chancery: 2300 Connecticut Avenue NW, Washington, DC 20008

Diplomatic representation from the US: chief of mission: Ambassador
Clark T. RANDT, Jr. embassy: Xiu Shui Bei Jie 3, 100600 Beijing
mailing address: PSC 461, Box 50, FPO AP 96521-0002 telephone: [86]
(10) 6532-3431 FAX: [86] (10) 6532-6422 consulate(s) general: Chengdu,
Guangzhou, Shanghai, Shenyang

Flag description: red with a large yellow five-pointed star and four
smaller yellow five-pointed stars (arranged in a vertical arc toward
the middle of the flag) in the upper hoist-side corner

Economy China

Economy - overview: In late 1978 the Chinese leadership began moving the
economy from a sluggish Soviet-style centrally planned economy to a more
market-oriented system. Whereas the system operates within a political
framework of strict Communist control, the economic influence of non-state
organizations and individual citizens has been steadily increasing.
The authorities have switched to a system of household and village
responsibility in agriculture in place of the old collectivization,
increased the authority of local officials and plant managers in industry,
permitted a wide variety of small-scale enterprise in services and
light manufacturing, and opened the economy to increased foreign trade
and investment. The result has been a quadrupling of GDP since 1978. In
2001, with its 1.27 billion people but a GDP of just $4,300 per capita,
China stood as the second largest economy in the world after the US
(measured on a purchasing power parity basis). Agriculture and industry
have posted major gains, especially in coastal areas near Hong Kong
and opposite Taiwan, where foreign investment has helped spur output of
both domestic and export goods. On the darker side, the leadership has
often experienced in its hybrid system the worst results of socialism
(bureaucracy and lassitude) and of capitalism (windfall gains and
growing income disparities). Beijing thus has periodically backtracked,
retightening central controls at intervals. The government has struggled
to (a) collect revenues due from provinces, businesses, and individuals;
(b) reduce corruption and other economic crimes; and (c) keep afloat
the large state-owned enterprises many of which had been shielded from
competition by subsidies and had been losing the ability to pay full
wages and pensions. From 80 to 120 million surplus rural workers are
adrift between the villages and the cities, many