From: xu@hydra.maths.unsw.oz.au ()
Subject: CND-Global, December 30, 1992
Organization: school of Mathematics UNSW
Distribution: aus
Date: Sat, 2 Jan 1993 01:16:39 GMT


               * * *  C h i n a   N e w s   D i g e s t  * * *

                                (News Global)

                          Wednesday, December 30, 1992


Table of Contents                                                 # of Lines
============================================================================
1. News Brief (6 Items) ................................................. 58
2. Thirty Major Research Projects in "Climbing Program" ................. 48
3. Privatisation And Dismissed Workers ................................. 147
============================================================================

----------------------------------------------------------------------------
1. News Brief (6 Items) ................................................. 58
----------------------------------------------------------------------------
[AP and UPI, 12/28/1992] -- Workers leveling a hill in China triggered an
earthquake after detonating dynamite with almost as much force as the atomic
bomb dropped on Hiroshima. The 12,000 tons of explosive rocked the earth
with an impact measuring 3.4 on the Richter scale, said Stephen Chang of
Hong Kong's Royal observatory. There were no reports of damage or injuries
from the man-made quake, which sent tremors as far away as Hong Kong and in
Macao. The dynamite leveled Potai Mountain in Zhuhai, to expand the area of
a local airport from one-third square mile to one square mile and create
rubble for construction of an expanded facility, Xinhua reported. 14 million
cubic yards of earth and stones were moved in the explosion. (Forwarded by:
Zhao Hua, a CND reader, and Wenfeng)
                                ___ ___ ___

[JAPAN ECONOMIC NEWSWIRE, 12/29/1992] HONG KONG -- China has decided to bar
French companies from a project to build a subway system in Guangzhou in
retaliation, Wen Wei Po said Tuesday. The daily quoted Guangzhou Mayor Li
Ziliu as saying the city authorities were ordered to scrap a plan to pur-
chase French subway cars and to use French loans to partially finance the
project in the province of Guangdong.

Li told the paper the decision to reject collaboration with the French
government and businesses would not undercut the project, as companies from
more than 30 other countries have indicated they will bid on the lucrative
project. Construction of the 18-kilometer subway system is to begin in
1993 and is expected to complete by the end of 1998. (FWD by: Liu Jian)
                                ___ ___ ___

[China Radio International, 12/29/1992] -- China expects to set up over
12000 high-tech enterprises by the end of this century. An official with
the State Commission on Science and Technology revealed that China's high-
tech industry will focus on the fields of new materials, bio-technology,
integration of machinery and electronics, energy and environmental-
protection technologies. (See also item #2 of this pack.)

The industrial output value of 120 new high-tech development zones nation-
wide is expected to reach 15 billion Yuan or 2.5 billion US dollars before
the end of this year. (FWD by: A. Waldie <awaldie@web.apc.org>)
                                ___ ___ ___

[UPI 12/28 and C.R.I., 12/29/1992] -- Officials with the China National Coal
Corporation said that interest-free loans from the central government will
provide compensation of around 10,000 Yuan or nearly $1700 per each laid-off
worker ($344 million in total) for them get new jobs. (FWD by: Wenfeng and
A. Waldie)
                                ___ ___ ___

[AP, 12/28/1992] -- Diving star Gao Min has auctioned off one of her World
Championship gold medals to raise money for Beijing's bid for the 2000
Olympic Games and to set up a diving foundation. The China Minting Corp.
bought the medal for $134,380, the China Youth Daily and the Guangming Daily
said. The reports did not say what the firm planned to do with the medal,
which Gao won for the springboard at the 1991 World Championship.

Previous reports said it was Gao's most treasured medal because she won it
under difficult conditions. The 22-year-old diver, who has been unbeaten on
the springboard at major world competitions since 1986, has been plagued by
injuries in recent years and retired after this year's Olympics at Bar-
celona, Spain. (FWD by: Zhao Hua)
                                ___ ___ ___

[C.R.I., 12/29/1992] -- Students who have returned from their overseas stu-
dies now have access to tax-free cars. Returnees begin to enjoy the privi-
lege on Monday with a choice of 12 major domestically-made brand names.
(Forwarded by: A. Waldie)

----------------------------------------------------------------------------
2. Thirty Major Research Projects in "Climbing Program" ................. 48
----------------------------------------------------------------------------
Forwarded by: Zuofeng Li
By: David Kahaner <kahaner@cs.titech.ac.jp>, 12/28/1992

Recently, the State Science and Technology Commission launched a "Climbing
Program" to revitalize and promote continuous progress of China's basic
research. Thirty major research projects have been chosen based on the fol-
lowing four criteria:

(1) The projects must be leading-edge and capable of achieving breakthroughs
by the end of this century;

(2) The projects must be urgently needed and having significant economic
applications and are able to achieve significant science and technology
results;

(3) The projects must be able to fully utilize China's geological condi-
tions, resources, and research capacity; and

(4) Those projects which have already reached world advanced level and are
expected to attain significant progress in the near future.

The 30 major research projects are:

1. High-temperature superconductivity
2. Theory and methodology of large-scale computing science and technology
3. Semi-conductor super-lattice physics and materials, and new device
   structure
4. Non-linear science
5. Machine certification and application
6. Nanometer material science
7. Cutting-edge projects in theoretical physics in 1990's
8. Multiwavelength observation and severe celestial movement
9. Important chemistry process of life
10. Molecular technology of function system
11. Basic physics of high molecules in coacervation state
12. Atoms and molecules in excitation state and state-state reaction kinetcs
13. Rare earth science
14. Dominant strains of grain and cotton oil-producing male-sterile hybrids
15. Optimal nodule-formation and nitrogen-fixation control model of
      symbiosis-nitrogen fixation system
16. Network of passage systems (circulation system and nervous system)
17. Newly synthesized peptide chain and protein folding
18. Molecular biology of cardiovascular diseases and tumor pathogenesis
19. Physiology of important high-yield, disease-resistant crops
20. Brain function on cellular and molecular basis
21. Structure, function, molecular design and manufacture process of photo-
      electrical function materials
22. Femtosecond laser technology and superspeed process
23. Major problems of cognition science
24. Deep submicron-structure apparatus and interobservational physics
25. Coal and oil high-efficiency and low-pollution burning process
26. Climate kinetics and weather forecast theory
27. Forecast and strategy study on trends in living environment in the next
      20-50 years
28. Crustal movement and kinetics of earth
29. Formation, evolution, change of environment, and ecosystem of Qinghai-
      Xizang plateau
30. Basic research related to exploring large-scale mineral deposits

----------------------------------------------------------------------------
3. Privatisation And Dismissed Workers ................................. 147
----------------------------------------------------------------------------
Forwarded by: <mte152s@vaxc.cc.monash.edu.au> on soc.culture.china, 12/22/92
Source: The Economist, 11/28/1992

[Editor's notes: This is the 4th article in a CHINA survey (8 total) in THE
ECONOMIST 11/28/1992 issue. The top article "The Titan Stirs - the Chinese
Economy" has been carried in CND-Canada, CND-EP, and CND-US's Year-End
Special news broadcast. The original title of this article is "The
Commanding Heights."]

The Wuhan Iron and Steel Company, 1,000km inland from Shanghai on the banks
of the Yangzi River, is anyone's worst nightmare of a communist industrial
firm. Its 120,000 employees produce 4.6m tons of iron and steel a year, mak-
ing it China's second-biggest metallurgy company. To reach the blast fur-
naces, you drive for miles through the acrid air of the company's "planta-
tion": a city of 300,000 people who depend on the company not simply for a
wage but for their housing (the plantation contains 2.4m square metres of
residential space), their education (47 schools) and their health care (a
2,000 bed hospital).

The firm claims, vaguely, to be profitable. This seems improbable, since 80%
of its output is sold at government-fixed prices and the company sells only
2% of its output itself. Suppose it were thrown entirely on the mercies of
the market. If profitability became its main aim, how could the firm possi-
bly sack enough people, depriving whole families not just of wages but of
housing and schooling as well?

That is the Russian face of Chinese state industry, the one that makes
reform seem impossible or at least (as in Russia) impossibly cruel. There is
another face, also in Wuhan, not too far away. It is a textile company
called Wuhan Cityford Dyeing & Printing. Formally, this is a joint venture
with a foreign partner. In fact, it is a Hong Kong firm's takeover of a
state-owned company called Wuhan No. 2 Dyeing & Printing Factory.

The Hong Kong partner, which took over last June, agreed to absorb into the
new venture only about a third of the workers from the old company. These
are each paid around 320 Yuan ($58) a month, a little less than three times
their wage at old No 2. Performance-related bonuses will come later; fines
for negligent work have come already. The firm's administrative depart-
ments have been cut from 35 to three. Most of No 2's output was sold in
China; 70% of the new firm's output is destined for abroad. Using mostly the
1960s Japanese equipment of the old firm (though that is slowly being sup-
plemented by 1970s-vintage Hong Kong machines), one-third of the old work-
force is already producing more, of better quality, on a third fewer produc-
tion lines. The old firm apparently lost money. The new one began turning a
profit -- as it knows it has, since it has Hong Kong accountants and their
systems -- in four months.

The dismissed workers? Several hundred got jobs in service businesses --
like catering, shops and guesthouses -- affiliated with the new company. The
Wuhan city government, keen to bid foreign investment away from the coastal
provinces has given tax breaks to these service outfits to make them profit-
able. Another several hundred workers have been sent home (their old firm's
housing has not been taken away from them), on hand-outs from the city
government equal to two-thirds of their old wage.

- TWO PATHS TO REFORM

The theory of why state-owned firms in communist countries are so bad is best
described by Janos Kornai, a Hungarian-born economist at Harvard. Communist
firms are geared towards the bureaucrats who give them orders rather than
the customers who buy from them, towards output rather than profit, towards
the social welfare of the their employees rather than efficiency. Market
signals become even more muffled because the "soft budget constraint" given
to a firm by the state banking systems ensures that loss-makers, no matter
how hopeless, continue to be financed so that jobs are not jeopardised.
Lacking profitability as a guide to the right level of capital and output,
firms feel an insatiable "investment hunger".

In broad terms, China's state firms bear out the theory. During the refor-
mist decade of 1980s, the losses of state-owned firms rose. In 1991, a year
of recovery for the Chinese economy, their losses grew by more than a fifth,
to 55 billion; the government paid state firms subsidies amounting to 14% of
government revenue. Unbelievably, this understates the problem. Last summer a
senior official admitted that the share of loss-makers among state enter-
prises was in fact twice the acknowledged figure of one-third. Losses are
disguised by accounting methods that put too high a value on stocks (inven-
tories), which are so unsaleable that they have actually risen in this year
of booming consumer demand. Another prop of unknown size is provided by the
state-owned banks, which are compelled by the government to make soft loans
to state firms. One survey of 400 state-owned companies found that more
than half had had trouble servicing their bank loans.

The managerial reforms that the government has dabbled in since the mid-
1980s have had no apparent impact. One example: China has had a bankruptcy
law since 1986, but it still has almost no bankrupts. The pessimism of visi-
tors to China like Jeffrey Sachs, a "big-bang" proponent from Harvard (and
adviser to the Polish and Russian governments), who has said that without
wholesale privatisation the Chinese economy will grind to a halt, seems
well-founded.

Yet, as the two tales from Wuhan suggest, there is a wide variation among
state firms in terms of size, political sensitivity and competitive fitness;
the conditions for a successful piecemeal reform of state enterprises are
not as bleak as they seem. For one thing, the losses are concentrated in
certain industries and regions whose special circumstances make a systematic
breakdown of state industry seem implausible. Thomas Rawski, an economist at
the University of Pittsurgh, found that of the 23 billion yuan that state
industries lost in 1989, almost 40% was accounted for by coal and oil com-
panies. They lose money for a simple reason: the government orders them to
sell their output well below cost (the state-fixed price for coal last year
was less than a third of the market price). Another quarter of the losses
came from two provinces, Jiangsu and Zhejiang, which are among the most
dynamic in China; profitablity of all business, not just state-owned ones,
is low there because of competition is so stiff. Another 11% of the losses
were in the defence industry.

An earlier article mentioned that the productivity of state firms, though
lower than that of non-state firms, started growing after the reforms began
in 1978 and has been accelerating as the reforms have deepened. If the effi-
ciency of the state firms is improving, it may be because their incentives
are changing. It was typical of East European and Russian firms that
incresed profits meant no increase in retained earnings (and sometimes even
a decline): if there were more profits, the government simply helped itself
to them.

In 1980 the same thing was true in China. But this changed as the reforms
went along. Two samples of firms examined by Mr Rawski show a strongly
increasing tendency over the 1980s for a rise in profits to lead to a rise
in retained earnings. Workers had a direct interest in this: bonuses
increased nearly in lockstep with retained earnings. But what interest do
state managers have in obeying the market rather than the bureaucrats?
This, recall, is Mr. Perkins' fourth requirement for a functioning market
economy, and the one China is still furthest from meeting.

But perhaps closer than it seems, to judge by the behaviour of 800 state-
owned firms studied by four economists from the University of California at
San Diego. They found that government ministries have begun selecting
managers on commercial rather than political grounds, and are guiding their
performance with rewards and penalties that any western manager would recog-
nize. Top managers at these firms have to sign management contracts that
specify performance target for the firm. Management pay is positively linked
to sales and profits. Managers are often required to post a substantial per-
formance bond, averaging 8,500 yuan, half a year's average manaerial salary.
The threat is not idle: bonds have been forfeited.

Managers are also demoted or fired for poor performance, and in any case
change jobs frequently. Factory workers have jobs for life. Managers at
these firms stayed put for an average of only 5.5 years, a turnover rate of
18%. Most appointments to the top jobs are still made by government min-
isteries, but towards the end of the 1980s the government increasingly began
to auction managerial positions. Bidders are given a look at the firm's
accounts. The bids were judged on how much profit they promised to hand over
to the supervising ministry during the contract, their business plan, how
much they agreed to invest out of retained earnings and so on.

None of this means there is much to cheer about in China's state firms. By
any measure -- productivity, proitability, return on assets -- the state
sector is vastly inferior to the non-state firms. But with the signs that
China's state firms have begun responding to the currents of competition
flowing through the economy, it is possible that a big and painful programme
of privatisation may be unnecessary. Gradual "marketisation", through
changes in incentives, reforms of the banking and welfare systems and take-
overs by non-state and foreign firms, may work. That would have one huge
advantage: some continued state control over state-owned enterprises to
prevent Russian-style "spontaneous privatisation"--looting by managers and
workers of the assets of the firms they work for.

Gradualism also has an encouraging pedigree. Lawrence Lau, an economist at
Stanford, points out that in 1952 around 55% of Taiwan's value-added in
manufacturing, and 90% of industrial assets, were accounted for by state-
owned firms. Today Taiwan's state-owned companies own 20% of industrial
assets and account for 10% of manufactured exports, Taiwan accomplished this
with virtually no privatistion. It simply grew the non-state businesses much
faster. If China can duplicate the feat, it will be thanks to two things: a
unique form of corporate life spawned by rural China, and foreign trade and
investment.

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               * * *  C h i n a   N e w s   D i g e s t  * * *

                                (News Global)

                         H a p p y   N e w   Y e a r!

                          Thursday, December 31, 1992


Table of Contents                                                 # of Lines
============================================================================
1. News Brief (8 Items) ................................................. 75
2. Year End Accounting: Growth at 12%; Inflation Rose 6.2% .............. 28
3. The Maturity of China's Economy to Be Tested ......................... 71
4. Newsfeature: Study Says Math Easier in Chinese ....................... 78
============================================================================

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1. News Brief (8 Items) ................................................. 75
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[AP, 12/29/1992] BEIJING -- The Standing Committee of the NPC approved the
law raising the minimum prison term for hijacking from three years in prison
to five, China Daily said today. The new law, devoted entirely to hijack-
ings, specifies that hijacking planes for non-political motives also is a
crime. The maximum punishment for hijacking is the death penalty, given in
cases where a hijacking causes the death of passengers or severe damage to
aircraft. (Forwarded by: Zhao Hua)
                                ___ ___ ___

[China Radio International, 12/30/1992] -- China will deepen its press and
publications reform to make these institutions suitable to the market econ-
omy. China's top official with the Press and Publications Administration
said that in the coming years publishing houses will be allowed to publish
books upon their own initiative with only certain special ones needing offi-
cial approval. The publishers can decide the books' prices and their own
salaries. Along with the Xinhua bookstore other bookstores will also be
able to deal with wholesale and retail sales. (Andrew Waldie)
                                ___ ___ ___

[UPI, 12/29/1992] BEIJING -- China's Finance minister has warned that the
national budget deficit is again swelling over the government target and
has ordered a year-end campaign to reduce the red ink, Xinhua reported
Wednesday. Liu Zhongli said although an economic boom in 1992 had kindled
hope the government could rein in the deficit, overspending on capital pro-
jects and difficulty collecting revenue has returned the budget to the red.
The Finance Ministry's latest forecast is that 1992 state revenues will
total $67.5 billion compared to $71.5 billion in spending, for a deficit of
just over $4 billion, $403 million over the government's target for the
year. Liu said the government plans a series of tax reform measures next
year "to open up more fund channels for the state treasury." (Zhao Hua)
                                ___ ___ ___

[Izvestia via Radio Moscow, 12/30/92] -- [On relations between China and
North Korea] The first shot was made by Pyongyang [by disclosing that
American POWs of the Korean War were taken to China]... As for the attitude
of the U.S. to the matter, a correspondent for the AP said that despite the
absence of any documents proving the claims of North Korea, American
congressmen have decided to send a group to China to look for the POWs...

Still, one circumstance is worth noting. Pyongyang strictly censors all
public statements by its officials. Now, what is the reason for such an
explosive leak?...In this way Pyongyang demonstrated its dissatisfaction
with Beijing that [it] recently established diplomatic relations with South
Korea and is rapidly building up its economic ties with it. (Andrew Waldie
<awaldie@web.apc.org>) [Editor's Note: For background information, see
previous CND-G packages.]
                                ___ ___ ___

[AP-DJ, 12/30/1992] TAIPEI -- Lee Teng-hui named Chen Li-an Wednesday to
head the Control Yuan in what is seen as the first move in a major reshuf-
fle. Local newspapers have said Lee also will name a younger one to replace
Hau Pei-tsun, the 73-year-old former general, after 161 newly elected legis-
lators take office on Feb. 1 and that a reshuffle will ensue. (Liu Jian)
                                ___ ___ ___

[DPA,12/29/1992] -- China has put into operation its largest wind-powered
electricity plant with a capacity of 24,000 kilowatts, Xinhua reported
Tuesday. The wind power facility, located in Urumqi, is comprised of eight
300-KW generators. Its annual capacity is put at 7 million KWH.

Xinjiang, a windy region of 150,000 square kilometres, has major potential
for tapping wind power, with sufficient winds to assure production of elec-
tricity over 300 days a year, the report said. (Wenfeng)
                                ___ ___ ___

[C.R.I., 12/30/1992] -- Shanghai saw the opening of its first compact disc
company Monday. The United Optical Compact Disc Company Ltd. is a joint
Sino-Swiss venture with an investment of 2.5 million US dollars. The com-
pany will introduce CD production lines from an American company and can
turn out three million compact discs a year. The company will also produce
information and karoke discs. (Andrew Waldie)
                                ___ ___ ___

[UPI, 12/29/1992] SINGAPORE -- A government investment firm, Temasek, will
invest in a $40-million Chinese holiday resort, published reports said Tues-
day. Straits Steamship Land is developing the resort and golf club project
in Kunming in Yunnan, the Business Times reported. Temasek, Straits Steam-
ship and the Kunming city government will jointly develop the project, but
the respective shareholdings have not been disclosed, the paper said. The
project is due for completion within three years.

Silkair air charter service, a subsidiary of Singapore Airlines, which now
provides a service to Kunming, will be part of the project, sources told the
paper. (A CND reader)

----------------------------------------------------------------------------
2. Year End Accounting: Growth at 12%; Inflation Rose 6.2% .............. 28
----------------------------------------------------------------------------
Forwarded by: Liu Jian
Source: DJ and J.E.N., 12/30/92

BEIJING -- China is finishing 1992 with one of the most rapidly expanding
national economies, while much of the rest of the world founders in reces-
sion or slow growth.

Zhang Zhongji, the spokesman for the State Statistical Bureau, said the
gross domestic product for 1992 was projected to reach 2.34 trillion yuan or
$408 billion at current exchange rates, up 12% from 1991 after accounting
for inflation.

Industry grew about 19%, agriculture about 3% and the service sector about
9.4% compared to 1991, Zhang said.

The money supply expanded 30% and bank loans were up 20%, he said. Zhang
downplayed concerns about overheating, and noted that a major factor in 1992
inflation was the deliberate lifting of price controls by the government.

The country's highest inflation rate - 12.5% - was experienced in the
southern city of Canton. Cost of living for the entire country was up
6.2%, Zhang said.

Even if the official statistic is accurate, such rapid growth can mask pro-
found problems.

Japan and the U.S. are China's most important trading partners, and their
growth must expand vigorously in order to keep absorbing large quantitites
of Chinese goods.

Rising inflation, transportation bottlenecks and large losses racked up by
inefficient state-owned companies also pose risks to China's growth pace.

----------------------------------------------------------------------------
3. The Maturity of China's Economy to Be Tested ......................... 71
----------------------------------------------------------------------------
Forwarded by: Wenfeng
Source: IPS, 12/29/1992

For all the excitement over China's growing economy and projections that it
can match the performance of Japan or S. Korea, economists now fear China
may be heading for another drastic swing in the economic pendulum.

While the Western world is in recession, China is registering 10 to 12 per-
cent economic growth. But Zhu Rongji, responsible for the economy, has
warned the investment-led growth of 1992 cannot be sustained at the present
high level and that it must be controlled to combat the scourge of infla-
tion.

"Some people worry whether China's economy is overheating or not and whether
this will then be followed by an overcooling," the influential Guangming
Daily said recently, voicing fears that government anti-inflation measures
by mid-1993 could send China sliding back into a boom-bust cycle.

Economists say a sign of China's maturity as it transforms from a centrally-
planned economy to a controlled market economy will be its ability to keep
the lid on the economy without drastic action.

China is no stranger to cyclical swings from boom to bust as the government
attempts to push for growth, then reign in inefficient state enterprises in
turn.

There have been three severe ups and downs since the economic reforms began
in 1978. The severest followed the runaway inflation of 1988-89, which hit
30 percent following a wave of panic-buying around the country.

The subsequent austerity drive pushed growth from over 11 percent down to
just over four percent within the year. Such drastic action meant many of
the private businesses that started up in a blaze of publicity simply went
to the wall, leaving the population disillusioned with the reform drive.

The cycle is in danger of being repeated as the scramble to lure foreign
investment has made economic growth rather than efficiency paramount.

According to the state statistical bureau's monthly economic situation
report released in late November, the economy is heating up fast although it
has not reached the "Red Light" alert stage.

Economists say evidence of overheating began to emerge in September-October.
But with euphoria over the new reforms still strong, production is surging
ahead -- although in many cases the goods are unsellable because of poor
quality, lack of demand, inadequate marketing or transport bottlenecks.

Observed the official party newspaper the People's Daily: "Some localities
don't pay attention to reality or feasibility, don't research market needs,
don't think about whether or not there is efficiency and blindly compete for
speed."

The government is trying to reassure foreign investors it intends to take
measures to ensure greater efficiency before things get out of hand.

"While proud that the economic reform policies are bearing fruit, Chinese
leaders are keen that continued prosperity should not be wrecked by
mismanagement as in the past," said a Beijing- based Western diplomat.

In July, Beijing had issued a circular to regional governments demanding
tighter controls be placed on bank lending, particularly to unauthorized
construction projects and inefficient state-run enterprises.

Loans from state-run banks in the first six months of 1992 had rocketed to
120 billion yuan ($21 billion) -- double the government target -- reviving
fears of higher inflation and overheating.

State statistical bureau spokesperson Zheng Zhongji said loans should be
restricted only to those enterprises that had demonstrated a high level of
efficiency and produced goods in high demand.

But unlike other boom years, the latest growth has occurred all over China
rather than in just two or three regions, making it more difficult for lim-
ited government action to be effective.

The Beijing-backed Wen Wei Po newspaper published here reported in September
that the senior leadership was worried the central government had lost con-
trol over the development of localities, which were no longer dependent on
central funds to finance expansion plans.

----------------------------------------------------------------------------
4. Newsfeature: Study Says Math Easier in Chinese ....................... 78
----------------------------------------------------------------------------
Forwarded by: A CND Reader
Source: UPI Newsfeature, 12/29/1992

COLUMBIA, Mo. U.S.A. -- Little Johnny can't add as quickly as students in
China because his language has more tongue-tying arithmetic words, a new
study suggests.

And even the slight difference between the pronunciation of the Chinese word
"yi" and its English translation "one" contributes to a math gap that the
study says puts China's elementary school students ahead of those in the
United States.

The study, believed to be the first linking language and math skills, was
part of a three-year collaboration by researchers at the University of Mis-
souri in Columbia and China's national Institute for Educational Science in
Beijing. They've been observing groups of kindergartners and first graders
in each country.

Researchers latched on to the language factor while trying to explain why
Chinese students generally score higher on math achievement tests than their
U.S. counterparts, said David Geary, an MU assistant psychology professor
who headed the study.

"Before they get any instruction, Chinese kids have a head start, not
because they're superior, but just because their language is easier to use"
than English, Geary said. "This might mean that they can master arithmetic
more quickly than Americans."

Most English words for numbers are longer and, thus, take more time to pro-
nounce than the Chinese names. Also, number words above 10 are more arbi-
trary and harder to remember in English than the Chinese base- 10 system.

For example, Geary said, while an American student is pronouncing "seven-
teen" a Chinese student quickly says a two-syllable equivalent of "ten-
seven."

Geary said previous studies have shown that Chinese elementary school stu-
dents, who learn math through a nationwide curriculum system, are more than
3 years ahead of U.S. students in math skills. Until now, Geary said, the
math gap has been attributed to the Chinese emphasis on homework, more
parental pressure and differences in teaching styles. Some researchers have
even suggested that the brains of Chinese people were better at grasping
math.

While the latest study does not discount the influence of "instruction or
intelligence" differences in the two countries, Geary said, it points to a
clear distinction in languages "that gives the Chinese an advantage and
helps them use more sophisticated strategies for problem solving."

By focusing on kindergarten and first-grade students, Geary said, the
researchers sought to show why the math gap appeared even before children
were fully accustomed to and molded by schooling. Researchers tested stu-
dents in each country for their ability to memorize strings of up to nine
digits and solve additional problems with pencils and paper. They also were
asked to describe their adding methods.

Chinese students outperformed the Americans every time. In the memory test,
students were asked to recite a digit string such as "three, seven, nine,
four." Compared to the Americans, the Chinese kindergarten and first-grade
students correctly repeated an average 2.6 more digits and 2.7 more digits,
respectively, "since numbers are easier to pronounce in Chinese than in
English," Geary said.

In the addition test, the study said, beginning Chinese kindergarten stu-
dents solved 13 more problems within two minutes than their American coun-
terparts. Among students finishing first grade, the gap widened to a 39-
problem advantage for the Chinese.

When asked about their addition methods, researchers found that Chinese
students usually used verbal counting and "decomposition" -- breaking down
numbers like 12 into simpler equations like "five and five and two" -- while
American students usually counted with their fingers.

The Americans used "less sophisticated techniques" like finger counting
because the English language makes it harder to memorize numbers, Geary
said.

On the other hand, he said, the Chinese students' "use of this very sophis-
ticated decomposition strategy is more easily induced because of their
language."

Geary said the study will be useful to psychologists, educators and anyone
interested in America's role in a global marketplace.

"The study we've done suggests we really need to put more research into
understanding children's educational development and then build strategies
for teaching them according to how they learn," Geary said. "Given the
importance of basic math skills to worker productivity, any knowledge like
this is useful," he said.

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