China

J

Communications

Communications has a centuries-old tradition in China. Nearly 3,000 years ago, Chinese built towers of fire to warn of approaching enemies. Centuries later, posters written in Chinese characters were put up by the government at city gates and other busy places to warn of the presence of dangerous animals or to make known wanted criminals. The tradition of using posters for delivering information was continued into the 20th century. In many Chinese cities, newspapers are put on walls for public reading. Posters were widely used in the mid-1950s during the Hundred Flowers Campaign, when the government encouraged people to provide constructive criticism of the policies of the CCP. The movement came to an abrupt end in 1957 when the government imposed strict controls on freedom of expression. During the Cultural Revolution (1966-1976), students hung millions of posters with revolutionary messages on walls throughout China. In 1979 opinions expressed on what came to be known as the Democracy Wall in Beijing were also written on posters. However, the use of posters for expressing individual opinions was outlawed after the 1989 Tiananmen Square Protest, in which pro-democracy demonstrators were violently suppressed by the military.

While the traditional means of communication are waning, modern communication facilities are developing rapidly. In the early 21st century more than 2,000 newspapers were being published in China. Major national newspapers include Renmin Ribao (People's Daily), the official paper of the CCP; Jiefangjun Bao (Liberation Army Daily), the paper of China's Central Military Commission; and Guangming Ribao (Guangming Daily), a paper popular among scientists and educators. Among the most influential magazines are Liaowang (Outlook) and Qiushi (Seeking Truth). Magazines that cover social, cultural, and economic topics are very popular. The Chinese government pressures those who work in the media to avoid politically sensitive subjects. Consequently, the media practices a high degree of self-censorship.

The largest radio broadcaster is the government-run China National Radio in Beijing. There are also government-run radio stations at the provincial and local levels. Radio broadcasts reach more than 90 percent of the Chinese population. China's first television station was established in Beijing in 1958. It developed into the only national broadcaster, the state-run China Central Television (CCTV), which now offers 14 channels in China. CCTV also broadcasts outside China with two foreign language channels, one in English and one in both French and Spanish. Many of the CCTV channels were developed in the 1990s to serve the country’s rapidly growing cable television market. In addition to the national broadcasts of CCTV, many provinces and cities have local stations, and their broadcasts are commonly available to a larger audience via satellite services. In 2000 there were 303 television sets for every 1,000 people. China has the world’s largest cable television market. In 2002 there were 75 cable television subscribers for every 1,000 people.

China's newspapers, magazines, and radio and television stations receive their news from the official Xinhua News Agency, and supplement Xinhua news with their own reports. Xinhua has its head office in Beijing, with branches in provincial capitals throughout the country and more than 100 offices overseas. It publishes news in Chinese, English, French, Spanish, Portuguese, Russian, and Arabic. The other news agency in China is Zhongguo Xinwen She (China News Agency), also a state agency, which provides news to Chinese-language newspapers around the world.

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Although most Chinese have somewhat limited access to telecommunications services, the quality of communications equipment is generally good. As a result of reform policies, telecommunications in China developed very rapidly in the 1990s. Mainline telephone service extends to virtually all Chinese localities, but more and more Chinese people are using mobile phones. In 2005, for every 1,000 people in China, there were 269 telephone mainlines, compared with 302 mobile phone subscribers. An estimated 393 million mobile phones were in use in China in 2005.

Computers are very popular in Chinese universities and offices, and primary and secondary schools are increasingly obtaining them. More and more families have their own computers. As with mobile phone use, Internet access skyrocketed in the early 21st century. In 2005 about 111 million Chinese people were online.

K

Commerce

Before economic reforms began in the late 1970s, state-owned enterprises generally did not purchase their raw materials and equipment as commodities, but rather received them directly from the government. The enterprises then submitted their finished products to the government for distribution. The Supply and Marketing Cooperative, a state-run operation, distributed consumer goods to the rural population. Such essential items as grains, oil, meat, sugar, and cotton fabric were rationed because they were relatively scarce and because low fixed prices had to be ensured for everyone.

With the success of the economic reforms, the government abandoned the rationing of food and cotton fabric in the early and mid-1990s. Market forces now largely determine the circulation of commodities in China. State-owned enterprises are free to obtain some of their supplies and to sell a portion of their product on the market. Nongovernmental enterprises now account for at least half the volume of retail sales. In urban centers, there has been a rapid growth of collectively and individually owned businesses such as restaurants, teahouses, inns, hair salons, photography studios, tailor shops, and businesses providing all types of repair and maintenance services. Rural markets, where individual farm households sell their surplus product or purchase supplies, are also growing.

L

Foreign Trade

China’s foreign trade is controlled mainly by state-owned trading corporations at the national and local levels. Since 1979, local corporations have gained increasing autonomy in their foreign trade decisions. The state has relaxed some trade restrictions, which has attracted foreign investment and increased trade activity. Chinese companies that partner with foreign companies can import equipment and raw materials for their own use and can export their products.

In 2004 Chinese exports totaled $593.3 billion, and imports totaled $561.2 billion. Chief exports included clothing, accessories, and footwear; textiles; petroleum and petroleum products; and telecommunications and sound equipment. Among the major imports were machinery, steel products and other metals, automobiles, synthetics, agricultural chemicals, rubber, wheat, and ships. Principal purchasers of China’s export goods are Hong Kong (which is part of China but has a separate economy), the United States, Japan, South Korea, and Germany; chief sources for imports are Japan, Taiwan, the United States, South Korea, and Germany.

China’s trade relations with the United States were periodically strained in the 1990s as a result of American criticism of China’s human rights practices. Several times the United States threatened to suspend normal trading status, formerly called most-favored-nation trading status, for China. With normal trading status, American tariffs on imported Chinese goods are similar to the tariffs the United States imposes on goods from most other countries. Without normal trading status, the tariffs would be much higher, and the price of Chinese goods would be higher for American consumers, which would likely cause a decrease in the volume of trade between the two countries. However, after China agreed to reforms designed to open a wide range of industries to international competition and investment—such as reducing tariffs and other barriers on imports of many U.S. industrial and agricultural products—the U.S. Congress in 2000 passed legislation giving China permanent normal trading status. Many experts believed that normalizing trade with China would foster cooperation instead of confrontation, and would therefore help strengthen support for new environmental, labor, and human rights reforms within China. China became a member of the World Trade Organization (WTO) in 2001. In joining the WTO, China agreed to reduce import tariffs, drop many restrictions on foreign investment, and abide by WTO standards for protection of patents, copyrights, and intellectual property.

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Currency and Banking

China’s basic unit of currency is the renminbi, commonly called the yuan (8.20 yuan equal U.S.$1; 2005 average). The country’s banking system is under government control. The People's Bank of China is the central financial institution, and it issues all Chinese currency. However, China's international accounts and foreign currency arrangements are primarily the concern of the Bank of China, which has more than 500 foreign branches. In addition, China has four other major banks: the Agricultural Bank of China, which is responsible for making loans to the rural sector; the Bank of Communications of China, a commercial bank; the Industrial and Commercial Bank of China, which handles industrial and commercial credits and international business; and the People's Construction Bank of China, which deals with funds for basic construction. The China International Trust and Investment Corporation raises funds for investment in China and helps arrange joint ventures inside the country and overseas. There are stock exchanges in Shanghai and Shenzhen.

Post-1979 reforms to the banking sector include the strengthening of the role of the People's Bank of China and the establishment of new commercial banks. Many major foreign banks and insurance companies now have offices in China, and foreign participation in China’s banking, insurance, and financial services is expected to continue to rise.

Tiejun Yang contributed the Economy section of this article.

VI

Government

The structure of China’s government follows a Leninist model of one-party rule (see Communism) established by revolutionary leader Mao Zedong in 1949. Under the Leninist system, the mandate to govern originates not in elections but in the ruling party’s armed seizure of power. The claim to legitimacy rests on the ruling party’s assertion that it serves the interests of the people. Russian revolutionary leader Vladimir Lenin first established this system in the Union of Soviet Socialist Republics (USSR), and it was later adopted by or imposed on many other socialist states. In China, the ruling party is the Chinese Communist Party (CCP), which came to power in 1949 and established the People’s Republic of China.

The CCP dominates policy making and policy execution through its members in the government. Within the state (governmental) structure, the highest organ in theory is the legislature, called the National People’s Congress (NPC). In practice, however, the most powerful state organ is the cabinet, called the State Council, which is headed by the premier.

China launched a period of economic reform in 1978. In the shift from a government-controlled planned economy to a so-called socialist market economy, specialized government agencies have been strengthened or newly established and have been given more operational independence. The National People’s Congress has adopted hundreds of laws aimed at providing a more predictable environment for economic activity, and in the course of this work it has expanded its professional staff and its own authority. State-owned enterprises have gained considerable autonomy and some have been privatized, while a new sector of private and collective enterprises has developed largely independent of direct state control. Local governments have gained greater authority to adapt national policy to local circumstances. They also have increased their shares of tax revenues at the expense of taxes remitted to the central government. In the midst of these changes, the CCP largely has withdrawn from managing the day-to-day details of government affairs, but it has continued to set major policy. Furthermore, through its members in the government, the CCP has restricted political activities that promote views contrary to the party’s objectives, in effect allowing no significant opposition to emerge.