ing and medical care provided by the state). Though the SOEs employ only 76 million workers out of China's labor force of 500 million, they consume 70 percent of state investment funds and contribute less than half the country's economic output. While technically bankrupt, SOEs remain afloat on government subsidies.
China's budget deficit continues to escalate, doubling between 1993 and 1994 to $15 billion (or nearly 25 percent of total government receipts). The government is either unable or unwilling to reform the country's outdated monetary and fiscal systems, so inflation continues and increasingly autonomous provincial and municipal governments invest scarce capital in speculative real estate or foreign ventures. Though real GDP per capita has increased, income distribution has worsened in recent years because of the nature of Chinese development.
Nearly all of the economic action has taken place in the special economic zones of Zhuhai, Shenzhen, Shantou, and Xiamen
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