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. 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) Since that paper was written in late 1971, the weather has been generally unfavorable and marginal returns from inputs produced in small plants have declined. As a result, Peking has found it difficult to increase the output of grain and essential nongrain crops as rapidly as population. Crops were poor in 1972. To maintain consumption the Chinese temporarily: Stepped up imports of grain and cotton; Broadened imports to include corn, soybeans, and soybean oil; and Turned to new (United States) and former (Australia, Argentina, and France) suppliers. At the same time, Peking has assured itself of grain for the medium term and has made the sizable adjustments in investment priorities necessary for a longer term solution to the agricultural problem. Major changes include: Concluding multiyear agreements with Canada, Australia, and Argentina to provide a maximum of 4.8 million tons of grain annually through 1976; Downgrading the concept of the small plant churning out low quality inputs; Importing 13 large chemical fertilizer plants to provide firstclass inputs and synthetic fiber plants to supplement supplies of natural fibers; Intensifying work on capital construction projects to improve and extend farmland; Limiting sideline activities that might interfere with peasant obligations to the collective; and Increasing the acreage of grain crops by expanding multiple cropping and limiting the acreage of industrial crops. The fertilizer plants are the key to China's agricultural development. When the last of these plants come into operation in 1978 or 1979, China's supply of nitrogen fertilizer will reach 8 million tons, double the current availability. The giant increment in nitrogen fertilizer clearly will be a major shot in the arm for agriculture although marginal returns will probably be low, at least initially, because fertilizer will outstrip the availability of complementary inputs-effective water control; very-high-yielding varieties of seed; sufficient trace elements; phosphoric and potassium fertilizers; of agricultural chemicals, et cetera-necessary for top yields. Even so, grain output could increase to about 300 million tons by 1980. Peking's use of its limited scientific capabilities to achieve practical short-term objectives (such as simple seed selection and crossing) rather than to do basic, in-depth research (such as sophisticated varietal development) may prove to be the most serious impediment to China's progress in modernizing agriculture. |