Introduction

New China’s industry had very little to start with. In 1949 it had accumulated only 12.4 billion yuan in fixed assets, and industrial products were very few: the output of yarn was 327,000 tons, and that of raw coal 32 million tons. Most finished industrial products were imported at that time.

After the founding of New China in 1949, the Chinese government started construction on a large and planned scale. As a result, the country’s industrial foundation has been strengthened and its production level raised rapidly. The metallurgical, mining and energy industries, airplane and automobile industries, and the new industries, including petrochemicals, computers, telecommunication equipment, instruments and meters, and aeronautics have been built up from nothing. Since 1978, the policies of reform and opening to the outside world have enabled China’s industry to enter a stage of great innovation and development. From 1978 to 1999, China’s industry increased at an average rate of 11.1 percent every year, and the comprehensive industrial strength was remarkably enhanced. By 1999, some 3,535.7 billion yuan of industrial added value had been attained, an increase of 10.2 times over 1978.

China’s industrial reform first began by giving more rights to and leaving more profits for enterprises, extending enterprises’ independent operations and practicing the enterprise contract responsibility system, which fully mobilized the initiative and creativeness of enterprises and their workers and staff members, and created an excellent environment for the improvement of the operation mechanism of enterprises. Next, China speeded up its industrialization through the introduction of foreign capital and opening to the outside world. The establishment of large numbers of Sino-foreign joint and wholly foreign-owned enterprises has not only brought more capital to enterprises, but also advanced equipment and modernized management. Through 21 years of reform, China’s industry has got rid of the backwardness in which it could only make one or a few varieties of products and its technological level was low. The production level of industrial products has increased by a big margin. In 1999, the outputs of steel, raw coal, electricity and cement were 124 million tons, 1.045 billion tons, 1,239.3 billion kwh and 573 million tons—increases of 3.9 times, 69 percent, 4.8 and 8.8 times over 1978, respectively. The growth rates of chemical fibers, fertilizers, ethylene, plastics, plate glass and other important means of production products have doubled or more than doubled. Many consumer goods closely related to people’s lives have grown from zero and expanded from small to large, the growth rate of some products has even reached more than one hundred times, such as color TV sets, refrigerators, washing machines, air-conditioners, cameras, video recorders, VCD and DVD sets, and stereos. A number of new- and high-technology products have grown by leaps and bounds, such as stored-program-controlled switching systems, large-scale integrated circuits and micro-electronic computers. The output of cars is also increasing at a rapid rate, along with the increasing number of cars possessed by households.

The reform of state industrial enterprises, especially large and medium-sized enterprises, is the constant focus of China’s economic system reform. At present, in accordance with the principles of the modern enterprise system—“the property rights and responsibilities of enterprises will be clearly defined, the functions of the government separated from those of enterprises and enterprises scientifically managed”—strategic reorganization has been carried out in large and medium-sized enterprises to transform them into standard companies. In recent years a large number of enterprise groups have been set up through annexation during the re-organization of enterprises, such as the China Petroleum and Natural Gas Group, Shanghai Baoshan Iron and Steel Group, and some household appliance industrial groups, for instance, Changhong, Haier, Konka, Kelon and TCL. The Legend and Founder of Beijing University groups are prominent in the micro-computer industry. These groups take part not only in domestic but also international competition.

Though China has made rapid progress in industry, irrational structure within industries and unbalanced development in regional economies still exist. The reform of state enterprises has just been started, and the tasks are arduous. Facing the 21st century, China will quicken its steps in restructuring industry and establishing its new-type industrial system as fast as it can, to suit the development of socialist market economy.

The dam of the Ertan Hydropower Station,
the largest of its kind constructed
in this century in China.

Young workers of the main production
line of the Shanghai Baoshan
Iron and Steel Company.