¹ A pioneering paper in this field is Ishikawa, Shigeru, “The impact of the emergence of China on Asia-Pacific trade,” paper presented to the Fifth Pacific Trade and Development Conference, Tokyo, 1975.Google Scholar Important recent work in this field includes. Miyohei, Shinohara and Fu-Chen, Lo (eds.), Global Adjustment and the future of the Asian Pacific Economy (Tokyo: Institute of Developing Economies. 1989)Google Scholar; Colin, I. Bradford Jr and William, H. Branson (eds.), Trade and Structural Charrge in Pacific Asia (Chicago: The University of Chicago Press, 1987)Google Scholar: Drysdale, Peter, International Economic Pluralism, Economic Policy in East Asia and the Pacific (Sydney: Allen and Unwin, 1988).Google Scholar

² Drysdale, Peter and Garnaut, Ross, A Pacific Free Trade Area? Pacific Economic Papers No. 1 (Canberra: Australia-Japan Research Centre, 1989), pp. 5–7.Google Scholar

³ Economic Planning Agency, Ajia laiheiyo chuki hand no tetsugaku, p. 96.

⁴ Ibid. p. 112.

⁵ Research on British overseas investment in the 1960s revealed the total inadequacy of official data. Bankers in Asia confirm one's suspicions about contemporary Asian data. See e.g. F.F. Chien (Council for Economic Planning and Development, Republic of China), in his speech, “The prospects of economic development of the Republic of China Taiwan and her future relationship with Hong Kong and the Chinese mainland,” Economic Megatrends, 1 May 1990, p. 11.

⁶ Sakurai, Makoto, “Japanese direct investment in East Asia,” paper presented to FAIR-RIIA Conference, London, 1988.Google Scholar

⁷ The most comprehensive source of data on this subject (including data on overseas production rates by industry), is MITI, Kaigaijigyn katsudo kihon chosa (Basic Survey of Our Country's External Business Activities) (Tokyo, various years). The data quoted here are from, Economic Planning Agency, Keizai hakusho (Economic White Paper) (Tokyo: Ministry of Finance. 1989). p. 577.

⁸ Data quoted in FAIR, Interim Report (Group 3), Table 4b.

⁹ A recent account of the deepening intricacy of intra Asian investment and production is in MITI, Tsusho hakusho (Foreign Trade White Paper) (Tokyo: Ministry of Finance, 1988), pp. 210–238Google Scholar. The technology dimension of this is discussed further in MITI, Sangyo gijitsu no doko to kadai (Trends and Issues in Industrial Technology) (Tokyo, 1988), pp. 146ff.Google Scholar

¹⁰ Data from MITI, 1988 Keizai kyoroku no gcnjo to mondaiten. pp. 80–87.

¹¹ Valuable materials on the early history of Sino-Japanese trade are included in the series, Chugoku nenkan, (China Yearbook). Particularly useful surveys are, “Fifteen years progress in Sino-Japanese trade,” 1964 Shin Chugoku nenkan (1964 New China Yearbook) (Tokyo, 1964), pp. 83–111 (covering 1949–64); Matsumura, Seizo, “Japan-China trade in retrospect – the fifteenth anniversary of normalizing relations,” JETRO China Newsletter, No. 72 (1988), pp. 19–23Google Scholar, and the Chronology in ibid. No. 18 (1978), pp. 2–5.

¹² “Japan-China trade eyes large expansion; intergovernmental pact seen by year end,” The Japan Economic Review, 15 March 1973, and “China's Fair and Japan's hopes on it,” The Japan Economic Review, 15 May 1973. During the summer of 19721 lectured to several groups of businessmen in Tokyo and was struck by the strength of their sense of obligation to China based on the feeling that Japan had destroyed much of China's capital stock. There was little apparent realization of the positive aspects of Japan's contribution to Chinese economic development, discussed in Christopher Howe, “Japan's economic experience in China before the establishment of the People's Republic of China: a retrospective balance sheet,” in Dore, R. and Sinha, R. (eds.), Japan and World Depression (London: Macmillan, 1987), pp. 155–176.CrossRefGoogle Scholar

¹³ Details of the Agreement and the negotiations leading up to it are in JETRO China Newsletter, No. 16 (1978); ibid. No. 18 (June 1978), passim, and The Japan Economic Journal, 21 February 1978.

¹⁴ Subsequent Chinese analysis has admitted the rashness of China's import commitments in 1978. However, Japanese and western businessmen were equally unwise in their pursuit of contracts. In the British case many companies new to the China trade were encouraged to participate in it on the basis of inadequate analysis of the current Chinese economic plans and poor advice from official sources. For a Chinese retrospective view see He , Jianzhang, Zhongguo jihua guanli wenti (China's Economic Management Problems) (Beijing: China Railways Publishing House, 1984), pp. 661–62.Google Scholar

¹⁵ In the mid 1970s the Japanese adopted American estimates that suggested that oil output would continue on its 20% growth path, leading to total output of 300–400 mmt. in the mid 1980s, with a large share of this available for exports. Although probably unknown to analysts in Japan and the United States at the time, this estimate was in line with a Chinese projection of 150 mmt. for 1980, which was included in the 1975–80 Plan. By 1980 Dr Tatsu Kambara, by careful analysis of the potential for individual fields, was predicting output of 127 mmt. for 1985 and the possibility of China becoming an oil importer, see “Outlook on China's foreign trade and oil exports,” JETRO China Newsletter, No. 7 (April 1975), and Kambara, T., “An estimate of Chinese oil potential,” OAPEC Bulletin, August-September 1980, pp. 19–31.Google Scholar

¹⁶ There is a large literature on Baoshan. A useful summary is “Peking pays up,” China Trade Report, November 1981, p. 3. An important technical source for the Japanese view of progress at this time is Shanhai hoyama (Baoshan) seitekkojo purojecto repoto (Project Report on the Baoshan Steelworks) (Tokyo, 1981).

¹⁷ See the survey “Sino-Japanese dependence will survive trade tensions,” Far Eastern Economic Review, 24 April 1986, pp. 73–80. Anti-Japanese student protests at this time were largely a cover for pro-democracy movements - taking a cover that the authorities found difficult to criticize and used for their own purposes.

¹⁸ In the mid 1980s China became the largest market for Japanese televisions and this success led to a 50% rise in the share price of Nippon Electric Glass (a major tube maker) in 1984. In 1988 another upsurge of Chinese imports took China back to the number one position for colour televisions. JETRO China Newsletter No. 79. 1989 p. 11 and Asian Wall Street Journal, 29 January 1985.

¹⁹ Significant economic points are included in Bingwei, Tao, “US ‘fight for supremacy’ in Asia-Pacific Region,” Shijiezhishi (WorldKnowledge), 1984 No. 2, p. 6Google Scholar, and Dong Xiang, “US-Soviet military confrontation in North-east Asia,” Liaowang (Outlook) No. 15, pp. 6–7, and Yuzhou, Yuan, “The fluctuating stability of the situation in the Asia-Pacific Area,” Shijie zhishi, No. 9 (1984), pp. 2–5.Google Scholar

²⁰ Delfs, Robert, “iAsean is the key to Pacific progress China believes,” Far Eastern Economic Review, 14 July 1983, p. 62Google Scholar; Siowyue, Chia and Bifan, Cheng, ASEAN-China Economic relations, trends and patterns (Singapore: Institute of South East Asian Studies, 1987)Google Scholar, esp. “An overview,” by John Wong.

²¹ Aiqun, Yang, “Trends in international technology trade and the policy our country ought to adopt,” Tsaimaojingji (Finance and Trade), No. 2 (1990), pp. 21–24Google Scholar; Shuguang, Xi, “The difficulties and concept of an Asia-Pacific economic co-operation region,” Renmin ribao (People's Daily), 6 December 1989.Google Scholar A number of useful statements of Chinese views are in, Ya-tai jingji hezuo yu Zhongri guanxi (Asia-Pacific Economic Co-operation and Sino-Japanese Relations). Documents from the joint conference between the Shanghai International Relations Research Institute and the National Institute for Research Advancement, Tokyo (Shanghai, 1989).

²² Between 1983 and 1988 re-exports grew from 35% to 56% of total Hong Kong exports. Hong Kong Monthly Digest of Statistics, May 1989, pp. 19 and 22. See also de Rosario, Loise, “Entrepreneurial entrepot Hong Kong profits from the opening of China's trade with the world,” Far Eastern Economic Review, 28 February 1985, pp. 96–97.Google Scholar According to one Chinese source, 40% of China's exports pass through Hong Kong and cumulative loans to China from Hong Kong banks were US$22 billion in 1987: Jiadun, Xu, “Fully develop Hong Kong's role in the economic development of the coastal region,” Xinhua yuebao (New China Monthly), No. 7 (1988), pp. 73–75.Google Scholar

²³ “Taiwan-mainland trade may top US$4 billion,” South China Morning Post, 23 March 1990; “Taiwan PM wants trade with China,” ibid. 26 March 1990; “China expects rise in Taiwan trade,” International Herald Tribune, 23 March 1990. See also Yun, Ken, “Crossing the Yellow Sea,” The China Business Review, January-February 1989, pp. 39–47.Google Scholar

²⁴ Taiwan has already liberalized its capital exports and introduced draft regulations for private relations with the mainland; these are in Jingji yuebao, (Economic Monthly) (Taibei), 15 January 1990.

²⁵ In addition to the NIRA symposium referred to supra 21 see JETRO, 1988 Seikai to nihon no kaigai chokusetsu toshi (The World and Japanese Overseas Direct Investment in 1988), esp. pp. 163–69 and MITI, 1988 Keizai kyoryoku no genjo to mondaiten, pp. 140–41 and 180ff.

²⁶ In 1988 manufactured goods accounted for about 50% of China's exports to Japan and exports of foodstuffs and garments increased by 38–8% and 73–7% respectively. JETRO China Newsletter, No. 79, 1989. p. 22.

²⁷ The basic philosophy of the reform is spelled out in the editorial “Emancipate the mind for overall, balanced economic development,” Renmin ribao, 24 February 1979.

²⁸ A key survey of the issues is Guoguang, Liu. “The hard experience of China's forty years of economic construction and ten years of economic reform,” Jingji yanjiu (Economic Research), No. 9 (1989), pp. 3–12.Google Scholar In this Liu notes that under reform, retained enterprise profits have risen from less than 5% to 45% per cent of total profits. See also, “From excessive centralization to excessive decentralization,” Renmin ribao, 18 December 1989. A detailed analysis of the fiscal disintegration is Shaofei, Wang, “An analysis of the reason for our country's budget shrinkage and of countermeasures towards it,” Tsaimao jingji, No. 7 (1989), pp. 21–25.Google Scholar

²⁹ Local planners report that enterprises seeking capital funds have at least six basic options including public and private external finance. An official account of informal capital markets has commented: “Non-bank financial structures have sprung up… all sorts of bonds have been issued and these have become a major cause of the endless expansion of fixed capital investment,” “The key to controlling investment is reducing investment credit,” Renmin ribao, 22 January 1990.

³⁰ Chengrui, Li, “The Chinese economy in 1988: achievements, difficulties, prospects,” Tsaimao jingji, No. 5 (1989), pp. 3–8.Google Scholar

³¹ The problems of the dual price system have been fully documented by Ma, Hong (ed.) Zhongguo jiage jiegou yanjiu (Research into the Structure of Chinese Prices) (Shanxi: Chinese Academy of Social Sciences Publishing House. 1988).Google Scholar See esp. details of profits and dual prices, pp. 91. 393–95. The role of enterprises in purchasing consumer goods on behalf of staff is described in “Panic buying sends retail sales soaring,” China Daily, 12 September 1988. In Autumn 1988 the State Council issued regulations forbidding organizations to purchase a list of 29 items including washing machines, colour televisions, small cars and watches, and the meaning of the phrase, “everyone does business’ is illuminated by the sale of stock from the Hubei Fertilizer Factory in 1988. This was purchased by staff from hotel, transport, education, banking, legal and other departments and organizations, all hoping to resell at a profit, see Ishihara, Kyoichi, “China's multiple price system,” JETRO China Newsletter, No. 80 (1989), p. 7.Google Scholar

³² Central Committee Directive, Guangming ribao (Enlightenment Daily), 17 January 1990Google Scholar; “The core strength in leadership of our activities is the Chinese Communist Party,” ibid. 1 July 1989, and “Initial results from large scale investigation into finance, tax and price [malpractices],” Renmin ribao. 9 November 1989.

³³ Central Committee Directive.

³⁴ South Jiangsu is the model region for this. Tao, Youzhi (ed.). Sunan moshi yu zhifu zhidao (The South Jiangsu Model and the Road to Riches) (Shanghai: Shanghai Academy of Social Sciences Publishing House. 1988), esp. pp. 215–16.Google Scholar see also Ming, Zhu, “A survey of the external orientation of the development of Township industry in Suzhou,” Guoji maoyi wenti (International Trade Problems). No. 2 (1988), pp. 61–63.Google Scholar

³⁵ The literature on this topic is vast. Valuable recent books are, Yang, Guangwu (ed.), Shewai jiage he guoji shichang jiage (Foreign Price Structures and International Market Structures) (Beijing: Chinese People's University Publishing House, 1987)Google Scholar, esp. the section on exchange rates and prices, pp. 166–73; Hengshou, Wang, Duiwai jingji maoyi (Foreign Trade) (Zhejiang People's Publishing House, 1988)Google Scholar; and on pricing, Dengsong, Zhong, “The link between our country's internal price structure and the international market structure,” Tsaimao jingji, No. 4 (1988), pp. 27–28.Google Scholar

³⁶ The survey of enterprise managers’ understanding of prices and incentives is reported in Xiaomin, Zhao and Ze, Song, “Let enterprises open to the world market,” Tsaimao jingji, No. 4 (1988), pp. 27–28Google Scholar, and the problem of “profitability” in Gangmin, Yuan, “Problems and opportunities for changing China's export structure,”ibid. No. 6 (1987), pp. 38–42.Google Scholar The struggle to adjust internal prices to make exporting possible is documented in several sections of State Price Bureau Research Office, Wujia wenjian xuanbian 1979–1983, (Select Documents on Commodity Prices) (Beijing: China Finance and Economic Publishing House, 1986).Google Scholar

³⁷ A survey of export planning and incentives is in Wuhua, Song, Duiwai jingji maoyi (External Economic Trade) (Zhejiang: Zhejiang People's Publishing House, 1988), pp. 133 ff.Google Scholar (This discusses the special incentive payments for exports introduced in 1985.) One author who has argued that incomplete trade reform has led to unnecessary foreign exchange losses is Shengting, Zhao, “The influence of exchange rate depreciation on our country's foreign trade,” Tsaimao jingji, No. 3 (1987). pp. 53–55.Google Scholar Others have argued that progressive expansion of foreign exchange retentions and of the “free” foreign exchange market is the way to reform the entire system.

³⁸ China External Trade and Capital (Washington: The World Bank, 1988), p. ix.

³⁹ I have discussed the 1970s in more detail in a paper to be published by the Chinese University of Hong Kong.

⁴⁰ Shijun, Wang, “The economic development of the Asia Pacific Region and China's strategy,” Guoji shangwu yanjiu (International Business Research), No. 2 (1986), pp. 1–6Google Scholar; Xi, Xue, “The strategy of'international circulation’ is not the same as the strategy of coastal development,” Guoji maoyi wenti, No. 6 (1988), pp. 15–17Google Scholar; and Shoulian, Zhang, “Don't miss the opportunity offered by a global shift in the comparative advantage of labour intensive production,” Guoji maoyi wenti, No. 7 (1988), pp. 18–22.Google Scholar See also Tzuyang, ZhaoSpeech on the coastal strategy, reprinted in Xinhua yuepao, No. 3 (1988), p. 80.Google Scholar

⁴¹ Chengsan, Ma, “The peculiarities of the Japanese market and some problems in relation to our expanding exports to Japan,” Beiji, Zhang, Zhungguo duiwai maoyi yu guoji shichang (China's Foreign Trade and International Markets) (Beijing: China Foreign Trade Publishing House, 1987), pp. 118–138Google Scholar; Longxiang, Huang, “Increase the penetration of our export goods in the Japanese market,” Guoji shangwu yanjiu, No. 3 (1986), pp. 35–39Google Scholar, and an important internal discussion paper of the MOFERT, “The new shift in the Japanese market and our policies,” Waimao diaoyan (Trade Research Exchange), No. 737 (1988), pp. 2–11.Google Scholar The special problems of tourism are illuminatingly discussed in Pinglin, Yang, “The place of our country's tourism in the Japanese tourist market,” Tsaimao jingji, No. 2 (1987), pp. 50–53.Google Scholar

⁴² Zike, Song, “A discussion of the international economic environment of our coastal development and outward looking economy,” Chinese People's University Materials Reprint Series, F52 No. 2 (1989), pp. 36–40.Google Scholar

⁴³ Bangyan, Feng, “The role of Hong Kong in the course of China's economic development,” Jingji yanjiu, No. 4 (1989), pp. 64–70Google Scholar; Hongxu, Jing, “The economic relations between mainland China and Taiwan and the concept of a Chinese economic bloc,” Chinese People's University Materials Reprint Series, F14, January 1989, pp. 59–64Google Scholar; Ziguei, Gan (deputy chairman, State Planning Commission), “Some questions relating to the implementation of the coastal strategy,” Xinhua yuepao, No. 7 (1988), pp. 71–73Google Scholar, and “Retrospect and prospect for foreign trade,” Renmin ribao, 30 December 1989.

⁴⁴ Quoted in Tsaimao jingji. No. 2 (1990), pp. 25–30.

⁴⁵ Economic Planning Agency, Ajia taiheiyo chiiki hanei no tetsugaku. p. 158.

⁴⁶ Economic Planning Agency, 90 nendai no taiheiyo keizai, pp. 94–96.

⁴⁷ The highly political character of Japanese official finance is illustrated by Akihiko Tanaka, ASEAN Factor in Japan's China Policy? A Case Study: Japan's Government Loans to China, 1979. Working Paper No. 6, Department of Social and International Relations, University of Tokyo, 1988. The Chinese, too, compartmentalize their opinions about Japan. In the autumn of 1965,1 was struck by the hundreds of Japanese business and technical experts touring China in groups, everywhere received with the utmost courtesy. However, almost every evening, along with other westerners, I was taken to entertainments celebrating the thirty year anniversary of China's victory in the Sino-Japanese war in which the Japanese were caricatured in a cruel manner.

⁴⁸ Nihon keizai shimbun surveys, reported by Asia Advisory Services, Tokyo.

⁴⁹ Report on the Survey of Overseas Investment in Hong Kong's Manufacturing Industries 1989 (Hong Kong: Industry Department, 1989).