A CHINESE WEEKLY OF NEWS AND VIEWS eiiin Vol.29,No.32 August 11 ,1986 DENG XIAOPING ON POLITICA A China's Father of the A-Bomb SPOTLiqHT Ancient-Style Market Street Opens in Tianjin Tianjin's market street, fashioned after ancient style, has opened to visitors. The shops in the street mainly deal in antique works of calligraphy and traditional Chinese paint• ings, and various handicrafts. An ancient-style pantomime show in the street. VOL. 29, NO. 32 AUGUST 11, 1986 CONTENTS HIGHLIGHTS OF THE WEEK NOTES FROM THE EDITORS 4 Developing Industry at Deng on Reforming Leadership System Balanced Tempo • Deng Xiaoping explains the necessity and the basic policies EVENTS/TRENDS 5-10 for reforming the leadership of the Party and the state in a Democracy Es.sential to Policy speech he gave in 1980 to an enlarged meeting of the Political Making Bureau (p. 15). China to Change Farm Product Mix Price Increases Slowing Down Soft Drinks: Demand Outstrips Supply Making Policy-Maklng More Democratic Waste Hurts Building Industry • Vice-Premier Wan Li says it is essential to the reform of INTERNATIONAL 11-14 China's political system to make pohcy-making more Addis Ababa: 22nd OAU Summit democratic and scientific. He calls on workers in China's soft Concluded sciences to contribute to the study of policy issue (p. 5). Britain: Howe's Mission Ends in Failure Europe: Rapid Advance for 'Eureka' United States: Steel Industry Struggles To Survive Father of China's A- and H-Bombs Reforming Leadership System 15 • Because of his lifelong devotion to the theoretical design of China's nuclear weapons, Deng Jiaxian, who died on July 29, Deng JIaxlan: China's Father of achieved a reputation as the architect of his country's "two A-Bomb 20 bombs" (p.20). The Lopsided Japan-US Economic Ties 23 SPORTS 27 Industry Grows at moderate Rate • Thanks to a series of measures to moderate the growth rate. FROM THE CHINESE PRESS 28-29 China's industrial production is back to normal. Economists expect it now to maintain sustained and balanced growth (p. 4). BUSINESSARADE 30-31 CULTURE/SCIENCE 32-33 LETTERS 34 Behind Japan's Economic Offensive COVER: Architect of China's nuclear • The United Slates is being elbowed out its international industry Deng Jiaxian. and domestic markets by Japan. The latter has become the largest creditor nation and the former a debtor nation. What Photo by Meng Zhaorui these and other developments signify for the world is the topic of discussion by a Chinese scholar (p. 23). Published ewry AAonday by DistribuTed by China intwmafioiMi look SHbtcripMon prices (1 yeor): BEIJING REVIEW Trodins Corporatton (GUOil SHUOIAN), AwtroMo... A.$22JI0 USS2IM 24 Baiwonzhuang Road, Beijing P.O. Box 399, BeHinfl, China New Zeoloml... NZ.S1I.00 UK The People's Repubfic of China Canada....... Con. S21.00 NOTES FROM THE EDITORS Developing Industry At Balanced Tempo by Yao Jianguo n the first half of this year, 14.6 percent and cement by 14.8 I China's industrial output percent. Among consumer goods, reached 428.4 billion yuan in refrigerators climbed 55.3 percent, value, up 4.9 percent from the electric fans 29.1 percent, cameras corresponding period of last year. 33.2 percent. The output of dairy This figure, however, is smaller products rose 30.5 percent. some factories have turned out than the planned growth rate of 8 • The proportion of brand- products of poorer quality at percent for the year. This does not name, high-quality products in• higher consumption of materials. mean China's industrial produc• creased. Between January and The situation is now favourable tion has been losing momentum, May, the output of double-door for China's industrial develop• but represents an inevitable refrigerators jumped almost 100 ment, following the introduction slowdown from the extremely high percent, and that of twin-tub of a series of reforms over the last rate of growth of 1985. washing machines 60-70 percent. few years. In planning control, In the fourth quarter of 1984, In a national survey of 100 China has narrowed the scope of capital construction and credit different industrial products, 75 mandatory planning and is relying flows in China ran out of overall had already fulfilled half of the more on guidance planning and control. This led to a 23.1 percent annual plan. Those which have market regulation. Enterprises increase in industrial output in the failed to reach planned targets are have been given more dicision- first half of 1985 over the same all unsalable products whose making powers in return for better period of the previous year, production has therefore been performance. In the management aggravating already strained restricted. of capital construction and the supplies of energy and raw- • Market sales have been brisk building industry. China has materials. The government then both at home and abroad. From replaced the customary practice of adopted a series of measures January to June this year, financial allocations with the new aimed at moderating the rate of industrial goods purchased by the method of issuing loans according growth in the second half of 1985. state was 7.7 percent higher than to the state plan (but still failed to in the corresponding period of control the scale of local capital Compared with the correspond• construction). It has also in• ing period of 1985. industrial 1985; and retail sales went up 11.8 percent. Export-ofiented products stituted a system under which one production in the first half of this is required to complete a capital year had the following features: showed an impressive growth. In the six months China's exports construction project with a fixed • Light and heavy industries reached US$12.8 billion in value, a amount of investment and a developed proportionately. Light system by which an engineering 13.7 percent increase. industry rose 5.1 percent while project is contracted out to a heavy industry increased 4.6 However, some Chinese enter• certain company through public percent, with the output value of prises have performed poorly due bidding. light industry accounting for 49.7 partly to ill-considered policies Although industrial growth for percent of the total industrial when the old economic system was the first half of the year was lower output value, and that of heavy being replaced by the new, partly than last year, it began to gain industry 50.3 percent. to increases in the prices of raw momentum again in the second • The production of commod• materials and fuels and partly to quarter. In June it rose to 6.9 ities in great demand has rigid state control in some fields. percent and a bigger increase is increased. The output of electric• From January to May this year anticipated for the second half of ity rose by 8 percent, much higher national revenue increased only the year. China's industry is then than that for industry as a whole. 2.3 per-cent. lower than the expected to maintain sustained Steel rose by 10.4 percent, rolled growth rate of industrial output and balanced growth at an steel by 9.7 percent, pig iron by for the same period. Moreover, appropriate rate. • 4 BEIJING REVIEW, NO. .^2 Democracy Essential to Policy Making ne vital aspect of the reform of China's modernization pro• the effect of different policies on O China's political system is to gramme. He said that science and development trends. uphold fully socialist democracy technology comprise a great force With regard to problems still by making the process of policy promoting social progress, and existing in research in soft science. decision-making more democratic that the task of research in soft Song Jian said many departments and scientific, said Vice-Premier science is to help people observe are still influenced by the Wan Li at a national symposium and analyse, from an overall point traditional habits of a closed on soft science held from July 27 to of view, complex economic and society. "This is a major obstacle ? I in Beijing. social phenomena and draw to the advancement of China's Wan Li, who is also a member correct conclusions; and in so decision-making science," he of the Political Bureau of the doing to adopt more scientific observed. Chinese Communist Party Central decisions on a larger scale "to Soft science is an inter• Committee, said at the closing further promote the development departmental and multi- meeting on July 31 that the of society, including the develop• disciplinary study that combines influence of long years of feudal ment of science and technology. natural science, social science and society and small-scale produc• Wan Li also suggested the engineering techniques. It has tion, combined with the back• enactment of legislation to give been used in strategic decision wardness of science, education legal protection to people engaged making, planning, management, and culture, an imperfect legal in policy research. and the forecasting of human and system, the incompetence of At the opening meeting on July natural resources. Using tools officials and shortcomings in their 27, Song Jian, state councillor and such as computers, the aim of democratic style of work — have minister in charge of the State research is to find out the best all left China without rigorous Science and Technology Com• long-range policy options through procedures and systems for mission, urged Chinese specialists sample surveys, quantitative and forming policies. Moreover, he to make great effortsin research in quantitative analyses and trend said, the country also lacked soft science for the making of predictions. adequate support systems for overall national policies.