major projects that could be finished quickly. Later, renewed investment was undertaken on a selective basis by the central government-featuring the chemical fertilizer, petroleum, and electronics industries. Vast military and related construction was initiated. China turned to the West as a primary source of modern technology and began to purchase substantial amounts of machinery and whole plants. A central theme of this period was the higher investment priority accorded to the agricultural sector and industries supporting agriculture.

1966-69, The Cultural Revolution

The Cultural Revolution was a period mixed in its purposes and effects. The political turmoil disrupted the urban sector and led to material shortages and to delays in the national construction schedule. Some of the hurry-up philosophies of the Great Leap Forward were reinstated, although on a much more moderate scale. Construction materials and funds were once more wasted on poorly conceived small-scale projects. Local decisions on investment were not coordinated with raw material supply or need for the output. In general, the Cultural Revolution had little effect on agricultural production and only temporarily halted the upward trend of industry and construction.

1970-74, the Current Scene

Once the Cultural Revolution had faded, work moved forward rapidly on major projects in industry, transportation, and other sectors, and the small plant program was pushed on a fairly rational basis. Small cement plants were built in great numbers, reaching 2,800 by 1973, with output equaling the output of the modern cement plants. Small fertilizer plants were also stressed, and their output is claimed to be greater than the modern plants. The construction of small plants had once more outpaced the availability of construction materials and supporting inputs, such as fuels. Another reexamination of priorities among small plants has been in process with the result that the level of small plant construction has been drifting downward over the past 2 years.

Current construction activity in China reflects the revised investment priorities of late 1972 and 1973, under which Peking is attempting to bolster deficiencies in agricultural and industrial performance. Construction activity now features industrial projects supporting agriculture, the buildup of electric power capacity, port and harbor improvements, and capital improvements in the raw materials industry (mining). China in 1973 contracted with Japan, the United States, and Western Europe for $1.2 billion worth of industrial plants-mainly chemical fertilizer and artificial fiber plants. In 1974, plant purchases were about $900 million, dominated by the steel rolling mill (more than $500 million) to be built at Wu-han.

For the next 2 to 5 years, construction activity will feature industries producing chemical products, raw materials, and electric power. This activity will include the construction of the numerous foreign plants now under contract. Construction in the mining industry will give priority to open-cut mining, a technology in which China has much to learn from the West. Construction of major new facilities at international ports will parallel the expansion of foreign trade. The steel industry will continue to have high priority in construction, with the major emphasis on capacity to produce finished steel. The petroleum industry has been speeding up its already fast pace. Development during the next few years will give top billing to oil pipelines and to the opening up of offshore deposits in the shallow Pohai Gulf.

Part III. RURAL AND AGRICULTURAL

DEVELOPMENT

1. China: Estimates and Official Assessments of the Output of Grain and Cotton, 1949-74__

328

2. China: Imports, Production, and Total Availability of Plant Nutrients from Chemical Fertilizer_.

333

343

344

3. China: Imports of Grain, Calendar Years, 1961-75_ 4. China: Trade of Major Agricultural Commodities.

CONCLUSIONS

The major conclusion in my paper on agriculture in the last JEC volume on the People's Republic of China was that:

the increase in grain production through 1975 probably will be sufficient to maintain per capita food supplies but not sufficient to provide large extra quantities of raw materials for industry or export. A run of bad luck in weather or a retreat from the permissive policy toward private activity in the countryside would reduce these gains. Shortcomings in domestic agricultural technology will increasingly constrain the advance in the agricultural sector.1

1 Alva Lewis Erisman: "China: Agricultural Development, 1949-71," People's Republic of China: An Economic Assessment, Joint Economic Committee of the U.S. Congress, Washington, 1972, p. 143.

(324)