I. Introduction A well-defined policy for industrial structuring has yet to emerge in the People's Republic of China (PRC). For years there was emphasis on proportional arrangement in planning, first between agriculture and industry (including sometimes transport and communications and the building industry), then between light and heavy industries, thus setting up a proportional relationship among agriculture, and the light and heavy industries. In those years, service trades, or the so-called tertiary industry, were simply excluded from planning, and the international practice of building a separate statistical system for service trades was largely unknown. Moreover, China's policy for industrial structuring was detached from the international environment due to its seclusion from the outside world.

It was only in recent years, along with the deepening of economic reforms and the introduction of the open policy, that China began to show interest in exploring issues related to industrial structure. In the course of extensive discussion, in spite of competing views and scenarios, a consensus eventually emerged that the comparative rationality of China's current industrial structure should be rectified and that the traditional theory of socialist product economy should be discarded in favour of one advocating socialist commodity economy as the guiding principle in formulating a new industrial policy. Simultaneously, consensus has also been reached as regards the content of industrial policy, its linkage with China's long-term development strategy and current economic restructuring, and the direction of industrial structural adjustment and its relation with the international environment.

In fact, the basic concept of China's industrial structure contained in The Seventh Five-Year Plan for National Economic and Social Development (1986-90) adopted at the Fourth Session of the Sixth National People's Congress represents the result of explorations of recent years. This basic concept was also embodied in General Secretary Zhao Ziyang's report to the Thirteenth National Congress of the Communist Party of China on 25 October 1987, in the section concerning the rationalization of industrial structure and enterprise set-up.