The commodity composition of foreign trade in a centrally planned economy, as in a market economy, depends to a great extent on the structure of national output. In general, an agriculture-based economy will export predominantly primary goods and import predominantly industrial goods whereas an industrialized country will export predominantly technology- and capital-intensive goods and import predominantly labor-intensive goods. Nonetheless, a centrally planned economy has a much greater control over the commodity structure of its foreign trade than does a market economy. This is because in a centrally planned economy foreign trade is embodied in the national economic plan that is subject to the manipulation of the planners, whereas in a market economy foreign trade structure is determined primarily by the relatively stable domestic and foreign market conditions. For this reason, the commodity composition of foreign trade in a centrally planned economy is particularly sensitive to changes in the government's economic policies. In the following analysis I will pay special attention to the effects of government policies on the commodity composition of China's foreign trade for the period between 1978 and 1985. Some new developments in 1986 and 1987 are discussed separately in Appendix C.

Economic reforms represented a major change in China's development strategy and had an important impact on the commodity composition of China's foreign trade. In the period before the economic reforms, China's exports of foodstuffs and crude materials were relatively important and accounted for more than 50 percent of the economy's total exports throughout the period between 1970 and 1977.