ABSTRACT
This chapter focuses on changes in China's external economic relations and foreign trade, in the context of strategies of socialist development and the notion of self-reliance. It is important that these areas of China's economic development and changing strategies are related to broader arena of political struggle. The chapter discusses the foreign investment, foreign trade, technology acquisition and the international financial arrangements which have recently been made. It explores the methods which are being used to create the foreign exchange needed, and the price involved in terms of the political and economic retreats. The state budget is the annual allocation of central government funds to the various state-run sectors of the economy for their running costs and investment purposes. In addition, foreign borrowings have been made, especially to cover investments in capital construction. The level of activity in compensatory trade is relatively high, because foreign businessmen have been less concerned about the legal and contractual problems than in joint ventures.
