1
 China could exhaust its foreign-exchange reserves as early as next year, 
5001
span

2
a Western government report says, 
1
attribution

3
unless imports are cut drastically 
5003
span

4
to help narrow the balance-of-payments deficit.
3
purpose

5
 According to the report, 
5005
span

6
completed last month, 
5
elaboration-object-attribute

7
if China's trade gap continues to widen at the pace 
5006
span

8
seen in the first seven months of this year, 
7
elaboration-object-attribute-e

9
the reserves would be wiped out either in 1990 or 1991.
5009
span

10
 A country is considered financially healthy 
5010
span

11
if its reserves cover three months of its imports.
10
condition

12
 The $14 billion of reserves 
5012
span

13
China had in June 
12
elaboration-object-attribute

14
would cover just that much.
5013
Same-Unit

15
 The report by the Western government, 
5015
span

16
which declines to be identified, 
15
elaboration-object-attribute-e

17
concludes that
5016
Same-Unit

18
 a near-term foreign-exchange payment problem can be avoided 
5018
span

19
only if import growth drops to below 5% per annum. 
18
condition

20
 According to Chinese customs figures, 
5028
attribution

21
import growth has slowed in recent months, 
5021
span

22
dropping to 16% in July and 7.1% in August from the year-earlier periods, 
21
evidence

23
compared with an average growth rate of 26% in the first half.
5021
comparison

24
 But 
5024
Same-Unit

25
before import growth slowed, 
26
temporal-before

26
China's buying spree in the first half already had taken its toll on foreign-exchange reserves. 
5025
span

27
The $14 billion level in June marked a drop from $19 billion at the end of April.
5024
background

28
 China's last big import binge sent reserves tumbling to $10.6 billion in June 1985 from $16.6 billion the previous September.
5026
evidence

29
 China might stave off a crisis 
5029
span

30
if it acts as forcefully 
5030
span

31
as it did 
5031
span

32
to arrest the 1985 decline, 
5032
span

33
when Beijing slammed the brakes on foreign-exchange spending 
5033
List

34
and devalued the currency.
5033
List

35
 But this time, China faces a more difficult battle because of economic forces 
5035
span

36
that have come into play since the Tiananmen Square killings June 4. 
35
elaboration-object-attribute-e

37
 For example, China's hard-currency income is expected to suffer from the big drop in tourist arrivals since June 4. 
5037
span

38
Revenue from tourism this year is projected to total $1.3 billion, down from $2.2 billion last year. 
37
restatement

39
Because of this and the huge trade gap, the deficit in China's current account, 
5038
span

40
which measures trade in goods and services plus certain unilateral transfers of funds, 
39
elaboration-object-attribute-e

41
is expected to widen sharply from the $3.8 billion deficit last year.
5039
Same-Unit

42
 The Western government report suggests a number of scenarios for China's current-account balance, two of which are considered most likely.
5044
span

43
 In one, imports and exports continue to grow at the respective average rates of 25% and 5% 
5042
span

44
recorded during the first seven months, 
43
elaboration-object-attribute-e

45
and the current-account deficit widens to $13.1 billion.
5045
span

46
 In 1985, China had a record deficit of $11.4 billion.
45
comparison

47
 The other scenario assumes 
5047
span

48
that Beijing takes effective actions 
5048
span

49
to curb imports in the coming months.
48
purpose

50
 In this case, China would still finish the year with a current-account deficit of $8.7 billion, 
5050
span

51
based on projections 
5051
span

52
that imports for all of this year grow 20% and exports 10%.
51
elaboration-object-attribute

53
 If China were still on good terms with foreign lenders, 
5054
condition

54
it might be able to stem the drain on its foreign-exchange reserves 
5054
span

55
by using some loan funds 
5055
span

56
to offset the current-account deficit.
55
purpose

57
 But since June, foreign bankers 
5057
span

58
led by international financial institutions 
57
elaboration-object-attribute

59
have virtually suspended their new loans to China.
5058
Same-Unit

60
 Even if borrowing resumes, 
61
condition

61
commercial bankers aren't expected to lend as much as before.
5059
span

62
 In addition, economists are forecasting a slowdown in foreign direct investments 
5062
span

63
as businessmen become increasingly wary of China's deteriorating political and economic environment. 
62
temporal-same-time

64
On top of all this, foreign-debt repayments are expected to peak in 1991 to 1992.
5063
List

65
 With less capital coming in, 
5065
span

66
China's balance of payments would suffer.
5066
span

67
 The Western government report's first scenario assumes a 30% reduction in foreign borrowing and a 5% contraction in foreign direct investment.
5067
List

68
 In the second, foreign borrowing is projected to grow 10% and investment to drop 10%.
5067
List

69
 But in either case, 
5075
span

70
the report says, 
69
attribution

71
China's balance of payments would rapidly dry up foreign reserves, 
5071
span

72
which are used 
5072
span

73
to finance the imbalance. 
72
purpose

74
In the first scenario, the reserves would be exhausted next year, 
5074
List

75
and in the second they would be wiped out in 1991.
5074
List

5001
span
5002
span

5002
span
5004
span

5003
span
5001
condition

5004
span
5019
span

5005
span
5007
attribution

5006
span
5009
condition

5007
span
5008
span

5008
span
5002
elaboration-additional

5009
span
5007
span

5010
span
5011
span

5011
span
5076
span

5012
span
5013
Same-Unit

5013
multinuc
5010
interpretation-s

5014
span



5015
span
5016
Same-Unit

5016
multinuc
5018
attribution

5017
span
5011
conclusion

5018
span
5017
span

5019
span
5036
span

5020
span
5004
elaboration-additional

5021
span
5022
span

5022
span
5023
span

5023
span
5028
span

5024
multinuc
5026
span

5025
span
5024
Same-Unit

5026
span
5027
span

5027
span
5022
antithesis

5028
span
5020
span

5029
span
5023
contingency

5030
span
29
condition

5031
span
30
comparison

5032
span
5034
span

5033
multinuc
32
temporal-same-time

5034
span
31
purpose

5035
span
5032
antithesis

5036
span
5041
span

5037
span
5040
span

5038
span
5039
Same-Unit

5039
multinuc
5037
reason

5040
span
5019
example

5041
span



5042
span
5043
Same-Unit

5043
multinuc
5046
List

5044
span
5064
span

5045
span
5043
Same-Unit

5046
multinuc
42
elaboration-additional

5047
span
5046
List

5048
span
5049
span

5049
span
5053
span

5050
span
5048
result

5051
span
50
attribution

5052
span
5056
span

5053
span
47
elaboration-additional

5054
span
5052
span

5055
span
54
means

5056
span
5061
List

5057
span
5058
Same-Unit

5058
multinuc
5060
span

5059
span
5058
elaboration-additional

5060
span
5052
antithesis

5061
multinuc
5049
elaboration-additional

5062
span
5063
List

5063
multinuc
5061
List

5064
span
5036
hypothetical

5065
span
5044
circumstance

5066
span
65
result

5067
multinuc
5068
span

5068
span
66
evaluation-s

5069
span



5070
multinuc
5067
antithesis

5071
span
5073
span

5072
span
71
elaboration-object-attribute-e

5073
span
5070
Same-Unit

5074
multinuc
5071
result

5075
span
5070
Same-Unit

5076
span
9
explanation-argumentative

