Last year was a sobering one for Chinese reformers led by senior leader Deng Xiaoping, as the costs, strains and tensions caused by rapid economic growth came to China's cities.
As a result, economists say, there will be no dramatic new economic reforms in a go-slow 1986 economy; officials are calling for a year of consolidation.
Pessimists say this amounts to a loss of momentum that only encourages the opponents of reform in China.
Optimists see it as a matter of dealing with the problems of success, a pause that could strengthen the reforms.
If consolidation works, it will mean a moderation of inflation in prices that, according to official figures, hit 11 percent in the cities last year, causing great anxiety among urban dwellers. Independent observers say inflation actually reached as high as 20 percent.
In the cities and the countryside, the influence of China's veteran economic planner Chen Yun is now evident. The octogenarian Chen has long preached the need for price stability, balanced growth, and centralized planning. His ideas seem to be balanced, however, by the government's decision to push ahead with an increasingly diversified rural economy and more autonomy for some industries and managers.
At the same time, the government is attempting to keep the country open to the world through foreign investment, imports of technology, and consolidation, if not expansion, of the country's ports and special economic zones.
Tighter controls over imports and foreign exchange may, to a degree, reflect the influence of the conservative Chen and his colleagues. But a broad consensus seemed to have been reached last year that something had to be done to bring runaway loans and spending on imports and capital construction under control.
A key problem for China's planners is the need to increase exports, which have lagged far behind the country's import growth and extraordinarily high industrial and agricultural production rates. Aside from the protectionist barriers that China faces abroad, some Chinese products are simply priced too high to compete overseas.
In the countryside last year, meanwhile, despite bad weather and a reduction from previous record grain harvests, cash crop production increased substantially.
Li Jinghua, a spokesman for the agriculture ministry, said in a recent briefing that this year, despite a need to reemphasize grain production, there will be no return to the days when grain was "overemphasized," to the detriment of other crops.
The spokesman also indicated that the country will continue to rely on rural enterprises, or so-called township enterprises, which are in many ways free of government controls, to overcome difficulties caused by limited arable land, a surplus rural labor force, and a shortage of funds and loans in rural areas.
According to Li, township enterprises have become a major component of China's economy and growth and an important source of tax revenues. These enterprises are responsible for their own profits and losses and make many of their own decisions as to the quantity and quality of production. By 1990, at the end of the five-year-plan period that is just beginning, these enterprises will absorb more than 100 million workers, or 30 percent of the current rural labor force, Li said.
Some observers are predicting that because of conservative opposition to the western ideas and influences that have come in along with the imports of consumer goods and technology, China will gradually close its partially open door. During the coming year, a key test of this openness will be whether the Chinese make foreign investment more attractive or not.
The government is reported to be considering taking measures that would give foreign investors more opportunities to reinvest their local earnings, a move in the right direction, according to some observers.
But according to an American Embassy report issued toward the end of last year, U.S. business representatives in Peking continue to voice concern over the "commercial and potential political risk to U.S. investment in China, particularly in light of heightened uncertainty about foreign-exchange availability, confusion over China's byzantine bureaucratic structure, and rising costs to foreigners doing business in China."
It said, however, that there are indications that policymakers in both the United States and China intend to renew efforts to achieve a "meaningful" bilateral investment treaty in 1986, something which the United States has been advocating for several years.
Of perhaps even greater long-range significance would be a Chinese decision to join the General Agreement on Tariffs and Trade, which includes many of the most developed, industrialized nations. This would be a further sign that China intends to adapt itself to the western-oriented world market system.
Chinese officials have quietly indicated to some member nations that Peking wants to join and that it would also like to be part of talks on a new trade negotiating round in the spring. These moves would mean opening up China to more imports. But negotiations over China's entry into GATT are likely to be complicated and could drag on for years, one expert said.
Another thing to watch, economists say, is whether China takes the World Bank's advice and begins to seek more than token foreign commercial bank loans in the coming year. There are hints that it will.
At the end of last year, the National Council for U.S.-China Trade in Washington issued a report predicting "moderate growth" in trade between the two nations this year, although the possibility of continued foreign-exchange restrictions added uncertainty to the forecast.
Chinese officials insist that Peking will continue to emphasize the use of foreign capital and technology in its modernization effort, the council said, particularly in the energy, transportation and telecommunications sectors -- all areas in which U.S. firms are competitive.
Economist say that 1986 will be a year of further trade friction with Japan, which is China's leading trading partner. There is no easy way to overcome the the unfavorable imbalance in trade between the two nations, economists say. And that imbalance accounts for nearly all of China's trade deficit.