I. General Outlook

The performance of the national economy in general was encouraging, and the targets of reform and development for the year were basically met.

The national economy, reversing the once downward trend of growth rate in the first half of this year, kept fairly fast growth. Preliminary statistics indicated that the gross domestic product (GDP) of the year was 7,955.3 billion yuan, up by 7.8 percent over the previous year. Of this total, the value-added of the primary industry was 1,429.9 billion yuan, up by 3.5 percent. The value-added of the secondary industry was 3,915.0 billion yuan, up by 9.2 percent, and that of the tertiary industry was 2,610.4 billion yuan, up by 7.6 percent. The overall productivity across all sectors of the economy was 11,401 yuan for the year, up by 6.9 percent over 1997.

The overall level of market prices declined. The consumer prices of households for the year went down by 0.8 percent, of which the prices for service items went up 10.1 percent, and the retail prices of commodities declined by 2.6 percent over 1997.

Work on employment was strengthened. By the end of 1998, the total of employed people in China numbered 699.57 million, or 3.57 million more than at the end of 1997. Of this total, 206.78 million were workers and staff in urban areas, an increase of 4.71 million persons over that at the end of 1997; another 32.32 million people were employed in private enterprises or self-employed in urban areas, an increase of 5.63 million. Progress was made in the implementation of reemployment program, and 6.09 million laid-off workers found new jobs through various measures. By the end of 1998, the urban unemployment rate as calculated from unemployment registration was 3.1 percent, the same level as that at the end of 1997.

The situation of balance of international payment was favorable, the exchange rate of RMB remained stable, and China's foreign exchange reserve continued to grow. By the end of 1998, the foreign exchange reserves reached 145.0 billion US dollars, an increase of 5.1 billion as compared with the figure at the end of 1997. The exchange rate stood at 1 US dollar = 8.2789 RMB yuan at the end of the year, an appreciation of 9 basic potions.

The major problems remained in economic and social development include: the excessive production capacity in most of industries due to years of duplicated constructions, resulting in the over-supply of products and the irrational economic structure; difficulties encountered by some of state-owned enterprises in their production and management, as was reflected by the still poor economic efficiency of such enterprises; the difficult life of some of households; the slow growth of farmers' income; the pressure of ensuring basic living conditions and reemployment of laid-off workers from state-owned enterprises; the sluggish market sales, in particular that on the rural markets; and the risk of financial sectors as accumulated over the past years that could not be neglected.

II. Agriculture

Good harvest was achieved in grain output in spite of serious disasters. Though influenced by exceptionally serious flooding in some areas of China in 1998, the grain production for the whole year was still better than that in the previous year. The output of summer grain declined by 14.6 million tons due to low temperature and rainy days during the growing period. Influenced by devastating flooding, the output of early rice declined by 5.3 million tons. In autumn, the comprehensive weather conditions, i.e. sunlight, heat and water were much better than previous year. This, accompanied with the enlarged planting areas of high-yield corns, has brought about increased in the output of autumn grain by a large margin. The total output of grain for the whole nation was over 490 million tons.

Production of some of cash crops grew while that of others dropped. Influenced by a planned decline in the planting areas, and the flooding in cotton-growing areas in the Yangtze River Basin, the output of cotton was 4.4 million tons, a decline of 200,000 tons as compared with that in the previous year. Growth was seen in the output of oil-bearing crops, sugar, tea and fruits. Output of oil-bearing crops was 22.92 million tons, up 6.3 percent, or an increase of 1.35 million tons over that in the previous year. Output of sugar was 97.65 million tons, up 4.0 percent over the previous year, or an increase of 3.79 million tons. The output of tea and fruits reached 665,000 tons and 54.9 million tons, up 8.5 percent and 7.9 percent respectively. Output of cured tobacco was 2.1 million tons, a drop of 46.0 percent, or 1.8 million tons less over that in the previous year.

Steady progress was made in animal husbandry and fishery industry. The total meat production of the year was 43.55 million tons, up 6.5 percent, and the production of aquatic products was 38.54 million tons, up 7.0 percent.

Forestry production kept its momentum of development. The natural forest protection project had initiated, and input into forestry was further enlarged. The total afforested area in 1998 was 4.73 million hectares, up 8.5 percent. The completed area of growing forest of state key forestry projects was over 11.0 million hectares, an increase by a large margin over that in 1997.

Construction of farmland irrigation and water conservancy was enhanced. Some 450,000 flood-damaged projects had been restored. About 30,000 kilometers of dykes and dams were reinforced, and 47,000 kilometers of waterways were dredged. Comprehensive land recovery program was applied to about 50,000 square kilometers of once eroded areas. A total of 1.1 million hectares of land were converted into farmland with effective irrigation system. Another 1.8 million hectares of land were guaranteed by water-saving irrigation systems.

III. Industry and Construction

New progress was achieved in the reforms of state-owned industrial enterprises; big step was taken in separating enterprises from government management. Preliminary achievements were made in the adjustment of some of the major industries through reform, reorganization and transformation. Some enterprises were merged or declared bankrupt, while others were organized as mega enterprise groups, for instance: China National Petroleum and Natural Gas Corporation, China Petrol-Chemical Corporation and Shanghai Baogang Steel Group. Over 5.12 million outmoded spindles of textile sector were reduced and eliminated, with some 660,000 employees laid off. Supervision rights for 94 state key coal mines were transferred from the central government to provincial levels, and the structural adjustment was strengthened to close a number of unlicensed, heavy-polluting and irrationally distributed small coal mines.

The industrial production kept steady growth. In 1998, the total value-added of the industrial sector was 3,354.1 billion yuan, up by 8.9 percent over the previous year. The value-added of state-owned industrial enterprises and of non-state-owned industrial enterprises with an annual sales income over 5 million yuan totaled 2,004.6 billion yuan, up by 8.8 percent. Of this total, the value-added created by state-owned enterprises and joint-ownership enterprises where state held the controlling share was 1,136.5 billion, up 4.9 percent. The value-added of collective enterprises was 499.0 billion, up 8.7 percent, that of joint-stock enterprises was 133.8 billion yuan, up 11.9 percent. The value-added of enterprises invested by foreigners or investors from Hong Kong, Macao and Taiwan was 383.5 billion yuan, up 12.7 percent, and the value-added of enterprises of other types of ownership was 75.3 billion, up by 19.6 percent. The value-added of light industry was 898.4 billion yuan, up by 9.1 percent, and that of heavy industry was 1,106.2 billion, up by 8.5 percent.

The product structure was further adjusted. Relative high growth was registered in the production of those products that enjoyed high technology and added value, such as: electronics, information and telecommunication products. The production of microcomputers, program-controlled switchboards, carrier wave communication equipment, optical communication equipment, and mobile communication equipment grew by a range of 16.9 percent to 53.7 percent, while the production of products for investment use, such as: cement, plate glasses, steel and rolled steel rose by 4.7-7.7 percent. The production of textile products, ordinary consumer goods and some electric products, which had an excessive supply, grew slowly. Sales ratio of industrial products for the whole year was 96.49 percent, maintaining the same level as that in the previous year. The production of new industrial products was up 4.9 percent over the previous year. The quality standards rate of major industrial products was 89.98 percent, up 5.18 percentage points over the previous year.

Economic efficiency of industry declined to some extent. The sales income of industrial enterprises reached 6,333.1 billion yuan, up 4.1 percent, while the profits made totaled 147.3 billion yuan, down by 17.0 percent. The loss incurred to loss-suffering enterprises stood at 155.6 billion yuan, up 22.1 percent over that in the previous year. Of this total, the loss of state-owned and state-controlling enterprises was 102.3 billion yuan, up 21.9 percent. The inventory of manufactured products reached 609.4 billion yuan, up 5.5 percent, or an increase of 32.0 billion yuan over that at the end of 1997. The overall efficiency index for industrial enterprises was 91.0, or 4.2 points lower than the figure for the previous year.

The construction industry developed rapidly. In 1998, the value-added of construction enterprises was 560.9 billion yuan, up by 12.0 percent over the previous year. The profits made by construction enterprises at and above grade four reached 11.3 billion yuan, up by 2.9 percent, and their taxes stood at 30.8 billion yuan, up by 13.4 percent. The total number of projects under construction reached 649,676, of which 228,236 projects were constructed through the bidding system, accounting for 35.1 percent of the total. The total floor space under construction during the year was 1,310.85 million square meters, an increase of 24.04 million square meters. Floor space of buildings completed during the year was 587.05 million square meters, down by 35.39 million square meters.

New progress was achieved in geological prospecting. Geological survey was carried to cover 90,000 square meters of areas, the geological features of which were illustrated on 1:50,000 scale maps. Some 232 new mineral deposits were discovered, 12 deposits more than the discovery made in 1997. Forty-five minerals were found to have increased (or prospective) reserves, including 760 million tons of crude oil, 260.2 billion cubic meters of natural gas and 6.4 billion tons of coal. The geological prospecting enterprises completed a total of 5.36 million meters of drilling.

IV. Investment in Fixed Assets

The total size of investment registered rapid growth. At the beginning of 1998, central government relied on the increase of investment as the major means to push forward economic growth. In particular, in the second half of this year, more active fiscal policy was adopted by issuing 100 billion yuan worth of long-term state treasury bond to enhance input in infrastructures, bringing about an accelerated growth of investment in fixed assets which became the main factor for the picking up of economic growth. The completed investment in fixed assets of the country in 1998 was 2,845.7 billion yuan, representing an increase of 14.1 percent over the previous year. Of this total, the investment of state-owned units was 1,566.2 billion yuan, up by 19.6 percent; of collective units, 371.7 billion yuan, a decline of 3.5 percent; of urban and rural residents, 363.8 billion yuan, up 6.1 percent; and of other economic entities, 544.0 billion yuan, up 19.1 percent. Analyzed by purposes, investment in capital construction was 1,190.4 billion yuan, up by 20.0 percent, that in technical updating and transformation reached 446.7 billion yuan, an increase of 13.9 percent, and that in real estate development was 358.0 billion yuan, up by 12.6 percent.

Further improvement was scored in the investment structure. The long-term special treasure bond issued by the state and the back-up credits were timely appropriated with respect to the availability of capitals. The completed investment in agriculture, forestry, animal husbandry, fishery and water conservancy was 68.4 billion yuan, up by 47.8 percent (of which, the investment in water conservancy was 41.9 billion yuan, up by 58.1 percent), and its share in the total investment rose from 2.6 percent to 3.2 percent. Investment in transportation and telecommunications was 499.0 billion yuan, up 53.4 percent, with its proportion rising from 18.4 percent to 23.6 percent. Structure of investment in real estate was adjusted to some extent; the construction of economic and suitable houses was rapid. The total investment in economic and suitable houses for the whole year reached 79.1 billion yuan, with completed floor space of 55.06 million square meters. Preferential policy in investment was further given to the western areas, the investment in western areas was up 31.2 percent over that in the previous year, and was 14.9 and 16.8 percentage points higher than that in the eastern and central areas.

State key construction projects progressed smoothly. A total of 164.7 billion yuan worth of investment was completed on 118 state key projects, a number of which were completed and put into operation.

The newly-increased annual production capacity in 1998 through capital construction projects included: 3.51 million tons of coal mining, 16.9 million kilowatts of power generation by large and medium-sized generators, 47.26 million kilovolt-amperes of power transformer equipment (including 7.79 million kilovolt-amperes of updated power grid in urban and rural areas), 13.78 million tons of oil extraction, and 2.4 billion cubic meters of natural gas. The year 1998 also saw the operation of 900 kilometers of new trunk railways, 596 kilometers of double-track railways, 995 kilometers of electrified railways, 1,478 kilometers of newly constructed express highways, 14.0 million tons of cargo-handling capacity of coastal harbors, 30,000 kilometers of long distance optical-fiber cable and 10,000 kilometers of newly constructed microwave digital telecommunication lines.

V. Transportation, Posts and Telecommunications

Transportation registered steady development, and posts and telecommunications kept fast growth. The value-added of these sectors in 1998 was 502.9 billion yuan, an increase of 8 percent over the previous year.

Due to the adjustment of the production structure and the change in the flow of coal, grain and other large sums of cargo, the total volume of freight transportation declined to some extent. Total volume of cargo transported by various means was 3,770.6 billion ton-kilometers, a decline of 1.3 percent as compared with 1997. Of this total, the cargo transportation by railways was 1,229.2 billion ton-kilometers, down by 6.2 percent; by highways, 543.8 billion ton-kilometers, up 3.1 percent; by waterways, 1,936.3 billion ton-kilometers, up 0.7 percent; and by airways, 3.35 billion ton-kilometers, up 14.9 percent. The volume of passenger transportation was 1,061.2 billion person-kilometers, an increase of 5.9 percent. Of this total, that carried by railways was 372.4 billion person-kilometers, up by 4.9 percent; by highways, 595.0 billion person-kilometers, up 7.4 percent; by waterways, 13.8 billion person-kilometers, down by 11.4 percent; and civil aviation, 80.0 billion person-kilometers, up 3.5 percent. Major coastal ports handled 910 million tons of cargo, up 0.5 percent. Coastal ports handled 340 million tons of merchandise for foreign trade, down by 7.4 percent, as a result of the slowed growth of China's foreign trade in 1998.

The business transactions of postal and telecommunication services in 1998 totaled 241.3 billion yuan, up 35.7 percent over the previous year. The total length of long distant optical lines reached 173,000 kilometers, the office exchanges increased their capacity by 22.21 million gates, making the total capacity reaching 130 million gates. Telephone users and mobile telephone users topped 100 million. There were 10.6 telephones per 100 population in China, and 27.7 telephones per 100 urban inhabitants. Sixty-seven percent administrative villages in rural areas had access to telephone services. Subscribers to data communication services of China Telecom totaled 1,535,000, including 680,000 users of CHINANET, and 525,000 subscribers to public multi-media service.

VI. Domestic Trade

Commodity sales on domestic market were stable. In 1998, the total retail sales of consumer goods was 2,915.3 billion yuan, up 6.8 percent over the previous year, representing a real growth of 9.7 percent if price factor was deducted. In terms of urban and rural areas, the retail sales of consumer goods in urban areas reached 1,782.5 billion yuan, and the retail sales of consumer goods at and below county level was 1,132.8 billion yuan, up by 7.1 and 6.4 percent respectively. In terms of different ownership, the retail sales of state-owned (including controlling share owned by the state) outlets was 702.3 billion yuan, down by 2.3 percent. The sales of collective outlets was 483.0 billion yuan; private and individual outlets, 1,219.5 billion yuan; and outlets of other forms of ownership, 510.5 billion yuan, representing an increase of 1.3 percent, 14.9 percent and 8.7 percent respectively over that in the previous year. In terms of different industries, the sales of the wholesale and retail trades was up 6.0 percent, and the sales of the catering industry was up 15.7 percent. The sales at the market for means of production was not brisk. The total sales of means of production were 1,179.8 billion yuan, down by 12.7 percent. Transactions at fair markets were stable; the total volume of business was 1,983.6 billion yuan, up by 13.8 percent over the previous year.

The economic efficiency of large commercial enterprises was low. The annual net sales of 500 state key wholesale and retail enterprises reached 248.7 billion yuan, down by 1.1 percent over 1997, and the gross profit ratio was 10.3 percent, down by 0.7 percentage points. Their total profits for the year was 5.0 billion yuan, a drop of 16.9 percent over the previous year.

VII. Foreign Economic Relations

In the area of foreign trade, the growth of export slowed down significantly as a result of Asian financial crises, and the sluggish domestic demand led to a decline of import. Total volume of export and import in 1998 reached 324.0 billion US dollars, down by 0.4 percent over the previous year. The value of export was 183.8 billion US dollars, up 0.5 percent. Of this total, the export of general trade was down by 4.8 percent, and that of manufacturing trade was up 4.9 percent. The value of import was 140.2 billion US dollars, down by 1.5 percent, resulting in a trade surplus of 43.6 billion US dollars. The structure of exports and imports was further optimized; the export of machinery and transportation equipment was up 14.9 percent, with its share in the total export rising to 27.3 percent. The import of machinery and transportation equipment was up 7.6 percent, with its share in total import rising to 40.5 percent. Facing the changing export situation, the strategy of multi-market was further promoted. Though the export to Asia declined by 9.9 percent in 1998, the export to Europe and North America was up 15.7 percent, that to Africa and Latin America was up 20.1 percent, and to Oceanic was up 11.0 percent.

Stable development was seen in foreign direct investment and China's borrowing from overseas declined. In 1998, the foreign capitals actually utilized stood at 58.9 billion US dollars, down by 7.9 percent. Of this total, the foreign direct investment amounted to 45.6 billion US dollars, up 0.7 percent, and the foreign borrowing was 11.0 billion US dollars, down by 8.5 percent.

Growing momentum was kept in construction projects, labor projects, design and consultancy services contracted by China with foreign countries. In 1998, contracts were signed with the overseas involving 11.8 billion US dollars, up 3.7 percent over the previous year. The accomplished business revenue topped 10 billion US dollars to reach 10.1 billion US dollars, up 20.9 percent. By the end of 1998, 325,000 Chinese workers were working overseas, 18,000 persons more than the figure at the end of 1997.

Progress was scored in international tourism. In 1998, China received 63.48 million tourists from overseas, up by 10.2 percent over the previous year. Of all tourists visiting China, 56.25 million were Chinese compatriots from Hong Kong, Macao and Taiwan, up 12.4 percent; 7.11 million were foreigners, down by 4.3 percent. Income of foreign exchange from tourism reached 12.6 billion US dollars, up 4.4 percent.

VIII. Banking and Insurance

Appropriate growth was seen in money supply. By the end of 1998, the money supply of broad sense (M2) was 10,449.9 billion yuan, up 15.3 percent over the previous year, and that of narrow sense (M1) was 3,895.4 billion yuan, up 11.9 percent. The cash money in circulation (M0) amounted to 1,120.4 billion yuan, up by 10.1 percent. Savings deposits in various forms in all banking institutions at the end of 1998 totaled 9,569.8 billion yuan, an increase of 1,340.2 billion yuan or 16.1 percent. Of this total, savings of enterprises accounted for 3,248.7 billion yuan, up 13.4 percent, and the savings deposits by urban and rural residents reached 5,340.7 billion yuan, up 17.1 percent. On the other hand, banks issued 8,652.4 billion yuan worth of net loans, up 15.5 percent.

Stock market developed steadily in the course of procedure standardization and enhanced supervision. In 1998, 109 companies issued A shares at Shanghai and Shenzhen stock exchanges, with capital paid-in topped 44.0 billion yuan. The number of listed companies in China stock markets rose from 745 at the end of 1997 to 851 at the end of 1998, worth of 1,950.6 billion yuan. The issue of B shares and H shares helped to draw 770 million US dollars worth of foreign capital. A total of 389.1 billion yuan worth of treasury bonds were issued in 1998 (not including the 270 billion yuan special treasury bonds issued by the Ministry of Finance to four state-owned commercial banks), and all treasury bonds due were repaid.

Stable progress was made in insurance service. In 1998, the insurance premium totaled 124.7 billion yuan (including foreign institutions), up 14.0 percent over the previous year. Of this total, the premium of property insurance was 50.0 billion yuan, that of life insurance was 68.3 billion yuan, and that of health and unforeseen accidents insurance was 6.5 billion yuan. The insurance companies paid an indemnity of 55.6 billion yuan as reparations in insurance programs, of which the indemnity of property insurance and short-term life insurance was 31.8 billion yuan. Another 23.8 billion yuan was paid as reparations in life insurance programs.

IX. Science and Education

Scientific and technical personnel developed steadily. By the end of 1998, China had 29.18 million professionals and technicians of all specialization working in state-owned enterprises and institutions, an increase of 2.0 percent over the figure at the end of 1997. There were 19,918 state-owned independent research and development institutions, research institutions affiliated to universities, and to large and medium industrial or construction enterprises at and above county level. A total of 2.86 million people were engaged in scientific and technological activities in the above-mentioned research institutions, of whom 1.67 million were scientists or engineers.

Financial input into scientific and technological activities increased. The expenditure on scientific and technological activities for the whole year was 117.7 billion yuan, up 10.7 percent over the previous year. Of this total, expenditure on research and development (R&D) was 52.6 billion yuan, up 9.2 percent over the previous year.

Basic research work was enhanced and new progress was achieved in national technical innovation. In 1998, the input in basic research work of the whole nation topped 3.7 billion yuan, up 26 percent over that in the previous year. In 1998, the state organized technical innovation projects and key pilot production projects of new products. Another 15 key projects concerning the development and approval of major technical equipment were conducted. The cooperation of enterprises with universities and scientific research institutions was further strengthened.

Scientific and technological undertakings made new achievements. In 1998, China gained 28,000 key scientific results, of which 2,500 results were in the field of basic theories, 24,000 results in applied technologies and 1500 results for soft science. About 4,700 results reached international advance level and 543 results received prizes from the state. The year 1998 also saw the successful launching of 6 satellites. A total of 121,989 applications for patents were received from domestic and overseas applicants, while 67,889 patents were authorized, up 6.8 percent and 33.1 percent respectively. Markets for the transfer of technology became more brisk. In 1998, a total of 280,000 contracts on the transfer of technology were signed, involving a transaction value of 43.0 billion yuan, up by 22.8 percent over the previous year.

Further improvement was made in technical services such as quality inspection, standardization, metrology and weather forecast. By the end of 1998, there were altogether 4,500 institutions in China that were responsible for the inspection and supervision of the quality of manufactured products, including 228 state inspection centers. Surveys were conducted by authorized institutions to check the quality of 7,804 kinds of products of 200 categories from 6,265 enterprises. There were altogether 3,875 authorized measurement inspection institutions, which enforced compulsory inspection on 22.12 million measuring instruments. The year 1998 also saw the operation of 1,213 urban and rural weather forecast service and transmission stations, and 235 satellite cloud map receiving stations throughout China. There were 1,267 seismology monitoring stations and 28 remote monitoring network stations. Some 20.82 million records of marine data were collected through 1,403 marine monitoring spots. Surveying and mapping departments published 1,070 kinds of maps.

Education of all levels and forms made steady development. The reform of the management system of higher education continued to deepen, and distribution of secondary and primary schools was further adjusted. There were 1,022 general universities in China with 3.41 million enrolled undergraduate students, including 1.08 million new entrants; 736 universities or institutions that offered courses leading to postgraduate degrees, with 199,000 enrolled graduate students, including 73,000 new entrants. There were 962 institutions of adult higher education, with 2.82 million enrolled students, including 1 million new entrants. There were 9.38 million students studying in 13,948 ordinary senior secondary schools, and 11.26 million students in 17,106 secondary vocational or technical schools of various types (including 1.73 million students in technical worker's training schools), accounting for 55 percent of the total enrollment students at senior secondary school level. Students enrolled in junior secondary schools totaled 54.5 million, with an enrollment rate of 87.3 percent, and pupils enrolled in primary schools numbered 139.54 million, with the enrollment rate of primary-school-age children being 98.9 percent. The drop-off rate of junior secondary school and primary school students was 3.23 percent and 0.93 percent respectively. There were another 2.51 million students in adult secondary specialized schools, and adult technical training schools offered courses to 86.82 million persons. A total of 3.21 million people completed basic literacy courses in 1998.

X. Culture, Public Health and Sports

Cultural and art undertakings made healthy and orderly progress. By the end of 1998, there were 2,635 art-performing groups, 2,915 culture centers, 2,721 public libraries and 1,289 museums. Seven hundred and forty-three medium and short wave radio transmitting and relaying stations throughout China brought radio programs to 88.2 percent of the total population, and 1,283 television transmitting and relaying stations (each with a capacity of over 1,000 watts) covered 89.0 percent of the population. There were 69,000 film-projection units throughout China. In 1998, China produced 82 feature movies and distributed 221 movies (including re-distributions) in China and 143 movies outside China. Ten movies won 12 prizes in various international movies festivals. National and provincial newspapers issued 19.5 billion copies; magazines, 2.5 billion copies; and books, 7.3 billion copies. There were 3,706 archives in China where 33.05 million documents were made accessible to the public.

Public health developed continuously. By the end of 1998, there were 310,000 health care institutions (including clinics), with a total of 3.14 million beds, 2.91 million of which in hospitals and health-care stations. There were 4.42 million health workers in China, including 1.41 million doctors in hospitals and health-care stations, and 1.07 million senior and junior nurses. China also had 5,907 anti-epidemic and disease prevention stations employing 220,000 health workers, and 2,724 maternal and child health-care institutions employing 73,000 health workers. Health service network was strengthened and improved at county, township and village levels, and over 75 percent of all counties fulfilled targets in the rural primary health care program. There were 50,000 health-care institutions at township level in rural areas, with 740,000 beds and 1,000,000 health workers. Rural villages with medical-care stations made up 89.5 percent of all villages in China, employing 1,330,000 rural doctors and health workers.

Vigorous development was scored in sports. In 1998, Chinese athletes won 83 world champions at national and international sport games. Thirty athletes and 3 teams broke 31 world records on 68 occasions. At the 13th Asian Games held in Bangkok, China won 129 gold medals and a total of 274 medals, confirming its No. 1 status in Asia's sports for the third time. The National Fit-keeping Program was further promoted.

XI. Environment Protection

Environment protection was further developed. By the end of 1998, there were 110,000 people working in environment protection agencies in China. Some 2,144 environment monitoring stations were in operation employing 57,000 workers. New achievement was made in the protection of nature, as was illustrated by the pilot establishment of 111 ecological demonstration zones. China had 926 natural protection areas, among which 136 were state-level natural protection areas. The legal construction for environment protection achieved new progress with further enforcement of environment-related laws. By the end of 1998, 395 standards concerning environment protection were formulated. Among all construction projects started in 1998, 88.0 percent of them implemented the evaluation program on the impact of the projects in question against the environment. About 90 percent of the projects put into operation in 1998 were equipped with pollution control facilities. A total of 9,575 projects against environment pollution were completed within the specified time frame during the year, absorbing a total investment of 1.01 billion yuan. Two thousand six hundred and six smoke/dust control zones were established in 513 cities, covering an area of 15,000 square kilometers; and there were another 1,994 zones covering 8,684 square kilometers in 402 cities, where the noise pollution was put under specified level.

Pollution prevention work started full swing in key river valleys and regions. Some 1,035 pollutant-discharging enterprises around Taihu Lake with a daily discharge of over 100 tons of waste-water were requested to establish treatment measures within a specified time frame. An investment of 1.45 billion yuan was put in the projects around the lake. Of above enterprises, 878 enterprises completed waste treatment projects, 14 enterprises stopped production to improve their environmental protection facilities, and another 143 heavy-pollution producing enterprises which were unable to meet the environment target were banned. By the end of 1998, the dischargers of industrial effluent around the Taihu Lake valley had basically met the national environmental standards and the water quality of Taihu Lake was better.

The Program of control of aggregated pollutants and China Trans-Century Green Program were carried out smoothly. By the end of August, 1998, 323 projects under such programs were completed, involving an investment of 18.99 billion yuan.

The environment condition for the whole country was still serious. The pollution in some of the large and medium-sized cities was aggravated; the pollution caused by garbage, farm chemicals and chemical fertilizers was still serious. The ecological problems of soil and water erosion, desertification and declined functions of forestry and grassland were prominent.

XII. Population and People's Life

The natural growth rate of population continued to decline. The year 1998 saw 19.91 million births with a crude birth rate of 16.03 per thousand, and 8.07 million deaths, representing a crude death rate of 6.50 per thousand. The net growth of population in 1998 was 11.84 million and the natural growth rate was 9.53 per thousand, or 0.53 per-thousand-points lower than that of 1997. By the end of 1998, the total population of China was 1,248.1 million. Of the total population, those living in urban areas were 379.42 million, accounting for 30.4 percent and those living in rural areas were 868.68 million, accounting for 69.6 percent. The proportion of population aged from 0 to 14 years was 25.7 percent, that aged 15-64 years was 67.6 percent. The proportion of population aged 65 and over was 6.7 percent with total aged population standing at 83.75 million. The average family size was 3.63 persons.

Household income increased steadily and the living standards continued to improve. The annual per capita disposable income of urban households was 5,425 yuan in 1998, a real increase of 5.8 percent if prices change was taken into consideration. The per capita net income of rural households was 2,160 yuan, a real growth of 4.3 percent. A total of 400 million square meters of new residential buildings were completed in urban areas, and 810 million square meters of new houses were built in rural areas in 1998.

Social security system registered rapid development. By the end of the year, about 99 percent of the laid-off staff and workers of state-owned enterprises entered the re-employment service center. Some 85.05 million staff and workers participated in the basic retirement security program, 27.35 million retired pensioners participated in the general social pension management system, 15.9 million staff and workers participated in the general health care program for major diseases, and 1.52 million retired pensioners participated in general health care program.

Social welfare work continued to develop. There were 1.06 million beds in social welfare institutions of various types in China in 1998, with 800,000 inmates. The community service network continued to expand in urban areas, with 160,000 community service facilities established, including 6,629 community service centers. Minimum life guarantee system had been established in over 600 cities and 1,242 counties, from which 3.32 million people received minimum life guarantee relief. Some 72.08 million people in need received relief funds of various forms from the state. About 4.53 million people were given special pensions and subsidies by the state. Life and employment of ex-servicemen were arranged properly. In 1998, 5.14 billion yuan worth of social-welfare lottery tickets were issued, raising 1.54 billion yuan worth of funds, and donations from the society reached 12.2 billion yuan.

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Notes:

1) All figures in the Communiqué are preliminary statistics.

2) Statistics in the Communiqué do not include figures for Hong Kong SAR, which will be released by the government of Hong Kong SAR.

3) Statistics in the Communiqué do not include figures of Taiwan Province and Macao.

4) Figures in value terms on gross domestic product and value-added of various sectors quoted in the Communiqué are at current prices, whereas growth rates are calculated at comparable prices.

5) For the newly-increased annual production capacity through capital construction projects, figures with regard to the extraction of oil and natural gas, urban telephone switchboards, long distance optical-fiber cables and newly constructed microwave digital telecommunication lines include the capacity built through technical updating and transformation projects and through other investments.

Annex 1: Major Agricultural and Industrial Products, 1998

* Standard fuel equivalent
** 100 percent effective content

Annex 2: Change of Market Prices