years ago, and he has consistently maintained a deep interest in our relations with this most important nation.

Senator Mansfield, I can't tell you how delighted we are to welcome you today. We have a number of questions for you, but I understand you have a statement of your own.

Senator Scott, I understand, will be here a little bit later.

We have adopted a committee policy, which I am sure you are familiar with, of limiting initial oral statements to 10 minutes in order to provide as much time for colloquy as possible, and I am sure that, knowing your emphasis on egalitarianism in the Senate, you would want to be treated just exactly like any other witness or any other Senator, so we will run our timer and let you know when the 10 minutes are up.

You go right ahead.

STATEMENT OF HON. MIKE MANSFIELD, A U.S. SENATOR FROM THE STATE OF MONTANA, ACCOMPANIED BY NORVILL JONES, PROFESSIONAL STAFF, COMMITTEE ON FOREIGN RELATIONS

Senator MANSFIELD. Mr. Chairman, I hope that the distinguished chairman of this committee will recognize that there are some exceptions to some rules and that, if possible, I would like to go a little more than 10 minutes, which is something I usually don't ask, because I have spent some time on this speech, but I will take my chances.

Chairman PROXMIRE. Without objection, that will certainly be done. When the buzzer goes off, you go right ahead; we will just let you know, and we can assume you are answering a question. [Laughter.]

Senator MANSFIELD. Mr. Chairman, I appreciate being invited to participate in these hearings on the Chinese economy. Your committee is to be commended for its work on this timely subject. These hearings can make a significant contribution to public knowledge about developments in China's economy and social system.

I do not profess to be either an economist or an expert on China. What I will say is based on recent personal observations over a period of 16 days in six different Chinese cities and the surrounding countryside, many conversations, and an interest in Asian affairs dating from my service as a Pfc. in the Marines in China in the 1920's.

As a preface to my observations, I want to urge that the committee take with a grain of salt any so-called estimates it may receive about China's gross national product. On the basis of my observations, I would say that our concept of GNP has little, if any, practical application to China. Any general use of GNP as a gage of the state of China's economy could add to the already seriously distorted view we have of that country.

There is no effective way to measure the gross national product and little meaning in the measurement in a country with a socialized economy that is based largely on human labor. While production is stressed in China, the society does not encourage consumption of goods and services as a stimulant to production. There is, for example,

uch of it mobilized on a volunteer basis? Where does the volbor of tens of millions in massive public health programs he gross national product?

itor of 16 days can expect to fathom the mysteries of that complicated land. No man who has spent his life in that could expect to achieve that goal.

tsider who looks at China sees a distorted picture which, at be tempered by perspective. An observer, for example, can ottle, which is China, as half full or as half empty. If China's and its system are judged against living standards in this by the number of cars, television sets, telephones, or plumbes-the bottle will be half empty, if that.

e new China is best measured as the Chinese themselves t, on the basis of China's past or against the conditions preother nations of Asia. I have seen the old China, and I have videly throughout Asia. In my view, China's half-filled bottle apidly.

sum up the status of China's social and economic system words: It is working. The contrast with the China of the past nembered is nothing short of remarkable. Today the people ed, well clothed, and, from all outward signs, satisfied. The communes, appear to be prolific and well managed; much is being brought into cultivation and the ravages of nature olled; the streets and sidewalks of the cities are clean, the iculously tended, the shops well stocked with food, clothing consumer items; policemen are evident only for controlling ilitary or other armed personnel are conspicuous by their The housing ranges from adequate to marginal, all at low spicuously absent are the hundreds of thousands of homewere to be seen a few decades ago in the streets and on the s of China's cities and can still be seen elsewhere in Asia. no visible evidence of begging, drug addiction, alcoholism, iency.

ople appear to be well motivated and give the impression of themselves vigorously in whatever tasks they are pursuing. nd men work side by side in the field and the factories. The between the factory worker and the peasant is closing, and ard of living of both is rising.

crops have been good for the last several years, I think, for he last decade, due not only to favorable weather but also ve efforts, the increased use of fertilizer-both human and -the spread of scientific methods, more irrigation, and the of new lands into production. China is now a net exporter ffs.

ge of the average factory worker in Peking is the equivalent $22 a month; that of his wife will be about the same or eir children are cared for without charge at a nursery or in

In fact, China exports large quantities of all of these items except wheat.

Industrial progress has carried the Chinese economy a great distance since a quarter of a century ago when even bicycles and radios. had to be imported. In Shanghai, we saw impressive examples of modern heavy industry. Before 1949, Shanghai's smelters produced only two kinds of ordinary carbon steel; now they turn out more than 1,000 types. The range of production is from everyday household articles to nuclear devices and space rockets.

Factories and communes are generally more than production centers; they are also self-contained social units. At a cotton textile mill which we visited in Sian, in northwest China, for the 6,380 workers there were dormitories for the unmarried, apartments for families, dining halls, barber shops, libraries, clubs, outdoor sports facilities, swimming pools, primary and middle schools, and medical clinics.

The organization of the 80 percent of China's population living outside the cities is illustrated by the Ma Lu commune, to the south of Shanghai. This commune, as is the case with others, is more than a farm. It is a key unit in China's new social organization. Ma Lu is a self-contained community of over 6,500 families-more than 25,000 people, all having a direct or indirect interest in the commune's output, since both their personal income and China's overall progress depend on their efforts.

Last year, income was about $336 per household. At the commune there were 33 primary and secondary schools, a hospital, a clinic for each of the 14 production brigades, and a health worker for every

team.

Extensive power equipment and machine cultivation is in use on Ma Lu commune. Much of what is produced is processed on site and there is also manufacturing both for in-house need and for external distribution. Among the manufactures are gasoline engines for farm machinery, farm tools, spare parts for tractors, insecticides, and some consumer products. These farm factories account for 50 percent of the value of the commune's total output.

The restoration of nature's past ravages and the conservation of natural resources have been given great emphasis by the Chinese Government. As contrasted with the former parched look of the landscape, the sight of miles upon miles of trees around Peking is very impressive. The plantings are said to have altered the local weather for the better. Furthermore, trees are good for absorption of pollution. Throughout China arable land is being created out of wasteland and massive water-control projects are being built to control destructive floods and droughts. Human waste is recycled, a system which helps to explain why the Chinese, with a population four times ours, have unpolluted rivers and streams and an enormous output of fresh water fish. This system of recycling also returns to the soil as organic fertilizer most of what has been taken from it in the growing cycle, thus serving to maintain a natural fertility.

A word should also be said about Chinese medical care. Only a few years ago little, if any, health care was available to the vast majority of the people. Now medical care is free for all workers in the cities.

tice of acupuncture-it goes back more than 3,000 yearspdated and is now used widely as both a treatment for es of ailments and as a highly effective anesthetic for rations.

ic has been effectively motivated to help stamp out public lems by the eradication of snails, flies, mosquitoes, and -e carriers.

de, the Chinese regard their needs from abroad as limited. sis is on the use of inner resources for economic building order to develop an independent capacity to meet the ds. Locomotives, tractors, cars, sewing machines, clotheshe industrial spectrum-a whole range of products are exclusively on that basis. Most of this capacity has been argely in isolation during the past decade and a half. oreign trade is governed by two principles: (1) equality benefit and (2) the exchange of what exists in surplus acking. With trade, the few gaps left by domestic supplies terials are filled and the sophisticated machinery and Is that are not yet built within China are obtained. on to this frugal standard for external needs, China has a e policy of trade finance. Foreign trade is kept in rough there is no external debt-internal either, for that matter. China's best quality consumer goods-bicycles, radios, so on-are produced for export. Rice is sold abroad to imports, including wheat.

oreign trade is quite small relative to population. In 1971, ed that exports were $2.3 billion and imports $2.2 billion. he growth of the twice-a-year Canton Trade Fair since its n 1957, illustrates the increase in China's interest in the et. The goods for sale at the first fair were exhibited in a 12,000 square feet with 1,200 visitors attending. The fair es three buildings totaling 50,000 square feet and more different items for sale are displayed or represented. usand people attended last fall's fair and for the first 10 last fair, which ended on May 15, attendance was 10,000. s vast variety at the fair, especially of consumer goods thing, foodstuffs, textiles, clocks, radios, musical instruof course, traditional Chinese arts and crafts. Goods to be competitive on the world market. A well-made ch would cost the equivalent of $70 retail inside China ut $28 wholesale for export.

re also several types of trucks, tractors, and many items ipment and machinery for sale, illustrating how China outs foreign trade above internal requirements. All in all, a remarkable display of China's diversified and expanding capacity.

ed States purchased only a few million dollars' worth goods last year, mostly through Hong Kong; but Chinese ar to be an "in" thing today and substantial increases in Chinese consumer goods are likely this year.

extended period. Nevertheless, it seems to me that the administration would be well advised to pursue trade prospects vigorously, not only because there may be profits to be made from it but also because good mutual trade relations can be an important factor in breeching in peace the great wall of separation which has stood between the two nations for almost a quarter of a century. Good trade relations tend to equal good foreign relations.

From my observations, it seems to me that China's society is strong, dynamic, and unified perhaps as never before in modern history. "Serve the People" is Chairman Mao's mandate and there seems to be a great dedication among the Chinese in pursuing it. The Chinese are extending the traditional concept of reliance on the family unit as basic to the social structure to the commune or factory and to the nation as a whole. China is becoming a national family, based on a "one for all and all for one" concept of social and economic development.

What the people of China have achieved in the last two decades is, I believe, truly remarkable. Like it or not, the system of the People's Republic seems to be working very well for them and they for it.

We are a young Nation relative to China-200 years compared with thousands of years. China's known history goes back almost 6,000 years; it has one of the oldest civilizations on earth. There is much we can learn from this ancient and rich culture and there is much China can learn from us.

The mutual educative process has begun again. This time it is not one-sided, teacher-pupil, or missionary-heathen, as in the past. This time it is on the basis of equality and it had best be kept that way for there is no other way which is likely to be acceptable to the Chinese or to our own people. As Premier Chou En-lai said when our conversations were coming to a close, it took "100 years since the Opium Wars for the Chinese people to stand up." Indeed, they are standing up and they have every right to look with satisfaction on what they have created with their own energy and resources in two decades. For one who remembers the old China, the change which has been wrought is nothing less than extraordinary.

Chairman PROXMIRE. Thank you very much, Senator Mansfield, for a most remarkable statement, and I think the way you ended is the key to why it is so valuable.

You were one who has visited China before, many, many years ago, and you have had a chance to observe firsthand, not as a matter of theory or statistical abstraction of some kind, but firsthand the remarkable changes.

You caution us, and this committee should be cautioned, I am sure, on just a blind acceptance of gross national product. You say that just cannot measure the kind of economy that China has, the different kind of economy than ours?

Senator MANSFIELD. That is correct. The indexes are not there to make a similar summary of what its GNP is, in terms of what we have in this country.

Chairman PROXMIRE. We have another scholar coming upMr. Ta-Chung Liu-who takes quite a different view than you do.