The External Sector 113 14. See World Bank, China : Socialist Economic Devlopment, Vol I, The Economy, Statistical System and Basic Data, Washington DC, 1983, p. 243. It also discusses the basic methods and sources used to compile foreign trade statistics in China. 15. The domestic currency value of national income, at current prices, increased by 2.8 per cent in 1972,8.5 per cent in 1973 and 1.3 per cent in 1974 (calculated from Statistical Year-book of China 1985, p. 33). At the same time, the dollar value of exports increased by 30.6 per cent, 69 per cent and 19.4 per cent respectively, while the dollar value of imports increased by 29.6 per cent, 80.4 per cent and 47.4 per cent respectively (calculated from Almanac of China's Foreign Economic Relations and Trade 1986. p. 945). 16. Cf. Eckstein, p. 252. 17. For evidence on these differences in the composition of Chinese exports as between desinations, see World Bank, China : Socialist Economic Development, Vol. II, pp. 455-59. See also, S. Ishikawa, 'Sino-Japanese Economic Cooperation', China Quarterly, March 1987, pp. 1-21, for evidence on, and discussion of the pattern of Sine-Japanese trade. 18 In difficult years, textile exports were maintained by cutting domestic rations to the minimum; cf. World Bank, China : Socialist Economic Development, Vol. II, p. 423. Even now, quite apart from textiles and clothing, a large proportion of China's exports, whether food or manufactured consumer goods, compete with domestic consumption. 19. In a recent study, citing Chinese cources, Kueh and Howe state that: At present, China's exports of light industrial products are dated in design, often questionable in quality, and usually in need oflongish delivery times. Consequently, the unit prices obained on world markets for clothing, shoes, porcelain and other goods are only a small fraction of those obtained by more efficient producers.' (p. 848). 20. A study based on data from the Guangdong province showed that, in 1979, at the official exchange rate of 1.56 yuan per dollar, only 22.8 per cent of the items exported were sold without incurring losses, and a number of manufactured goods would have required an exchange rate 7 to 10 times the official rate to cover costs : see Kueh and Howe, p. 845. The World Bank study states that, in 1980, except for exports of primary commodities, China could scarcely obtain 1 dollar by exporting domestic goods worth 1.5 yuan. Even for textiles and garments the domestic procurement costs were higher. For other light manufactured goods, machinery items or electronic components, the domestic costs were in the range 2.5-6-Oyuan per dollar : see China : Socialist Economic Development, Vol. II, p.449. 21. The description that follows draws upon the detailed discussion in World Bank, China : Socialist Economic Development. Vol. //, pp. 433-42. 22. The internal settlement rate was 1 dollar == 2.80 yuans, whereas the official exchange rates in the years 1981 to 1984 were 1.70,1.89,1.98 and 2.32 yuan per dollar respectively: cf. International Financial Statistics, April 1987. 23. World Bank, China : Socialist Economic Development. Vol. //, pp. 433-42. 24. The hypothesis outlined in this paragraph, in a skeleton manner, emerged from my discussions with economists at the Chinese Academy of Social Sciences and officials at the Ministry of Foreign Economic Relations and Trade as also at the People s Bank of China, in Beijing. A similar explanation is developed by Sheahan, pp. 55-59. 25. The figure is based on Ministry of Foreign Trade data, for imports classified by end-use, reported in the Almanac of China's Foreign Economic Relations and Trade 1986, p. 958. 26. The developments during the 1950s and the 1960s outlined here are described and discussed in Eckstein, pp. 245-49 and pp. 273-76; see also World Bank, China : Socialist Economic Development Vol. II, pp. 418-20. 27. The end-use classification of imports shows that, during the period 1981-85, means of subsistence, that is consumer goods, constituted 27.2 per cent. 29.2 per cent, 21.3 per cent.