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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 years, has 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 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. He—without referring to your trip and Senator Scott's trip-does say that a brief trip to China, a nation of 850 million people, can't possibly give a clear understanding of the problem there.

Senator MANSFIELD. Well, Mr. Chairman, may I say that he is right. I agree with him. My experience in China goes back to a little over a year with the marines in the Tientsin-Peking area in 1921, 1922, a trip for President Roosevelt on a special mission at the end of 1944 and the beginning of 1945, and a 2-week trip to North_ChinaTsingtao, Tientsin, and Peking-in 1946, so I certainly, as I tried to say in the beginning, do not look upon myself as an expert. But I do look upon myself as a student who has a very keen interest in this part of the world and, therefore, I would without question agree with the statement just made.

Chairman PROXMIRE. Well, Mr. Liu, who is an eminent economist, has based his analysis on a very careful study of statistics. He argues since 1957 quite the contrary to the thrust of what you say there has been an actual decline in the diet, the caloric consumption per capita. He says there is no way to interpret it except to interpret it that it has gone down, gone down rather drastically, gone down by 10 percent, 5 to 10 percent.

He also says the cotton fiber available for clothing just has to decline just due to the increase in the population of China and a relatively modest increase in the textile production; and when you look for exports and so forth. He says on this basis since 1957 both the diet and clothing in China have not improved; it has gone the other way.

Senator MANSFIELD. I am in no position to make a comparison with 1957 because I haven't looked into that particular aspect of the situation nor have I studied the statistics.

I would point out, though, that we were allowed free rein in China. We asked to visit certain areas. We were not able to get to Kunming in Yunnan, which I would have like to have returned to, and I assume that the reason that we were not allowed was because that happens to be the railhead for the French-built railroad which goes down to Hanoi. But we did visit Peking, Shanghai, Hangchou, Sian, Changsha, and Canton. We went out in the streets and asked questions which, of course, we had to have an interpreter along to be able to do. We were allowed in areas where foreigners had been forbidden until our trip and we have to make the observations or at least I have to make the observations I do, not only on the basis of the visits to those six major cities but also to numerous villages and communes and factories.

We put in long days and we tried to learn a lot on the basis of personal perspective, because Senator Scott had also been to the mainland some years previously. But I cannot make a comparison with 1957.

All I can say is that from what I saw the Chinese appeared to be well enough fed, getting by on a subsistence plus level.

What the situation was in 1957 I don't know, but the Chinese have had good crops for the past decade; they have been able to grow a great deal more because the yearly floods of the Yellow River, for example, which used to be a regular occurrence in China, and would flood out hundreds of thousands of acres, have now been controlled through irrigation systems, dikes and reservoirs built behind power projects.

I don't think that one can go too much on statistics because I don't think the People's Republic Government in Peking is itself yet too sure of its statistics. For example, if you ask about the population, they will say it is between 750 million and 850 million, and the figure

of the U.S. Census Bureau indicates that the population of China is about 845 million, perhaps a little more.

So I would not disagree with Mr. Liu. He has had access to information which I have not seen. He knows much more about Chinese economics than I do. So all I can do is to reiterate my own personal viewpoints and let it stand or fall on the basis of what is, subsequently, proved or disproved.

Chairman PROXMIRE. This morning you told us that China, you feel, is a strong, dynamic, unified country. Many of us have been concerned about have been less concerned about the threat of China because we understood it to be relatively weak economically, that its gross national product was one-eighth of ours, that it is somewhat smaller than Italy's.

You, in your report to the Senate, indicated that China is not an aggressive nation.

Senator MANSFIELD. That is correct.

Chairman PROXMIRE. In that connection, do you think that the Chinese have (1) the ability and (2) the disposition to attack and overtake Taiwan, for example?

Senator MANSFIELD. First, let me say that I read the report issued by this committee on the economy and other problems of the People's Republic of China, and I found it quite interesting.

Secondly, may I say also that in response to your question concerning the People's Republic's aggressive intent, the question has been raised, well, what about Tibet? Tibet has been considered a part of China. India so recognized it. This Nation made no effort in opposition. Chiang Kai-shek on Taiwan also recognized it. In 1962 I happened to be in India when the Chinese invaded that country; they could have, in another day or so gone to the Bay of Bengal and split the Indian subcontinent in two, but instead they retired from Assam to their side of the border after making a rectification of the so-called McMahon Line, which China had never recognized.

The Government of Taiwan, Chiang Kai-shek, recognized that as a legitimate Chinese claim.

Then, of course, there was the penetration of the so-called Chinese volunteers into Korea during the Korean war, but that did not occur until American United Nations troops, rather, reached the Yalu River and there the danger became increasingly significant insofar as the Chinese viewed it. But years ago they withdrew all troops from North Korea whereas the United Nations still has a force in Korea made

up primarily of U.S. troops supporting the South Korean Army.

They will be—they are interested though in contacts with so-called third world countries, and they have gone into places like Africa; they have spent $600 or $700 million, I believe, for this purpose. They have also spent tens of millions of dollars building a railroad from Zambia up into the area of Tanzania, so that there could be a shift away from the export of copper from Portuguese-controlled ports up to purely African ports.

They have offered Ethiopia some aid. They are interested in roadbuilding in Somalia. They have extended aid or offered it in certain forms to Guinea, to Chad. For many years they have had an economic mission in the Yemen. I think they have helped to better the harbor at Hodeida; they have engaged in some roadbuilding there, but it seems that they do not say stay, that once they complete a project-I

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