Passage 1

China Tries Guiding Foreign InvestmentIn the late 1980s and early 1990s, as China experienced booming annual growth rates of more than 10% and stepped up its move toward a market economy, billions of dollars of foreign investment went mainly into lucrative, short-term property development and fairly basic, low-technology manufacturing plants.But the urban real estate sector has become thoroughly overheated. As a result of Beijing’s greater emphasis on managed investment, foreign investors will now be encouraged to move away from speculative property development and toward selected high-tech and infrastructure projects. Priority areas for investment would include the energy, transportation, telecommunications, biotechnology and environmental technology. Agriculture is also a priority.The total amount of foreign funds flowing into China in 1995 may not decline by much, analysts say, but foreign investors will find themselves asked to adjust their plans to fit China’s next five-year plan of economic reform, which begins in 1996.Apart from channeling the flow of capital, the Chinese authorities are keen to reap benefits that go beyond money. They want more technology transfer, help in improving management at state enterprises and employee training.“The bottleneck now is people, not technology, not capital, not bureaucracy,” said one foreign investor. “That is why we invest in training of thousands of Chinese managers, engineers and skilled workers.”

China’s real estate sector needs more foreign investment.

A popular Japanese political leader has the power to change Japan’s trade policies.

American forest products will be exported to Japan more smoothly.

For most people involved in the production and trading of “soft” or agricultural commodities, this is proving lo be a grim decade. Prices are in many cases at, or near historic lows in real terms as markets struggle to cope with floods of surplus produce. And—with most soothsayers forecasting flat, or still lower, prices —the markets themselves have lost much of their allure. Speculators who profited handsomely from the price volatility of the 1970s have deserted soft commodities for the newer excitement of financial futures or the security and big yields afforded by the equity and money market. It is strange, indeed, to observe that only 10 years have elapsed since many respected forecasters were warning of impending global shortages of basic raw materials and foodstuffs.

Japan plans to spend three years to lessen its import restrictions.

Washington faces obstacles not only from Tokyo’s government offices but also from Japanese traditions.

Agriculture is encouraged by Chinese government for foreign investment.

Analysts prospect that foreign funds flowing into China will decrease in 1995.

Passage 2

Tokyo

American hopes that pressure from the U. S. will force Japan to suddenly dismantle its trade barriers are almost certain to evaporate in disappointment.The fact is that Washington faces an obstacle far more formidable than a few power brokers in Tokyo’s government offices. It must buck centuries-old, deeply ingrained Japanese customs. To move the Japanese government, Washington must move an entire nation.So far, the U. S. has had only limited success despite congressional threats to retaliate. In an April 9 nationwide broadcast, Prime Minister Yasuhiro Nakasone urged the Japanese to buy more imported goods and unveiled a long-awaited three-year plan to ease import restrictions. But his program was far short of what Washington hoped to see.White House Chief of Staff Donald Regan said the Japanese offered “few new or immediate measures,” While the plan did promise fewer curbs on imports of telecommunications gear, medicine and medical equipment, it offered no relief for American forest products—which are among the most contentious trade issues.Nakasone gives every sign of being sincere in his desire to reduce a Japanese surplus in trade with the U. S. that hit 36.8 billion dollars in 1984 and could soon top 50 billion. Yet to rely on any one Japanese political leader, no matter how popular he is at home, to reverse trade policies is to underestimate the culture and traditions that weigh heavily against a breakthrough.

Japan agrees to eliminate its trade barriers under the pressure of the U. S..

Foreign investors went into property development for speculation.

Foreign investors are satisfied with China’s workforce.