The Chinese government however, admits officially that agricultural growth has been lag-ging behind the country's overall economic advance now for years. Negatively impacted by the Asian financial crisis which broke out in mid 1997, China s economy was not able to maintain the high growth rates it had experienced throughout n most of the past 20 years. China s rural economy has suffered from sluggish domestic sales, and plummeting prices for at least three years now. For the first time since agricultural reform in the late 1970's, farmer s real income failed to grow. The Chinese agricultural equipment market is dominated by ap-proximately 2,100 domestic manufacturers which produce a wide range of products.
Most domestic manufacturers are still state-owned enterprises.
Labor intensive farming is still the major farming method. The growth of China's machine tool market is directly related to the growth rate of the Chinese government's investment in fixed assets and various new economic policies. In 1999, the investment focus was on infrastructure development, national grain storage facilities, environmental protection, and the renovation of rural power networks. These direct and indirect stimuli for machine tool consumption will continue to influence the machine tool market for the remainder of 1999. The demand in China for CNC lathes and special-purpose machine tools continues to rise.