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China: Other Important Sectors
Country Study > Chapter 5 > Economic Context > Structure and Operation of the Economy > Other Important Sectors


Transportation, the postal system, and telecommunications employed over 12 million people in 1985. Long-distance transportation was carried primarily by railroads, inland waterways, and highways. The government-run railroad network was the backbone of the freight system, and rail lines extended to nearly all parts of China. In most areas, however, the rail system had too few feeder lines and was inadequately integrated. Much of the rail system had been improved in the 1980s; many heavily used stretches were converted to double track or upgraded, and several key new lines were constructed to relieve congested areas. Most locomotives in use in the early 1980s were picturesque but outdated steam engines. By 1987, however, several railroad districts had converted entirely to more modern and efficient diesel or electric locomotives, and domestic production of modern engines was supplemented by imported models. Within their limitations the railroads functioned fairly efficiently and made intensive use of the rail network. In 1986 the railroads carried 874.5 billion ton-kilometers of freight, 45 percent of the national freight total and a 7.8 percent increase over 1985. They also carried nearly 1.1 billion passengers, 20 percent of the national total. Despite reasonably good performance, the ability of the economy to move goods between cities and regions was severely limited by deficiencies in the system, and improvement of the railroads continued to be a high priority for state investment.

Inland navigation grew more quickly than the rail system and in 1986 carried 827.8 billion ton-kilometers of freight, nearly as much as the railroads. The principal inland waterway was the Chang Jiang and its tributaries, which constituted the major artery linking the industrial and agricultural areas of central China and the southwest to the great port and industrial center of Shanghai. Improvements to the water routes enabled larger and faster modern vessels to use them, extended their navigable length, and reduced the amount of time they were closed each year. In addition to modern vessels, the lakes, rivers, and canals were plied by thousands of motorized and nonmotorized traditional craft of all sizes.

Local road networks were extensive, but many were narrow and unpaved, and all were overcrowded with trucks, jeeps, buses, carts pulled by tractors and animals, bicycles, pedestrians, and grain laid out to dry by local farmers. Owing to rapid increases in the volume of private and work-unit trucking, highway freight traffic was the fastest growing major portion of the transportation system aside from ocean shipping. In 1986 highway freight traffic totaled 259.6 billion ton-kilometers, an increase of 47 percent over 1985, and 80 percent of the volume was carried by vehicles that were not managed by state highway departments. In 1986 buses served 4.3 billion passengers for relatively short trips.

Civil aviation provided important links both to isolated areas of the country and to foreign nations. It carried, however, only a small fraction of total freight and passenger traffic.

The service sector expanded quickly during the reform period, making up for major deficiencies that had developed in the preceding quarter century. In the 1950s and 1960s, services were regarded as nonproductive and were therefore neglected. During the Cultural Revolution, they were relentlessly attacked as "remnants of capitalism." By the late 1970s, the service trades, such as food service, barbering, laundering, tailoring, and repair work, were seriously understaffed and were far from able to meet the needs of the population. Furthermore, they were all concentrated in large, inefficient state-owned units. The service occupations requiring advanced training, such as health care, education, and legal services, were decimated by the breakdown of the education system during the Cultural Revolution decade.

Revival of the service sector was a well-publicized goal of the reform program. Legalization of private and collective enterprise quickly led to the appearance of tinkers, cobblers, tailors, barbers, and small food-service stands, particularly in the free markets. Between 1978 and 1985, the number of people engaged in the service trades, retail sales, and catering grew from only 6.1 million to over 25 million, of whom 21 million were in collective or individual enterprises. In 1986 the government further stimulated the growth of the sector by leasing to private individuals or groups a large number of small, state-owned, service establishments, including restaurants, repair shops, and barber shops, that had consistently been operating at a loss under state management.

Other service sectors that employed significant quantities of labor included health care, education and culture, and government administration. These sectors were important to the national economy and employed over 25 million people.

China produced nearly all of its own medicines and medical equipment, but most hospitals were poorly equipped by Western standards. A more serious shortage was the relatively small number of doctors and other highly trained medical personnel. In 1985 some 4.3 million people worked in health-care institutions. Of these, 1.4 million were doctors -- including 336,000 doctors of traditional (rather than Western) medicine, 637,000 were nurses, and 1.4 million were midwives, laboratory technicians, pharmacists, and other technical personnel. The number of doctors of Western medicine grew by over 35 percent between 1978 and 1985, and renewed contact with the West opened training opportunities in Europe, the United States, and Japan.

Only a little over 10 percent of all Chinese received free medical care. Free care was provided to government workers, military personnel, teachers, college students, and workers in state-owned enterprises. A portion of the medical expenses incurred by their dependent family members was covered by the work units. Most rural towns and villages operated voluntary cooperative medical systems.

Educational and cultural institutions employed 12.7 million people in 1985. This total included 871,000 teachers and staff in institutions of higher education, an increase of 68 percent over the number in 1978, reflecting the intensive reconstruction of the education system in the 1980s. There were nearly 8 million people working in government administration in 1985.

Data as of July 1987

Last Updated: July 1987

Editor's Note: Country Studies included here were published between 1988 and 1998. The Country study for China was first published in 1987. Where available, the data has been updated through 2008. The date at the bottom of each section will indicate the time period of the data. Information on some countries may no longer be up to date. See the "Research Completed" date at the beginning of each study on the Title Page or the "Data as of" date at the end of each section of text. This information is included due to its comprehensiveness and for historical purposes.

Note that current information from the CIA World Factbook, U.S. Department of State Background Notes, Australia's Department of Foreign Affairs and Trade Country Briefs, the UK's Foreign and Commonwealth Office's Country Profiles, and the World Bank can be found on

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