TAIWAN: PROSPECTS FOR REUNIFICATION VOL. 29. NO. 11 MARCH 17, 1986 CONTENTS HIGHLIGHTS OF THE WEEK NOTES FROM THE EDITORS 4 Reform Redresses Distorted Price Speaking Out On Year of Peace System EVENTS/TRENDS 5r9 In an interview with our correspondents, Zhang Wenjin, Satellite Links China in : President of the Chinese People's Association for Friendship Modern Orbit with Foreign Countries and deputy director of the Chinese Beijing Honours Working Women Organizational Committee for International Year of Peace, Meeting Commends Model Workers dwells on the questions of war and peace, disarmament, Bureau Stats In On Economic regional conflict and the peace movement (p. 20). Boom China, Philippines to Broaden Tics Prospects for Taiwan Mainland Reunion Bronze Bust of Zhou Enlai Unveiled Beijing Review publishes in this issue three articles by staff INTERNATIONAL 10-13 members of the Taiwan Affairs Research Institute of the Western Europe; US Allies Waver Chinese Academy of Social Sciences, in an effort to answer on Arms Control some questions relating to the recent political and economic Latin .America: Urgent Steps to Curb situation in Taiwan and the prospects for the peaceful Looming Debts reunification of China. After a detailed analysis, the authors West Germany-France; Growing conclude that Taiwan's continued refusal to reunify with the Bilateral Ties Denmark: Referendum Backs mainland will get the island nowhere. The only reasonable way EEC Treaty Reforms out for Taiwan, the authors argue, is to embark on the road to Rwanda; Building Economy reunification by entering into negotiations with the mainland Slowly But Surely authorities (p. 14). Taiwan: Prospects for Reuni• fication 14 Redressing tiie Distorted Price Structure Speaking Out on 'Year of Peace' 20 Because of long-term negligence of the law of value and role of the market, China's price structure had been seriously New Laws Uphold Women's Rights 22 distorted. Following the publication of the Party Central Travel In China Made Easier for Committee's 1984 document on economic reform, China began Foreigners 24 redressing its price structure through planned readjustment and Chinese Cities and Counties Open market regulation. The reform will require several years of to Foreign Visitors 25 painstaking work (p. 4). FROM THE CHINESE PRESS 26-27 BUSINESS ARADE 28-29 Satellite Paves Way for Modernization CULTURE/SCIENCE 30-31 The impact of the launching of China's first telecommunications satellite will be felt far beyond the BOOKS 32 improvement of radio and television reception. It will help pave SPORTS 33 the way for the development of the nation's space technology LETTERS 34 and its modernization drive as a whole (p. 5). COVER: Laft: The rocket blasting off with the telecommunications satellite on board. Upper right: Ship radars tracking the Laws to Uphold Women's Rigiits satellite. Lower right: The control unit at the Inheritance laws and other regulations have been launching centre. promulgated to address incidences of discrimination and Photo by Zou Yi mistreatment of women in many spheres of society (p. 24). Pvbltihed every Monday by BEIilNG REVIEW USA USSZZJIO 24 Baiwanzhuang Road, Beijing P.O. Box 399, Beijing, Otino New ZMlond... NZ.$ 30.110 UK.. ..... £t2jn The People's RepubUc of China Reform Redresses Distorted Price System by Geng Yuxin n irrational price system can planned commodity economy directly affect its population's A distort the value of goods just which requires exchanges at equal livelihood. as a warped mirror can a person's value, and has stressed the The current price reform will image, said the late economist Sun principle of distribution to each have a far-reaching impact. From Yefang. according to his or her work, the results logged last year, it is China's commodity prices, which in turn calls for the clear that China's gain outweighs which were frozen for many years, exchange of equal amounts of its loss. Commodity production were seriously distorted by such a labour. Under such circum• climbed and the market surged system, due to historical factors stances, price reform became forward. In 1985. the total retail and long-time negligence of the inevitable. sales value increased by 30.7 law of value and the role of the In October 1984, the Party percent, and the averaged price market in setting prices. Although Central Committee issued its index also hit a record high and there have been some changes in programmatic document on was up 8.8 percent over 1984. Of the amount of socially necessary economic reform. In that state• the increase, 12.2 percent was in labour which constitutes the base ment, price reform was considered cities and 7 percent was in the of commodity value, and in the a key to the country's reform. countryside. After price hikes are relationship between supply and Now the distorted prices are being factored in, rural per-capita demand, commodity prices have gradually redressed through the income still went up 8.4 percent, not been altered accordingly. For combination of a planned readjus• while those in the cities rose 10.6 example, urban residents continue tment and market regulation, and percent. to pay for rationed grains, cooking an operative mechanism is Nevertheless, Chinese con• oil, and rent at the 1950s prices. expected to be established, under sumers, who are used to a stable The distortion was also re• which commodity prices can price environment, have shown flected in price parities between promptly reflect commodity concern over the price hikes. If the various commodities; Prices for values (which are determined by price rise continues, people will products of the same category average production cost and find that their wage increases will were not fixed according to their average rate of profits) and mirror be offset by inflation. The price quality. What resulted were low the change in the relations rises have, therefore, become a prices for agricultural and sideline between supply and demand. major topic of conversation products, minerals, raw materials Price reform is an arduous and among the people. and labour services, and high complex process that involves After making a comprehensive prices for processed goods. almost all trades. The reform will survey of the merits and problems In China, an 18"-colour lead to an overall readjustment in of the price reform, the Chinese television set costs 1,500 yuan distribution of national income, government decided to hold off on (US$469), almost equivalent to and it is obvious that it will require major reform measures for 1986. the price of one ton of beef several years of painstaking work. Instead, the government has purchased before the price reform In 1985, China took a big step chosen to concentrate on conso• began last year, and 380 kg at the towards price reform. To date the lidating and improving measures current price. Despite the dif• reform measures include a pur• already carried out in the hope of ferences in the two goods, this chase contract system, which stabilizing commodity prices. irrational price ratio would replaced the state monopoly on Is such a plan a retreat from the seldom be seen on the .intern• the purchase and marketing of reform because of resistance, as ational market. grain, cotton and edible oil and some foreign critics have sug• Before the price reform, China lifting price controls on meat, gested? No. it is not. had rejected the idea of consider• vegetables and other perishable What are the motives behind ing its socialist economy a food, all of which are allowed to be this decision? commodity economy, and people sold freely at markets. In addition, First, it is possible to conduct had grown accustomed to the the government has decontrolled price reform while holding the lid irrational distribution system, prices for small articles of daily on prices. The current price which was metaphorically de• use, and increased short-distance reform as a whole is a structural scribed as "everybody eating from train fees. This is the first time readjustment, which is intended to the same big pot." In recent years, since the founding on New China send some prices up and others however, China has come to that the government has enacted down and thus will not lead to an regard its socialist economy as a price reform measures that so overall price hike. 4 ULLIINCJ RLVIE;W. NO. I I Satellite Links China in IVIodern Orbit The accurate orbiting of a telecommunications satellite brings the nation's space technology into active service. n the showroom of the Beijing involved in the project from the I Satellite Ground Station in a Central Committee of the western suburb, a group of high- Communist Party of China, the ranking Chinese officials were State Council and the Central seated in front of eight colour TV Military Commission. It also broadcasts from the application showed that China's satellite communications satellite spon- communications had moved from telecommunications satellite. the experimental stage into one of However, last year the prices for It was an on-the-spot gathering application, the message added. most decontrolled commodities for the trial transmission of TV "This achievement is of great went up, particularly those for broadcasts from the application significance in speeding up the nonstaple food, a matter which communications satellite spon• nation's modernization drive and concerns every Chinese family. sored by the Commission of developing its space technology," The increases sparked dissatisfac• Science, Technology and Industry it said. tion among China's consumers. It for National Defence (CSTFND). is, therefore, imperative to curb The satellite is functioning perfectly for telecommunications, prices in order to maintain social At 7 pm sharp, when the China radio and television transmission order and to reassure the public.