The establishment of the People's Republic of China (PRC) serves
          as a foundation for all progress and development New China has
          achieved.  Since the PRC was founded in 1949, the Chinese people,
          under the leadership of the Communist Party of China (CPC), have
          scored world-acknowledged achievements in construction through
          self-reliance and hard struggle.  After three decades' exploration
          and through the emancipation of productive forces stemming from
          reforms and opening up since the 3rd Plenary Session of the 11th CPC
          Central Committee, China has greatly narrowed the gap between it and
          developed nations.  The Chinese people have turned a poor and
          backward old China into a new socialist China with a relatively
          complete industrial system and a national economic system.
             Under the leadership of the CPC and with the concerted efforts of
          the Chinese people, China's productive forces have witnessed
          unprecedented growth.  Since China initiated reforms and opening up,
          its comprehensive national strength has grown rapidly, with its
          gross domestic product (GDP) rising to 7,955.3 billion yuan in 1998
          from 362.4 billion yuan in 1978. It has risen to the 7th place in
          the world and ranks first among the developing countries in terms of
          the total economic sale.  In 1998, its total investment in fixed
          assets by the whole society amounted to 2,845.75 billion yuan; its
          financial revenues, 985.3 billion yuan and the state financial
          expenditure, 1,077.1 billion yuan; the savings deposits in and loans
          from financial institutions reached 9,569.8 billion yuan and 8,652.4
          billion yuan, respectively.  Its external trade increased to 323.9
          billion U.S. dollars in 1998 from 1.13 billion U.S. dollars in 1950,
          up 286 times. It ranks 9th among all countries in terms of foreign
          trade. Its imports were 140.17 billion U.S. dollars and its exports,
          183.76 billion yuan.  China has forged trade relations with more
          than 220 countries and regions.  On the world economic arena today,
          China has become a world-recognized political and economic power
          that plays a vital role in international affairs.
             With the progress in industrialization, China has gradually
          upgraded its industrial structure.  In 1949, agriculture accounted
          for 58.5 percent of China's total social output value, and the
          industrial sector made up only 30 percent of the total industrial
          and agricultural output value.  In 1998, the ratio of China's
          primary, secondary and tertiary industries was 18:49.2:32.8.  
             China's industrial sector has also seen rapid growth, with its
          industrial added value surging from 11.98 billion yuan in 1952 to
          3,354.1 billion yuan in 1998. With the price factor excluded, the
          value shot up 157.7 times, or rising at an average annual rate of
          11.6 percent.  In 1998, the total industrial output value was
          11,969.3 billion yuan and the annual industrial added value was
          3,354.1 billion yuan, a 8.9 percent increase over 1997.  The
          added-value of the state-owned industrial enterprises and
          non-state-owned enterprises with an annual turnover of more than 5
          million yuan was 2,004.6 billion yuan, rising 8.8 percent over 1997.
          Of the figure, the added-value of the state-owned and state holding
          enterprises was 1,136.5 billion yuan, increasing 4.9 percent; that
          of the collectively-owned enterprises, 499 billion yuan, up 8.7
          percent; that of share-holding enterprises 133.8 billion yuan, up
          11.9 percent; that of foreign-funded enterprises and the enterprises
          funded by businesses from Hong Kong, Macao and Taiwan was 383.5
          billion yuan, up 12.7 percent; that of other types of enterprises
          was 75.3 billion yuan, a 19.6 percent rise.  In 1998, the
          production-to-sales ratio of industrial products was 96.49 percent,
          the same as in 1997. Production of new manufactured goods rose 4.9
          percent over 1997.  The qualified rate of major industrial products
          reached 89.98 percent, 5.18 percentage points higher than in 1997.  
              At present, China ranks first in the world in production of
          steel, coal, cement, fertilizers and TV sets. It places second in
          the world in the output of electricity, cloth and chemical fibers.
          It ranks fourth and fifth in the output of sugar and crude oil,
          respectively. It ranks first in the world in the output of grain,
          meat, cotton, peanuts, rape seed and fruits. It places second in
          production of tea, soybeans and sugar canes.
          China's rural economy has scored an all-round development, with the
          output of farm products growing steadily.  Its grain output reached
          490 million tons in 1998; the agricultural added value rose to
          1,429.9 billion yuan in 1998 from 34.3 billion yuan in 1952.  In
          1998, the total output value of agriculture, forestry, animal
          husbandry and fishery reached 2,510.3 billion yuan.  Since
          initiating reforms and opening up, China's rural industry has
          developed vigorously. Construction of small cites and towns has
          started, enabling about 150 million surplus rural laborers to be
          employed in other sectors and helping more than 200 million rural
          residents to shake off poverty. Meanwhile, most rural residents not
          only have solved the food problem, but also are moving to a
          relatively comfortable and affluent life.
             In the past five decades, the living standard of China's urban
          and rural residents has jumped over several levels, with changes in
          quality taking place.  The per capita income of rural residents rose
          from 44 yuan to 2,162 yuan, a 48-fold increase. The actual
          per-capital annual consumption of urban and rural residents rose
          from 80 yuan in 1952 to 2,973 yuan in 1998.  The saving deposits of
          urban and rural residents soared from 860 million yuan in 1952 to
          5,340.8 billion yuan.  The per-capita net income of rural families
          in 1998 reached 2,162 yuan and the per-capita disposable income of
          urban families 5,425 yuan.
             As for China's external trade in 1998, because of the adverse
          effects of the Asia financial crisis, the growth of China's exports
          slowed down considerably; its imports also fell as a result of the
          sluggish domestic demand and other factors.  The total import and
          export value was 324 billion U.S. dollars, down 0.4 percent from the
          previous year.  The export value was 183.8 billion U.S. dollars, up
          0.5 percent.  The export of general merchandize dropped 4.8 percent;
          the export of processing trade rose 4.9 percent.  The total import
          value was 140.2 billion U.S. dollars, down 1.5 percent.   On
          balance, the trade surplus was 43.6 billion U.S. dollars.  
          Contracting for overseas projects, cooperation in labor service and
          consulting services for design kept growing.  In 1998, the value of
          contracts for overseas projects signed amounted to 11.8 billion U.S.
          dollars, increasing 3.7 percent over the previous year; the turnover
          topped the mark of 10 billion U.S. dollars to 10.1 billion dollars,
          rising 20.9 percent.  At the end of 1998, China had 325,000 workers
          working abroad, 18,000 more than in the previous year.
             China began making utilizing overseas funds in July of 1979.  In
          April 1980, the Beijing Air Catering Co. Ltd. invested by Wu
          Suk-qing from Hong Kong obtained No.001 License for overseas-funded
          enterprises, marking the beginning of introducing overseas
          investment.  By the end of 1997, China had introduced 464 billion
          U.S. dollars in overseas funds, including direct foreign investment
          of 348.65 billion U.S. dollars and foreign loans totaling 115.95
          billion U.S. dollars.  In 1998, foreign investment in China
          proceeded smoothly, whereas foreign loans declined.  Foreign funds
          brought into China in 1998 were 58.9 billion U.S. dollars, down 7.9
          percent.   Of the figure, direct foreign investment was 45.6 billion
          U.S. dollars, increasing 0.7 percent; foreign loans were 11 billion
          U.S. dollars, a 8.5 percent decrease.  For eight straight years,
          China has been the first largest country among developing countries
          and the second largest country in the world in absorbing direct
          foreign investment, next only to the United States. Foreign-funded
          enterprises are the general term for Sino-foreign funded
          enterprises, Sino-foreign cooperative businesses and solely-funded
          foreign enterprises in China's opening-up drive to make use of and
          absorb foreign funds.   By setting up foreign-funded enterprises,
          China has absorbed a large amount of foreign funds and introduced
          some advanced and useful technology and equipment, filling up its
          technological vacancy, upgrading large amounts of products,
          improving production standards of some industries, providing a great
          many employment opportunities, expanding tax sources and promoting
          the development of the national economy.  Foreign-funded enterprises
          have linked the domestic market to the overseas market, and promoted
          the improvement of the structure of China's export-oriented products
          and the development of its external trade, and quickened China's
          pace of adapting to the world market.  With their flexible
          operational mechanism, strict management and fair competition,
          foreign-funded enterprises have set an example for state-owned
          enterprises to transform their operational mechanism and introduce
          China's modern enterprise system.  They have also trained a large
          number of Chinese managerial personnel and modern workers.   By the
          end of June of 1998, China had 236,400 foreign-funded enterprises
          involving a total foreign investment of 770.742 billion U.S.
          dollars.  Such enterprises have become a major component of China's
          national economy.
             China's GDP rose from 67.9 billion yuan in 1952 to 7,955.3
          billion yuan in 1998, increasing 7.7 percent annually with the
          exclusion of the price factor and being 250 percent of the world
          growth rate during the corresponding period. According to the latest
          statistics from the National Bureau of Statistics, in 1999, China's
          GDP reached 8,319 billion yuan, rising 7.1 percent over 1998.  By
          December 31, 1999, its foreign exchange reserves had reached 154.675
          billion U.S. dollars, 9.716 billion U.S. dollars more than at the
          end of 1998.  The exchange rate of Renminbi against other currencies
          continued to be stable.
             Since 1999, China has further raised export tax refunding rates
          and adopted a series of policies to accelerate export tax refunding.
          Furthermore, the economies of its neighboring countries have started
          to recover and the impact of the Asian financial crisis is
          diminishing.  In the second half of 1999, China's exports stopped
          the downward turn and began to rebound.  In the first 11 months of
          1999, China's trade surplus was 26.4 billion U.S. dollars and the
          direct foreign investment in the country was 37.09 billion U.S.
          dollars.
             On November 15, 1999, the Chinese and the U.S. governments signed
          a bilateral agreement on China' entry into the World Trade
          Organization (WTO).  The signing of the agreement will help China to
          quicken the process of accession to the WTO. It will help advance
          the all-round development of economic and trade cooperation between
          China and the United States. It is also conducive to the
          stabilization and development of Sino-U.S. relations.  It will also
          inject new vigor into the development of the economy and prosperity
          of the world as a whole. This also indicates that a stable China
          will usher in a new wave of foreign investment and that its economic
          activity will have a greater space and leeway.
             According to statistics from and calculations by a number of
          international organizations and experts, China is the seventh
          largest economy in the world and it ranks ninth in the world in
          terms of comprehensive economic strength.  But it is in the 23rd
          place in terms of the international competitive edge.  China remains
          a developing country and it is still among the low-income countries
          in terms of per-capita GDP.
             China will further stimulate effective demands, accelerate
          infrastructural construction, readjust its economic structure,
          maintain stable agricultural development, promote enterprise
          technological progress and industrial upgrading, step up ecological
          construction, and improve the quality and efficiency of economic
          growth.  It enjoys a bright future in economic development.