ACCESSION NUMBER:236672 FILE ID:EC-105 DATE:07/27/92 TITLE:CIA SAYS CHINA'S EXPORT DRIVE LIKELY TO CONTINUE (07/27/92) TEXT:*92072705.ECO EPCHINLD TRADE GEN /et CIA SAYS CHINA'S EXPORT DRIVE LIKELY TO CONTINUE (Sees effort to speed market reforms) (420) By Jim Shevis USIA Staff Writer Washington -- The U.S. Central Intelligence Agency (CIA) says China's economic reforms will likely result in greater exports from that country, increasing its trade imbalance with key trading partners, particularly the United States. In its annual assessment of China's economy, the CIA said that Chinese leader Deng Xiaoping apparently is trying to speed up the country's market-oriented reform program. "The political stakes are rising in Beijing," Deputy Director Martin Petersen of the CIA's office of East Asian analysis told the congressional Joint Economic Committee's subcommittee on technology and national security July 27. The 14th Communist party congress convenes this fall, and the 88-year-old Deng would like a long-term commitment to continue the reform program, Petersen said. "This may be the last opportunity for China's elderly leaders to put their imprints on China's future," Petersen said. The congresses are generally held every five years. Senator Jeff Bingaman, the subcommittee's chairman, said that the CIA report and reports from other sources "suggest that China will continue to pursue an export-led growth strategy while restricting imports." In the first five months of 1992, the CIA said, U.S. imports from China grew at a 41-percent annual rate -- three times faster than the growth of U.S. 1xports to China. The agency said that the U.S. trade deficit with China this year likely will exceed $1,500 million, up from $1,270 million in 1991. The trade deficit is a factor in debate over renewal of China's most-favored-nation (MFN) trading status with the United States. The U.S. House of Representatives has voted to block MFN status for China, and to attach conditions to its renewal in 1993. The Senate is expected to take up the issue soon. "Part of the reason China's exports are growing so rapidly is because Chinese and U.S. traders are accelerating deliveries as a hedge against China losing MFN status or being hit with trade sanctions," the CIA said. Petersen said that Deng's reform measures face "significant opposition" and risk overheating the economy. "Deng's reform push is encountering significant opposition from central officials and bureaucracies with a large stake in the old system," he said. China began its economic reform effort in the late 1970s to deal with the disastrous legacies of the Mao-inspired "Cultural Revolution". NNNN .