114 Deepak Nayyar
19 per cent and 17.2 per cent of total imports respectively; cf. Almanac of China's Foreign Economic Relations and Trade 1986, p. 958. Table 9 outlines the share of food, beverages, tobacco and animal and vegetable oils in total imports. The difference between the former (all consumer goods) and the latter (food and necessities) provides us with a reasonable estimate of the share of manufactured consumer goods in total imports.
28. For some discussion on China's balance of payments in the late 1970s and the early 1980s, see World Bank, China : Socialist Economic Development, Vol. II, pp. 451-63;
Sheahan, pp. 52-54; and World Bank (1986), pp. 107-109.
29. It is reported that the balance of trade deficit was 12 billion dollars in 1986; see "Communique on the Statistics of 1986: Economic and Social Development', issued by State Statistical Bureau, March 1987.
30. Cf. World Bank, China : Socialist Economic Development. Vol. H, pp. 461-63.
31. The general index of prices of farm and sideline products rose by 53.7 per cent during 1978-1984 as compared with 48.7 per cent during 1957-1978. For evidence on the movement in price indexes, see Statistical Yearbook of China 1985, p. 530.
32. See R.Portes, 'Internal and External Balance in a Centrally Planned ]iconomy\Joumal of Comparative Economics, December 1979, pp. 325-45, for an interesting macro-economic model on the relationship between internal and external balance in a centrally planned economy. It identified government expenditure, exports and real wages as the policy instruments for the realisation of planners' objectives.
33. The total expenditure of the government, in terms of current prices, was 127.4 billion yuansin 1979,121.3 billion yuans in 1980,111.5 billion yuans in 1981,115.3 billion yuans in 1982 and 129.3 billion yuans in 1983. It rose sharply to a level of 151.5 billion yuans in
1984 and 182.6 billion yuans in 1985. Cf. Statistical Yearbook of China 1985, p. 523 (for the
1985 figure, IMF, International Financial Statistics, April 1987).
34. This sequence of adjustment is highlighted by BL. Reynolds, 'Economic Reforms and External Imbalance in China 1978-8 V.American Economic Review, Papers and Proceedings, May 1983, pp. 325-28, in a paper based on the Portes model, that examines the impact of economic reforms on external balance in China during the period 1978-1981. For a discussion of macro-economic changes since the reform, see KC. Yeh, 'Macro-economic Changes in the Chinese Economy during Readjustment', The China Quarterly, December 1984, pp. 691-716.
35. According to the communique on the Statistics of 1986: Economic and Social Development' issued by the State Statistical Bureau in March 1987, the national income in 1986 was 779 billion yuans; the trade deficit was reported as 12 billion dollars in the same source .At an exchange rate of 3.45 yuan per dollar (average for the year 1986 reported in IMF, International Financial Statistics), the balance of trade deficit was the equivalent of 5.3 per cent of national income.
36. This argument is developed by Sheahan to suggest that China can readily relax constraints on imports in order to raise consumption and investment; he also stresses that it would be worse than pointless for a low-income country to run an export surplus (pp. 60-61). While the latter view is perfectly reasonable the wisdom of the former proposition is open to question unless there is a corresponding, not necessarily matching, export expansion.