· Population growth, however, is slowing. It currently averages about 1% annually, but should drop below 1% after 2000. Total population is expected to peak at about 1.45 billion around 2030. About 70% of the population lives in rural areas.

· Population density is highly uneven. Vast desert areas of western China are nearly uninhabited, while areas of eastern China are among the most densely populated in the world. Average population density is about 325 per square mile.

· Industry and commerce constitute the basis of the Chinese economy, but agriculture employs the majority of the labor force.

· About 60% of the labor force is engaged in agriculture and forestry.

· About 25% work in industry and commerce, 5% in construction and mining, 5% in social services, and 5% other areas. Important Chinese industries include textiles, garments, machinery, cement, iron and steel, coal, and oil.

· Women comprise over 40% of the labor force, but this excludes the large number of women engaged in agricultural and household work.

· China has one dominant ethnic group -- Han, with over 90% of the population -- and dozens of others.

· Minority ethnic groups include Zhuang, Manchu, Hui, Miao, Uygur, Yi, Tujia, Mongolian, and Tibetan.

· China is officially atheist, but traditional religions and philosophies of life--including Confucianism, Buddhism, and Taoism-- remain important. About 2-3% of the population is Muslim, 1% Christian.

· Mandarin (northern Chinese) is the principal and official language of China. Local dialects are spoken in the south and southeast. English is not widely spoken.

· In 1996, China's real GDP grew about 8.1% and its GDP per capita (1987 US$) reached $467, up from $436 in 1995. GDP is forecast to grow by about 8% per year through 2005, and 7% annually thereafter through 2015. Note that GDP measured on a purchasing power parity basis may be many times higher, largely due to the inclusion of nonmarket transactions.

· Economic development is proceeding much more rapidly in coastal and urban areas than in the rural hinterland, widening regional economic disparities. In August 1997, the rural unemployment rate approached 35%, compared with less than 8% in urban areas.

· State-owned enterprises dominate China's economy. Reform of inefficient companies is a high priority, but could boost unemployment.

· Industry accounts for nearly half of national output, and service sectors (including commerce, construction, and transport) about one-third.

· Agriculture contributes about 20% of GDP. China is self-sufficient in food, but the loss of arable land (due to erosion and economic development) is a serious concern.

· Economic development is proceeding under China's Ninth 5-Year Plan (1996-2000). Basic principle: "Seize the opportunity, deepen reform, open up wider, promote development, and maintain stability."

· Priorities: Sustain economic growth. Improve living standards and economy's overall quality and efficiency. Establish a socialist market economy. Improve industrial structure and increase its capacity. Promote scientific and technological advances.

· Special emphasis on agriculture and 5 pillar industries: Machinery, electronics, petrochemicals, auto-making, and building.

· At its 15th Party Congress in September 1997, China announced plans to speed up privatization of state-owned enterprises.

· China's major exports are light industrial and textile products, mineral fuels, heavy manufactures, and agricultural goods. Major imports are machinery, steel, chemicals, miscellaneous manufactures, industrial materials, and grain.

· China's chief trading partners are Japan, the United States, the European Union, South Korea, and Taiwan.

· Both imports and exports are increasing. China is seeking membership in the World Trade Organization. To promote trade, China has established duty-free "special economic zones" offering tax, investment, and other incentives to foreign businesses. However, China's currency is not yet completely convertible, and the country retains controls on access to foreign exchange.

· China's international reserves are increasing, but so is its foreign debt. In mid-1997, international reserves (excluding gold) exceeded $120 billion. Foreign debt totaled $127.3 billion in 1996.

· China has attracted $177 billion in foreign investment since the late 1970s, and hopes to attract about $250 billion more over the 1996-2000 period. China's State Statistical Bureau reported $42.35 billion in direct foreign investment in 1996, up 12.2% over 1995 investment. Major investors include Japan, the United States, Singapore, and Taiwan.

· China is a major recipient of aid from international organizations such as the World Bank and Asian Development Bank.

· This deficit widened in the first 7 months of 1997 (to $25.9 billion, compared with $19.5 billion in the first 7 months of 1996). Several monthly deficits have exceeded those with Japan, which is traditionally the largest deficit market for the United States.

· U.S. investment in China totaled $10.7 billion as of the end of 1995 and accounted for about 5% of foreign investment in 1995.

· According to the U.S. Department of Commerce, top commercial prospects for U.S. energy businesses in 1997 include electric power systems, oil field machinery service, mining industry equipment, and pollution control equipment.

·The U.S. Export-Import Bank has agreed to provide $50 million in business loans for energy efficiency and renewable energy. Trade Development Administration and Overseas Private Investment Corporation funding has been suspended since 1989.

· China enjoys Most Favored Nation (MFN) trading status with the United States, renewable annually. · U.S. exports of products with potential military (especially nuclear) applications remain tightly controlled. Concerns over human rights and other issues complicate the annual debate over renewal of China's MFN status.

· China consumes three times as much energy per dollar of gross domestic product (GDP) as the world average, and twice the average for all developing countries.

· China's energy/GDP ratio declined by about 50% since 1980, as economic growth outpaced increases in energy consumption. China's energy consumption should continue to grow less rapidly than GDP through 2015.

· China's per capita energy consumption is low, but rising.

· China consumes only about one-eighth the energy per person as the developed economies of the Organization for Economic Cooperation and Development (OECD), and only about one-fourth as much as Taiwan or South Korea.

· China's per capita energy consumption has grown from less than 18 million Btu in 1980 to about 31 million Btu in 1996. It is projected to reach 58 million Btu by 2015.

· China's inability to keep up with rapidly increasing demand for electricity has dampened industrial and economic growth.

· A consequence of China's rapid economic growth has been severe environmental pollution, including acid rain, thick smog, toxic waste, water pollution, and carbon emissions.

· China accounts for about 13% of world carbon emissions, ranking second behind the United States. Per capita emissions, however, are significantly lower than in the United States (0.7 metric tons/person compared with 5.42 metric tons/person in the United States). China's rapidly growing carbon emissions are expected to account for 19% of the world total by 2015.

· Sulfur dioxide levels in nearly all Chinese cities greatly exceed international standards. Three of China's cities (Shenyang, Beijing, and Xian) are among the world's ten most polluted. This is mostly attributed to the economy's heavy reliance on coal.

· China's Agenda 21 program, developed following the United Nations Conference on Environment and Development held in Rio de Janeiro in June 1992, presents an ambitious plan for dealing with these environmental problems.

· Energy-related features of the plan include increased emphasis on efficiency, renewable power sources (including hydroelectricity), clean coal technology, combined cycle power plants, and nuclear power.