Beijing Rising
China remains primarily a nation of farmers, and the transition to an industrial free market is much like the traffic on Highway 204-unpredictable. Few state-owned firms have been sold, and most are laggard behemoths. Growth is driven by new joint ventures, collectives and private busines-ses, which now account for more than 50% of China^’s industrial production.
For China^’s newly-rising enterprises, profits are up throughout the region-thanks largely to low wages. Last year the BeiBei company in Zhangjiagang cleared $14 million on exports of 10 mil- lion pairs of shoes to U.S. department stores. Typically, Chinese workers in a plant like this make about 34 cents an hour, compared with $3.50 for Korean workers, according to South Korean esti- mates. That gives China a huge competitive advantage.
Last fall Beijing agreed to open its markets to more U.S. goods, including everything from Polaroid film to automobiles. In return, Washington would support China^’s membership in General Agreement on Tariff and Trade. Membership in this club, which includes all the world's leading economies, could provide a huge boost for low-wage export economy. Last year China^’s trade surplus surged, buoyed by exports of toys, textiles and consumer electronics. "The trade surplus it- self will be the No.1 problem this year," says one Chinese officials. "After Japan, we^’ll be first in line for retalintion."At the same time, Americans has an increasingly large stake in good relations with China.
Non-state owned businesses contribute more than 50% of the economic growth.