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, no advertising of products of any kind in China. How can one equate, in Western value terms, moreover, the building of dikes, aqueducts, bridges, factories, housing, recreational facilities, and so on, across the spectrum of economic development, all created primarily by human

labor, much of it mobilized on a volunteer basis? Where does the volunteer labor of tens of millions in massive public health programs show in the gross national product?

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

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

But the new China is best measured as the Chinese themselves measure it, on the basis of China's past or against the conditions prevailing in other nations of Asia. I have seen the old China, and I have traveled widely throughout Asia. In my view, China's half-filled bottle is filling rapidly.

I would sum up the status of China's social and economic system in three words: It is working. The contrast with the China of the past that I remembered is nothing short of remarkable. Today the people are well fed, well clothed, and, from all outward signs, satisfied. The farms, or communes, appear to be prolific and well managed; much new land is being brought into cultivation and the ravages of nature are controlled; the streets and sidewalks of the cities are clean, the parks meticulously tended, the shops well stocked with food, clothing and other consumer items; policemen are evident only for controlling traffic; military or other armed personnel are conspicuous by their absence. The housing ranges from adequate to marginal, all at low rents; conspicuously absent are the hundreds of thousands of homeless who were to be seen a few decades ago in the streets and on the waterways of China's cities and can still be seen elsewhere in Asia. There is no visible evidence of begging, drug addiction, alcoholism, or delinquency.

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

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

The wage of the average factory worker in Peking is the equivalent of about $22 a month; that of his wife will be about the same or higher; their children are cared for without charge at a nursery or in public schools; rent takes about 5 percent or less of income; basic food prices are low. For all practical purposes, medical care and recreational facilities are free, and the family probably has a savings account in the factory bank. Nearly everyone rides a bicycle or a bus. Cooking oils, rice, wheat, and cotton cloth-but not synthetics-are still rationed, but the allotments are said to be ample and the system. designed more to assure fair distribution than to cope with shortages.

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. On the communes each family pays about 4 cents per month for treatment by medical personnel attached to the commune. The

ancient practice of acupuncture-it goes back more than 3,000 yearshas been updated and is now used widely as both a treatment for various types of ailments and as a highly effective anesthetic for surgical operations.

The public has been effectively motivated to help stamp out public health problems by the eradication of snails, flies, mosquitoes, and other disease carriers.

As for trade, the Chinese regard their needs from abroad as limited. The emphasis is on the use of inner resources for economic building blocks in order to develop an independent capacity to meet the people's needs. Locomotives, tractors, cars, sewing machines, clotheson across the industrial spectrum-a whole range of products are now made exclusively on that basis. Most of this capacity has been developed largely in isolation during the past decade and a half.

China's foreign trade is governed by two principles: (1) equality and mutual benefit and (2) the exchange of what exists in surplus for what is lacking. With trade, the few gaps left by domestic supplies of raw materials are filled and the sophisticated machinery and capital goods that are not yet built within China are obtained.

In addition to this frugal standard for external needs, China has a conservative policy of trade finance. Foreign trade is kept in rough balance and there is no external debt-internal either, for that matter. Much of China's best quality consumer goods-bicycles, radios, textiles, and so on-are produced for export. Rice is sold abroad to help pay for imports, including wheat.

China's foreign trade is quite small relative to population. In 1971, it is estimated that exports were $2.3 billion and imports $2.2 billion. However, the growth of the twice-a-year Canton Trade Fair since its beginning in 1957, illustrates the increase in China's interest in the world market. The goods for sale at the first fair were exhibited in a building of 12,000 square feet with 1,200 visitors attending. The fair now occupies three buildings totaling 50,000 square feet and more than 30,000 different items for sale are displayed or represented. Twenty thousand people attended last fall's fair and for the first 10 days of the last fair, which ended on May 15, attendance was 10,000. There was vast variety at the fair, especially of consumer goods such as clothing, foodstuffs, textiles, clocks, radios, musical instruments, and, of course, traditional Chinese arts and crafts. Goods are priced to be competitive on the world market. A well-made bicycle which would cost the equivalent of $70 retail inside China sold for about $28 wholesale for export.

There were also several types of trucks, tractors, and many items of farm equipment and machinery for sale, illustrating how China sometimes puts foreign trade above internal requirements. All in all, the fair was a remarkable display of China's diversified and expanding productive capacity.

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

Solid trade relations, however, cannot be based on fads-the sale of chopsticks, Mao buttons, or rice wine. It is not clear at this point what we have that the Chinese want that they cannot obtain cheaper elsewhere, or what Americans will want and need from China over an