By Rosalie L. Tung (Auth.)

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These enterprises will be allowed to retain a share of the foreign exchange thus earned for expansion of the enterprise's production capacities or for improving workers' welfare (Beijing Review, September 22, 1980, p. 42). The results of these experiments will then be evaluated before a decision is made as to whether changes of this nature should be extended to more enterprises throughout the country. Special Economic Zones In October 1977, Foreign Trade Minister Li Qiang announced China's decision to establish "special economic zones" in certain designated regions in the country to expand China's trade with foreign countries.

As a sector of the country's economy, foreign trade must be subject to a centrally unified plan. To ensure some degree of uniformity in practices, import and export licenses will be used. In addition, exchange controls will be tightened (Beijing Review, Septemer 22, 1980, p. 42). Laws pertaining to the conduct of foreign trade and forms of economic cooperation have already been promulgated or are being drafted. Examples of drafted legislation are the joint venture law (see Appendix 1); the income tax law pertaining to joint ventures (see Appendix 5); the regulations governing the operations of the "special economic zones" (see Appendix 7); interim regulations governing the establishment of resident offices of foreign enterprises (Appendix 11); and the Individual Income Tax Law that affects wage earners making more than 800 yuan per month (given the low wage rate in China, this law will only affect foreigners residing in China and workers employed in joint-venture enterprises; see Appendix 6).

Before these could be put into operation, however, China needs the technology and equipment to explore and develop these vast reserves of energy resources. The United States could provide assistance in terms of energy exploration and development. Besides energy, the two countries appear to complement each other in terms of agricultural needs. As pointed out previously, 80 percent of China's population is still agricultural. One of the goals of the Four Modernizations is to advance development in the agricultural sector so as to produce sufficient food to feed its 975 million people.

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