Chinese History and Statistics -- Page 17
The Sixth and Seventh Five-Year long-term strategic goal
During the 1980s the government also pursued a series of reform policies to increase productivity in agriculture and industry through decentralization and to open the door to foreign investment. The reform policies, while increasing industrial and agricultural output substantially, also contributed to inflation, corruption, speculation, and income disparities. Beginning in October 1988 new policies were initiated to re-impose government control and slow down growth to achieve economic stability.
Manufacturing (Part 1)
China nationalized all capital-goods industries after the Communist accession in 1949 and pursued a policy of rapid, state-directed industrialization with special emphasis on the development of steel and defense-related industries. Since the initiation of economic reforms in 1978, efforts have been made to correct the structural imbalance this policy produced. New investment has been concentrated in the textile and consumer durable goods industries. From 1985 to 1988 the output of durable consumer goods showed phenomenal growth, making China one of the world's foremost producers of these products. Industry grew much more vigorously in rural than in urban areas during the 1980s. The share of village industry in the total industrial output value rose from 7.2% in 1976 to as much as 25% by 1989. The astounding growth of rural industry has, however, acted as a disincentive to agriculture. In the coastal areas, four special economic zones offering tax and trade benefits to foreign companies were established. In addition, 14 coastal cities and Hainan Island were opened to foreign investment in 1984.