Despite floods and droughts, China expects to report the second largest harvest in its history this year. This is probably the single most encouraging statement in Premier Zhao Ziyang's 72-page report to the National Peoples' Congress, China's legislature, Nov. 30, since 80 percent of China's 1 billion people are peasants.
For many years to come, agriculture will have to be the essential foundation on which ambitious industrialization and modernization programs will be built.
Zhao's report was generally upbeat in its appraisal of the Chinese economy's performance during the past year. But he did not gloss over the enormous efforts that must be made if the country is to achieve its modernization program within this century.
He spoke of energy and transport as the weakest links in the country's economy and said the waste of energy was ''shocking.'' He called for more fiscal discipline and order in the readjustment policy as it is being applied in industry. In agriculture he admitted that despite its importance the state could not afford to make large investments and that further growth in production would depend on ''science and policy.''
China has reaped three bumper harvests in a row: 1979, when grain production reached 332 million tons, 1980 when it came to 318 million, and 1981, when the promised yield is said to be second only to 1979.
Zhao also repoted that China has become the world's fourth largest producer of oil (after the Soviet Union, Saudi Arabia, and the United States) and expects to continue production at the present level of about 100 million tons per year for several more years.
''Not long ago some people predicted that our oil production would decline to the point where we would change from an oil exporting to an oil importing country. I can assure you that this situation will never appear,'' said the Premier, as 3,156 deputies in the cavernous Hall of the People applauded.
The fact is that China's onshore oil production reached a plateau a couple of years ago. There are fears that offshore oil will not come on stream early enough to make up for a decline that is expected in onshore oil production in the mid-1980s.
Zhao announced as expected that stringent controls on capital construction and other expenditures had brought the estimated deficit for 1981 down from the 10 billion yuan expected at the beginning of the year to about 2.7 billion yuan ($1.58 billion). Even though some foreign experts have questions about the accuracy of Chinese statistics, this announcement and one that agricultural and industrial output increased by 3 percent overall during the year, is encouraging.
Heavy industry seems to be beginning to climb out of the deep depression that hit it at the beginning of the year.
But the reminder that China will have to make the most strenuous efforts to keep population from rising above 1.2 billion by the end of the century shows the scale and intractability of the problems China faces. China's drastic one-child-per-couple movement is essential if the 1.2 billion goal is to be reached, but according to Zhao the very incentive policies that have brought prosperity to the countryside are also encouraging people to have as many rice-winners as possible in the family, thus endangering the population policy.
Zhao emphasized and reemphasized that the economic policies identified with Party Vice-Chairman Deng Xiaoping, Chairman Hu Yaobang, and himself are here to stay. Foreign investors need that assurance and so do China's peasants and city dwellers.