Agricultural output doubled in the 1980s, and industry also posted major gains, especially in coastal areas near Hong Kong and opposite Taiwan, where foreign investment helped spur output of both domestic and export goods. Beijing thus has periodically backtracked, retightening central controls at intervals. In 1995-99 inflation dropped sharply, reflecting tighter monetary policies and stronger measures to control food prices. Popular resistance, changes in central policy, and loss of authority by rural cadres have weakened China's population control program, which is essential to maintaining growth in living standards. Another long-term threat to continued rapid economic growth is the deterioration in the environment, notably air pollution, soil erosion, and the steady fall of the water table especially in the north.
China continues to lose arable land because of erosion and economic development.
The next few years will witness increasing tensions between a highly centralized political system and an increasingly decentralized economic system.