During the period of the Eighth Five-Year Plan, the state increased its investment in infrastructure and basic industries and established new development mechanisms for these industries through reform. As a result, great strides had been made in these areas, especially in railway, highway, communication, port, airport and power industry. According to an incomplete statistics, out of the nearly RMB 600 billion yuan of various funds collected by the central government and local governments at all levels, more than 60 percent were invested in capital construction. At the same time, more decision-making rights were delegated to the local governments with regard to communication and telecommunications and more efforts were made to utilize foreign investment and collect funds through many channels. All this had promoted the development of these basic industries, strengthened Chinese economy for future development and ensured a sustained, rapid and sound development of the national economy.
Economic development is the basis on which foreign trade grows.
At the same time, the growing foreign trade also constitutes a major element in promoting economic development. During the Eighth Five-Year Plan, China's foreign trade expanded considerably and managed to become one of the ten major export countries in the world and China's percentage in the total volume of world commodity trade rose very fast. During the period from 1989 to 1991, economic readjustment narrowed the gap between demand and supply within the country , the amount of exports increased rapidly while that of imports plummeted. As a result, a favorable balance of trade appeared continuously and China's foreign exchange reserve increased at a high speed. In the two decades after the initiation of reform and opening to the outside world, China's economy has undergone a fundamental change from planned economy to market economy.