oil has very low sulfur content, matching, in this respect, the highly prized Algerian and Nigerian crudes; Sheng-li crude, though more sulfurous, is still "sweeter" than are typical Saudi Arabian and Iranian oils.

However, high paraffinic content of the Chinese oils as much as 22.4 percent by weight for Ta-ch'ing crude-results in very high viscosities and unusually high pour points; among the world's important export oil streams only Indonesian Minas crude has comparably undesirable characteristics which complicate all forms of transportation and storage. Product yield of the Chinese crudes is also unfavorable: during straight distillation lighter fractions (final cut up to 650° F) amount to 30.1 percent in Ta-ch'ing oil, while they are, respectively, 43.6 and 52.3 for Saudi Arabian heavy and light oils and 50.1 and 52.7 for their Iranian counterparts ("Guide to World Crudes 1", The Oil and Gas Journal, Vol. 74, No. 13 (29 March 1976), pp. 98-122). More sophisticated cracking systems are thus necessary to refine the large volume of residue (68 percent for Ta-ch'ing crude, including nearly 29 percent of asphalt, and 77.1 percent for Sheng-li oil).

TABLE F-1.-CHARACTERISTICS OF TA-CH'ING AND SHENG-LI CRUDES IN COMPARISON WITH MAJOR WORLD OIL EXPORT STREAMS 1

1 "Guide to World Crude Oil Export Streams," Oil & Gas Journal, vol. 74, No. 13 (Mar. 29, 1976), special fold-out chart; Meyerhoff and Willums, op. cit., p. 180.

According to the World Bank, China's average annual real economic growth at just over 5 percent during 1970-75 was even larger than that of Japan; and Chinese resources played a significant role in this growth. The country is clearly thinking about expanding international trade, judging from the $20 billion deal signed with Japan in February 1978 which has an important component of exporting Chinese fuels for Japanese industrial plants and know-how. China was also starting to expand trade with Western Europe along similar lines. However, Chinese trade with the United States, after a brief flourish in 1975, was still relatively small as of early 1978.

Mineral developments in the People's Republic of China (PRC), especially in petroleum and steel, have been increasingly in the news. Oil and gas have great potential, and a very large coal industry similar in magnitude to those of the United States and the Soviet Union is already in existence. The steel industry ranks about fifth or sixth in the world, and additional integrated facilities capable of producing 12 to 15 million metric tons per year (mtpy) are planned to be built in the next few years with Japanese assistance. The PRC is also prominent in fertilizers, cement, and salt. Its strategic "export metals" tungsten, antimony, and tin are very well known in United States and world markets. Thirteen large fertilizer plants built with foreign technology were either completed by early 1978 or nearing completion. The country was buying heavily in nonferrous metals a few years back and to meet sharply growing needs, probably will be turning in part to developing local primary production or building smelter-refineries with

international know-how. There have also been many recent reports about major mineral discoveries and development of new mines and oil and gasfields.

The subject of mineral economics covers a wide spectrum of resource and industrial activity, from geology and exploration to mineral rights of land and sea, mining, metallurgy, and mineral processing, and in terms of not only production but also consumption, supply, transport, and development policies. For example, the steel and cement industries would operate not only the steelworks and manufacturing plants and often also enterprises producing iron ore, limestone, shale, refractories, and other metals and nonmetallics as well. Even nuclear and space activities are related not only to technical sophistication but also to raw materials like radioactive minerals and rare earths and metals. Moreover, consumption and trade of mineral, metal, and fuel products may have important economic and strategic implications.

For most countries with relatively high levels of economic activity, output of minerals and fuels may be only 1 to 5 percent of the GNP whereas production of finished mineral and metal products when including value added would be closer to 10 to 20 percent of the GNP. China is no exception. The Chinese, in realizing that resources and their availability are fundamental to industrialization and perhaps also to trade, have placed great emphasis in this general area. It is therefore pertinent to examine the many factors affecting China's mineral enterprise, such as the extent of geological knowledge, the world significance of its resources, human and natural factors influencing development and production, economic geography and transport, implications of international trade, and efforts to acquire technologies from advanced countries.

With no firsthand information and little in the way of literature reviews, it is difficult to determine specific activity levels for China. This is understandable, in view of the general record of centrallycontrolled economies. However, because many PRC minerals are significant by world standards, considerable fragmentary data and evaluations are available through commercial circles, technical journals, international trade publications, Japanese sources, visitors, analysts, government sources, general literature, and the press of the PRC itself. Photographs from PRC newspapers and periodicals and foreign visitors also reveal interesting technical and commercial information. The situation becomes more apparent when appraised by long-time observers of Chinese mineral developments who have a strong earth science background. An attempt has been made here to tell the mineral story of China in the best way possible. Accuracy of estimates vary with the individual industry, depending upon how much the subject has been officially reported surveyed, or studied. Nonetheless, the magnitude of production levels seem clear and accuracy should improve in the years ahead.

Actual reporting of national output by the PRC has been rare indeed. Oil figures have been given intermittently for nearly two decades, but not during politically-troubled years and very recently. Some steel figures were mentioned a few years back. Informally, the Chinese have given out some overall oil, coal, and steel statistics for 1976 and 1977, although the information surely needs to be confirmed. Of late, the Chinese have reported a little more on individual mines, facilities, enterprises, and provinces for the basic mineral industries.

Better knowledge of major components of such industries provide a strong basis for making reasonable estimates. For example, principal facilities of China's leading steelworks are fairly well known, especially Anshan, Peking, and Wuhan. Most of the large coal combines producing 5 to 25 million tpy can be enumerated; and estimates can also be made for the medium-sized mines and the small mine sector. The majority of the large cement plants are also known, and the Chinese say that their small cement plant sector provides just over half of the national output. Actual production data for specific oilfields have never been reported. Adding up individual enterprises or provinces is a much better methodology for making estimates than purely relying on percentage changes which can be quite erroneous. All the lesser mineral industries are surrounded in secrecy quantitatively, particularly the nonferrous metals which the Chinese call "colored metals." Nonetheless, even in these areas, much more is known through the eyes of the expert who looks into the background of the industries, keeps close touch with the trade circles, and consults foreign literature and visitors.

For those who wish to pursue the subject of Chinese minerals further, it is believed that a book by the author entitled "Mineral Resources and Basic Industries of the People's Republic of China" (Westview Press, Boulder, Colo., 1977) and an article on China's mineral industries by the author in the forthcoming 1978 Annual Review Issue of the London Mining Journal might prove to be rather useful. Overall studies of this subject are rare, because of the lack of dependable specific data. For example, a recent "microfiche" book on "Mineral Resources of China" by A. B. Ikonnikov published by the Geological Society of America does not have much data beyond the early 1960's. A number of books and many reports have been written on Chinese oil and energy, but most of these have not been authoritative on individual fields and operations. Oil developments are certainly occurring fairly rapidly, particularly with regard to new areas, facilities, and marketing arrangements. Oil journals in the United States, Europe, and Japan (particularly Japan Petroleum and Energy Weekly) give a good running account of happenings. The British Colliery Guardian and the U.S. publication World Coal keep up pretty well on the Chinese coal situation. The Japan Metal Bulletin published three times weekly in Tokyo has much news on the China scene, particularly on the progress of the Chinese metallurgical industry and Sino-Japanese mineral trade. The Metals Week by McGraw Hill often has data on China's metal trade and developments. The British Sulphur Corp. covers the Chinese fertilizer situation very well. A few United States studies on the Chinese steel industry are getting out of date, since this industry is expected to forge ahead rapidly in the next decade. Takungpao and secondarily the Jen-Min Jih-Pao are among the best Chinese sources of information on up-to-date developments. Many individuals in the United States and abroad know specific aspects of the Chinese mineral economy and these people, along with knowledgeable representatives of the trade circles and industry, should be consulted in any comprehensive evaluations. The National Foreign Assessment Center of the U.S. Government has issued various useful reports on individual sectors of the Chinese mineral economy.

INTRODUCTION 1, 2, 3

A remarkable industrial renaissance is underway in the People's Republic of China (PRC). All indications are that this industrial progress will continue and possible accelerate. The long history of mining and metallurgy in China and the extensive resources have been significant factors in bringing the PRC prominence not only in industrialization but in world affairs as well.

Development of the rich mineral resources, a matter of top priority since the establishment of the People's Republic of China, has been basic toward achieving the twin and interrelated objectives of furthering agriculture and advancing industry. An industrious and disciplined population has been successfully mobilized to work the land efficiently, harness the waters, uncover and extract the resources, and produce the necessary goods and services. Much more can be accomplished, but there is no question that the Chinese are already enjoying improved living standards.

"Walking on two legs" has been a fundamental policy to simultaneously develop both large and small industries, which creates localized economic strength, cuts down on transportation requirements, and enables industry to better serve agriculture. The Chinese know that small-scale operations can also be worked efficiently. Since 1971, a new factor has entered Chinese industrial planning, which is the concept of dispersing industry for strategic reasons.

China's total gross national product (GNP) has reached the respectable level of over $320 billion in 1977, placing the PRC solidly within the first 10 by world standards. Per capita GNP in the PRC is not precisely comparable with the GNP in Western nations. Because the Chinese yuan (Ren Min Bi, or RMB, valued at about $0.60) goes further in China than Western currencies elsewhere owing to lower food, lodging, and transportation expenses, the country's economic strength is really greater than indicated. PRC's GNP has been growing at an annual rate of up to 10 percent in recent years, although much less in 1976 when both Mao Tse-Tung and Chou En-Lai passed from the political scene.1

During the Fourth National People's Congress held in the second half of January 1975, PRC's twin long-term development goals were stated as follows: (1) Before 1980, China should have established a relatively independent and integrated industrial system, and (2) before the end of this century, China should become a totally up-todate modern power.

On February 26, 1978, Chairman Hua Kuo-Feng unveiled an 8year economic program that calls for the development of 120 largescale projects, including 10 iron and steel complexes, 9 nonferrous metal complexes, 8 coal combines, 10 oil and gas fields, 30 power stations, 6 new trunk railways, and 5 key harbors aimed at "changing the backward state of our basic industries." 5

1 See Wang, K. P., "Mineral Resources and Basic Industries of the People's Republic of China," West View Press, Boulder, Colo., May 1977, 211 pp.

2 See Wang, K. P., "Mineral Industries of the People's Republic of China." U.S. Bureau of Mines. Mineral Perspectives MP-3. 1977, 8 pp.

See Wang, K. P., "The People's Republic of China-A New Industrial Power With a Strong Mineral Base." U.S. Bureau of Mines. 1975, 96 pp.

See Far Eastern Economic Review (Hong Kong). Asia 1978 Yearbook, p. 159-169.

Asia Wall Street Journal (Hong Kong). March 7, 1978, p. 1 and p. 6.