CHINESE WEEKLY OF NEWS AND VIEWS

Vol. 31,No.14 April 4-1 7th NPC & CPPCC in Session

Beijing Review HIGHLIGHTS OF THE WEEK

VOL. 31, N0.14 APRIL 4-10, 1988 LI Peng Reports to Seventh NPC CONTENTS NOTES FROM THE EDITORS 4 • In his report to the Seventh National People's Congress, Food Subsidies to Float With Acting Premier Li Peng sets out the principles, aims and tasks of Price Index economic development and reform for the next five years. He EVENTS/TRENDS S-9 calls for speeding up and extending the reform so that China's Li Peng Reports to Seventh gross national product can reach 1,550 billion yuan by 1992 (p. NPC 5). CPFCC Committee Opens First Session Scientific Work Must Get CPPCC Committee In Session Priority China Moves to Wipe Out • Highlighting the opening meeting of the first session of the Leprosy new committee, Vice-Chairman of the Chinese People's Weekly Chronicle (March 21-27) Political Consultative Conference Qain Xuesen's work report inT^KATiOtlAi 10-43 summarized the achievements of the Sixth CPPCC National Italy: Government's Resignation Committee over the past five years (p. 7). Accepted Africa; OAU Group Discusses Debt Conference Food Subsidies to Offset Price Rises Mauritius; Tiny Country Makes Economic Strides • Confirming its determination to pursue price reforms which Thailand: Investment, Exports: consider the interests of both producers and consumers, the Key to Success Chinese government has decided to offer subsidies for food to The Contract S^tem on the Ralls 14 urban dwellers in an effort to offset local price rises (p. 4). Discussions: Contraet Sy^st^ In CMNi's Enterprises IB Now tf$n6 tn Enterprise Reform 19 China's Tibetan Demographic Changes Tlbe«iR»^inhat>ited Areas: OMgrdphic Changes 21 • Demographic changes disqualify accusations against ResiMMfttuHng Maanshan's China's Tibetan population policy and expose as wild OdA^emment 2S exaggerations the claim by the Dalai Lama clique that there are tmtm figures: 1S87 Retaii more than 6 million Tibetans in Tibet (p. 21). i»riii Index Rises 7.3% 27 mtfiivm ^CokHiredi nctwial) Centrefold The Contract System on the Rails FROM THE CHINESE PRESS 28-29 BUSiNESSARADE 30>31 • The contract system granting more responsibility to local CUiTURE/SCIENCE 32-33 railway bureaus and linking remuneraUon with performance 5M 34 has been linked with China's railways for two years now. One of The Shenzhen North Station its success stories is the Guangzhou Railway Bureau (p. 14). (left). Duan Xiaosheng, head of the Guangzhou-Jiujiang passenger trans- porT-section (right). The Guangzhou Railway Station (lower).

Subscription rates (1 year): USA.. US$24.00 Pubiish«W every Monday by General Editorial Office Tel: 8314318 Australia A.$24.00 Canada Can.$23.00 English Dept Tel; 831.5599 Ext 546 BEIJIffe REVIEW New Zealand NZ.$33.00 24 Bai^Bnzhuang Road, Distributed by China International Book UK £13.00 Beijing'100037 Trading Corporation (GUOJI SHUDIAN) The Peoples Republic of China P.O. Box 399, Beijing, China m NOTES FROM THE EDITORS Food Subsidies to Float With Price Index by Ling Bin ising prices have raised great by 10.1 percent. The price of meat, tural and sideline products are still R concern among the general poultry and eggs went up by 16.5 too low compared to those of public in recent years. In his report percent; that of vegetables, 17.7 processed goods, and they will to the Seventh National People's percent; and that of aquatic continue to rise. Offering some Congress delivered on March 25, products, 17 percent. Of the 7.3 compensation to urban residents Li Peng discussed policies related percent rise in the retail price for higher prices will reduce to this issue. He said that the index, price hikes on food resistance to the ongoing price government will continue to products accounted for 65 per• reforms. reform the irrational pricing cent, indicating a serious discrep• Third, of the total expenditure system and readjust the prices of ancy between the supply and of urban dwellers, about 60 agricultural and sideline products demand of agricultural and percent goes to food products. to promote the development of sideline products. Consumer de• Offering subsidies to cover price production. At the same time, he mands for variety and quality has rises for basic food products is continued, urban dwellers will be increased too rapidly and cannot conducive to social stability, and subsidized for the rationed part of possibly be met. As a result, many will provide some protection principal foodstuffs to offset local cities have been compelled to against declining living standards price rises. reintroduce the rationing of pork, in families with lower incomes. eggs and other food products. Subsidies will be granted for six The government is obviously The problem of food supply basic food products — grain, oil, not wavering in its determination shortages cannot be tackled by meat (including beef, mutton and to pursue price reforms while simply returning to the old system pork), common vegetables, fresh taking into account the interests of of state monopolized purchasing eggs and sugar. Of these, grain and both producers and consumers. and marketing. It can only be done oil have been rationed at low Since 1979, China has gradually by adopting appropriate pricing prices for quite some time. This relaxed government controls over measures, developing agricultural policy will remain unchanged. the prices of agricultural and production, stimulating commod• Price controls on the other four sideline products and of primary ity circulation and controlling items will be lifted and appropri• products from mining and other excessive consumer demand. Pric• ate subsidies issued on rations. industries, which have been ing is the most important factor The subsidies will be extended to remained relatively low for a long here since it is closely linked to the urban workers and office staff and time. This has. directly or interests of both producers and their families, retired Jjeople, indirectly, resulted in a series of consumers. The most feasible servicemen and women, and price rises for foodstuffs and approach to the problem is to students, but not to those who find processed goods as well as labour gradually raise the prices of temporary employment in the services. In the three years from agricultural and sideline products cities. 1985 to 1987, in particular, the so that farmers can make a profit, national price index rose by 8.8 Of course, even after the and to provide urban dwellers percent, 6 percent and 7.3 percent introduction of the policy, the with subsidies for rationed part of respectively, with more rapid price government will still have to principal foodstuffs adjusted to increases in the cities. During the improve the production and changes in the general price index. process of reform, a certain rise in supply of agricultural and sideline prices is inevitable ^ and is Several conditions lie behind goods, to keep the growth of the indispensable for promoting the the reasoning in this approach. retail price index within the reach development of a commodity First, China has large population of the community, and to economy. But, China has ex•but insufficient cultivated land. strengthen market control and perienced too rapid price rises in No dramatic changes in people's supervision. With the rapid the past few years. diet are likely in the near future, development of commodity pro• and no real increases in the output duction in the countryside, At present, the crux of China's of meat products are expected. So officials at various levels must price problem is the price of food subsidies should be issued to learn the importance of the law of products. According to statistics urban residents on rationed food value, and co-operate with provided by the State Statistics products. farmers in line with the principle Bureau, in 1987 food prices rose Second, the prices of agricul• of exchange of equal value. •

4- BWJING REVIEW, APRIL 4-10, 1988 an average annual increase of 8 million tons. Li Peng Reports to Seventh NPC The keys to strengthening basic industries and infrastructure — the weak links of the national cting Premier Li Peng has the foundation for sustained economy — are technological A stressed the importance of economic development of the transformation, renovation and stepping up agricukural produc• country." expansion, the improvement of tion, developing basic industries Investment in agriculture must rnanagement, full use of resources and infrastructure, and speedily be increased and efforts should be and funds and maximizing implementing a strategy of made to improve the physical and productivity, Li said. economic development for coastal technological standards of farm The development of the produc• regions. production to provide the basis for tive forces, the improvement of In his report on the work of the further development. economic results and the progress government to the first session of He set a production target for of the whole society depend on the the Seventh National People's grain of 500 million tons by the development of science, tech• Congress (NPC), which opened on end of the century, which means nology and education, he added. March 25 in Beijing, Li included these objectives among the 10 Li Peng reports on government work. XUE CHAO major tasks to be accomplished in the next five years. He told about 3,000 deputies at the Great Hall of the People that the coming five years would be "the most important period" for China in replacing its old political and economic structure. It would see the completion of the second step of the strategic plan for national economic development. By 1992 — the second year of the Eighth Five-Year Plan period, Li predicted gross national product (GNP) will reach 1,500 billion yuan at an average annual growth rate of 7.5 percent, which is almost the same as the rate set in the Seventh Five-Year Plan. When this goal is attained China's GNP will be 1.7 times that of 1980. near the start of the country's reform programme and open policy. In his comprehensive report, Li summed up the achievements and problems of the past five years of construction and reform; set out the principles, aims and tasks of economic development and re• form for the next five years; and outlined China's foreign policy and its view of the international situation. Focusing on agriculture as the pace-setter, he said the steady growth of agricultural production, especially grain production, "is

BEIJING REVIEW. APRIL 4-10, 198S^ 5 m EVENTS/TRENDS

The first session of the Seventh NPC.

Turning to the reform of the our,foreign policies.serve peace people's minds, stabilize the economic structure, Li said the and development, the acting economy, extend the reform and core of the overall structural premier said. put it at the centre of all reform is the revitalization of The next day, Vice-Premier Yao undertakings. enterprises — especially large and Yilin delivered a report on China's Yao stressed the need to medium-sized state enterprises — draft plan for national economic increase and improve the supply of through in-depth reform. and social development for 1988 goods by expanding and accelerat• Li said China will open wider to to the session. ing reform and to ensure a the rest of the world, speed up the Yao, who is also the minister in sustained growth of the national ^growth of an export-oriented charge of the State Planning economy at a relatively quick pace economy in the coastal jegions Commission, said China scored on the basis of improved economic and take an active part in world fresh achievements in both performance. commerce and competition. construction and reforms in 1987 Deputies also heard a report by On the question * of the and its economic situation is State Councillor and Finance reunification of the nation, he generally good. Minister Wang Bingqian on the reiterated that the general and "We should analyse the useful implementation of the state specific policies of the Chinese experience and new characteristics budget for 1987 and on the draft government relating to Hong in economic development and state budget for 1988. Kong and Macao will not change. reforms," he told the session. Wang said the 1988 draft state The mainland welcomes more But he added that there still budget estimates revenue at 255.45 Taiwan visitors, business people exist unstable factors and pro• billion yuan and expenditure at and entrepreneurs, he said. blems in the economy. "The 263.45 billion yuan, leaving a On foreign affairs, Li said outstanding one is the excessive deficit of 8 billion yuan. China has opened up new rise in commodity prices." He called for further efforts to prospects in foreign relations He said the basic principle for increase production, cul costs, thanks to "important achieve• the country's economic work in raise revenue, reduce and control ments" in the past five years. "All 1988 is to further emancipate expenditure and improve enterpr-

6 HBBIJIDKG REVfEW," jStPRIL 4-10, 1988 ises economic efficiency. It is also imperative to cut back group purchasing power and keep expenditures within the country's financial capacity, Wang said. •

CPPCC Committee Opens First Session

he first session of the Seventh T National Committee of the Chinese People's Political Consul• tative Conference (CPPCC) opened in Beijing on March 24. The meeting is scheduled to elect the chairman, vice-chairmen, LI SHENGNAN secretary-general and standing Li Xiannian presides at tlie opening ceremony of the first session of the Seventh committee members of the National Committee of CPPCC. National Committee. Delegates participate in and supervise Hong Kong and Macao, as well as were also invited to attend, as non• government decision-making pro• with overseas Chinese. It main• voting participants, the first cedures. The proposals have tains friendly ties with political session of the Seventh National drawn attention from many organizations in more than 20 People's Congress (NPC), which concerned government insti• countries in Asia, Europe, Africa opened one day after the CPPCC tutions, the National Committee and Oceania. session. work report said. The opening of the CPPCC In his work report on behalf of A CPPCC Proposal Handling session was presided over by the Sixth National Committee, Committee has worked closely President Li Xiannian. General CPPCC Vice-Chairman Qian with the office of the Standing Secretary Zhao Ziyang of the Xuesen said that the CPPCC — Committee of the NPC (China's Chinese Communist Party Central with its 7,661 proposals to the parliament) and the General Committee, Acting Premier Li government on political, Office of the State Council, Qian Peng and Chairman Peng Zhen of economic and social affairs in the said. the NPC Standing Committee past five years — is playing an were in attendance, and diploma• indispensable role in the country's As the country's largest ad• tic envoys of various countries development. visory body, with representatives were present as guests. • from all political parties, people's Its many working committees organizations and religious and groups have worked with groups, as well as prominent CPPCC members and people from individuals, the CPPCC's ad• Scientific Worli all walks of life, getting them visory and supervisory role has IViust Get Priority involved in state affairs and taken root in the country, he problems concerning people's added. livelihood. With a membership of 350,000, cientific and technological The CPPCC has maintained the CPPCC has been expanding its Swork must be given top contact with government insti• local organizations at city and priority in China's economic tutions and carried out investig• county levels. About 94 percent of development strategy. Acting ations. These activities have the country's cities, counties and Premier Li Peng said at the closing yielded suggestions and proposals districts under municipalities have ceremony of the national science dealing with all aspects of the CPPCC branches. About 64 and technology work conference. country's life, including postal percent of the CPPCC's members More than 400 scientists and service, environmental protection, are members of non-Communist officials attended the conference, the exploitation of mineral parties or people with no party which was held March 8-11 in resources and education. affiliations. Beijing. The meeting discussed the Making proposals is an import• The CPPCC has also extended major tasks for scientific and ant way for CPPCC members to its contacts with people in Taiwan, technological work for the next 10

BEIJING REVIEW. APRlL,4,-t(!llira88 •1 m EVENTSARENDS

or more years. has entered the world market. titions, or merge with more In a speech to the conference. There are currently more than successful institutes. Research Song Jian, state councillor and 1,100 technological development institutes should become more minister in charge of the State and exchange centres across the independent and competitive. Science and Technology Com• country. Song said. By last year, Song said. mission, said that the reform of the 100 research institutes had closely Other major tasks facing research management system is integrated their work with that of scientists in the coming years the most important task facing enterprises. include updating traditional in• research workers today. Only The reforms have also increased dustries with new technology, through reforms can scientific the mobility of scientific personnel speeding up the development of research work be promoted and as well as the flow of technical high technology and further industry encouraged to apply new knowledge, he added. Last year, developing the "spark plan" to and sophisticated technology. 360,000 technicians took leaves of popularize science and technology Song said the recently approved absence from their research in China's rural areas. economic development strategy institutes or colleges to work in A basic plan for the develop• for coastal areas is a significant enterprises or rural areas. ment of science and technology for policy for the country's overall tiie next 10 years is being worked Still, many problems remain to economic development and urged out by the State Science and be solved. Acting Premier Li scientists to use their talents to Technology Commission and warned in his speech that China help develop an export-oriented other departments concerned. The will fall further behind developed economy. This is one of the major programme, which will be sub• countries if it fails to appreciate tasks for scientists in the near mitted for approval to the Party the full importance of scientific future, he said. Central Committee and the State advances and to catch up with Council, is expected to serve as a Research institutes and insti• them. We should have a sense of guideline for scientific policies and tutions of higher learning should great urgency about this, Li said. legislation. • organize scientists in a systematic Also speaking at the conference. way to run enterprises in coastal State Councillor Fang Yi said that areas, or get them to start co• China has 8.86 million natural operative projects with local science researchers but the old China Moves to enterprises to develop products management system still hampers Wipe Out Leprosy which are in demand abroad. initiative. He said scientists willing to Scientists should be encouraged hina aims to eliminate leprosy contract township enterprises or to participate in enterprise Cby 1997, the centenary of the to run non-governmental scient• management and organize re• first International Leprosy Meet• ific research institutes in coastal search programmes. Fang said. ing, says Dr. Ma Haide (George areas should be encouraged. They should also be allowed to Hatem). president of the China Major inland cities and military hold two or more posts at the same Leprosy Association and industrial departments should time and earn extra pay for their Foundation. also organize their staff scientists labour. Speaking on February 15, at a to co-operate with coastal enterpr• A contract responsibility system gathering held after China's first ises in developing an export- will be introduced into research Leprosy Day, Ma said the number oriented economy. Song said. institutes engaged in technological of patients suffering from the The minister reviewed the development and applications. disease has declined to about progress in the reform of the Song said. The responsibility 70,000 from 500,000 in the early research management system, system will link the interests of 1950s. Some 85 percent of the which began in 1985. The reforms, research institutes and scientists sufferers have been cured. which involve commercializing with their contributions to Leprosy has existed in China for and marketing technology and economic development. Contract• more than 2,000 years. After the revamping the system of allocat• ing, leasing or transferring founding of the People's Republic, ing funds, have brought about property rights will be allowed the government launched a large- improvements, he said. between research institutes and scale struggle against the disease. In recent years, business volume enterprises. A national network for the at technology fairs has grown Institutes which arc poorly prevention and cure of Leprosy rapidly. In 1987 the figure reached managed or operating at low has been set up by the Ministry of 3.35 billion yuan (about USS90() efficiency will be able to replace Public Health, with the partici• million). Some of the technology managers through open compe• pation of every province, autono-

s BF.TJING REVIF.W. APRIL 4-10. 1988 mous region and county. Weekly Chronicle Army. The equipment has a total Hundreds of thousand of specia• value of about US$4.6 million. lists have devoted their efforts to (March 21-27) Similar emergency wards in the cause. other hospitals in Beijing and In 1985 the China Leprosy POLITICAL Chongqing will also be equipped Association and Foundation was March 23 with instruments donated by the set up to carry out technical • At a meeting in Beijing with Italian government. training and spread knowledge Vasil Bilak, a member of the about the prevention and treat• presidium of the Central Commit• CULTURAL ment of the dread disease. tee of the Czechoslovak Commu• Recent years have seen re• nist Party, Zhao Ziyang, general March 22 markable advances in leprosy secretary of the Central Commit• • A national association for therapy. Outpatient treatment has tee of the Communist Party of newspaper management is replaced treatment in isolation. China, says that .since we have founded in Beijing. The use of three kinds of medicine successfully established a socialist The association, which aims to as advocated by the World Health system in China, our next task is to modernize the management and Organization (WHO) has replaced eliminate poverty. administration of the nation's single-medicine therapy all over China should adopt all policies 1,500 newspapers, has accepted the country. And rehabihtation and measures conducive to the 126 newspapers as founding treatment is bringing new hope to elimination of poverty and members. 130,000 deformed and crippled backwardness, Zhao says. people who have been cured of the • An official of the State SOCIAL disease. Council's legal bureau says the Last year, the association council plans to work on drafts of March 23 decided to set aside the last 37 laws and 176 sets of • According to the Ministry of Sunday of January, International administrative regulations this Civil Affairs, the marriage rate in Leprosy Day, as Leprosy Day in year. China in 1987 was 17.2 per China. Party and state Leaders Hu The draft laws involve the thousand people. The divorce rate Qili, Chen Muhua, Huang Hua inspection of import and export was 1.1 per thousand, up 0.1 per and Zhou Peiyuan attended the commodities, taxation of foreign thousand over the previous year. gathering held to disscuss China's investment enterprises, maritime About 1 million couples applied efforts in the field. disputes, standardization of for divorces last year and 581,000 Chen Muhua told the gathering weights and measures, and city couples obtained them. that the prevention and cure of planning. Marriages decided by the leprosy is not only a medical couple themselves accounted for problem but also a social problem. ECONOMIC 20 percent of marriages last year She urged all of society to support while those arranged by a go- the association's work. March 23 between accounted for 70 percent Participants praised Dr. Ma for • China's industrial output has and those by parents for 10 his contributions to the country's posted an average annual increase percent. efforts in the leprosy field. Ma, of 15.3 percent during the past five who came to China in 1933 from years. March 25 the United States and became a • The death toll in the serious Chinese citizen in 1949, has The State Statistics Bureau head-on train crash which occur• devoted himself to preventing and reports that output value totalled red in Jiading County on the curing leprosy since the mid- 1,378 billion yuan (about US$370 outskirts of Shanghai at 2:20 pm 1950s. He has conducted investi• billion) last year, with light and on March 24 reaches 28, including gations all over China and has heavy industry sharing similar one Chinese and 27 Japanese treated patients himself. rates of growth. tourists. Ma described leprosy as a sign The trains were the No. 311 of ignorance and backwardness. March 24 from Nanjing to Hangzhou and He thinks that with the perfection • The Sino-Italian friendship the No. 208 from Changsha to of China's medical and public emergency ward, equipped with Shanghai. health network and a system to medical instruments donated by About 100 passengers aboard countinuously monitor the dis• the Italian government, opens in the trains were injured in the ease, China will be able to Beijing's general hospital of the accident, the cause of which is eliminate leprosy. • Chinese People's Liberation under investigation.

BEIJING REVIEW, APRIL 4-10.1 • INTERNATIONAL ••••••••••••••

Socialist Party has grown stron• ITALY ger, inter-party conflicts have intensified. The larger parties are forced into actions aimed at Government's Resignation Accepted gaining the co-operation of the smaller ones.

President Francesco Cossiga has accepted the resignation of One of the characteristics of the coalition government after a bitter dispute between ruling Italy's political system is that the Christian Democrats and their Socialist partners. government's power is severely limited by Parliament. All govern• mental policies, foreign as well as talian Prime Minister Giovanni Goria had to deal with many domestic, must be approved by I Goria submitted the resign• knotty issues since he took office Parliament, which can put mo• ation of his coalition government last July. The decision to dispatch tions on policy to the government. on March 11. President Francesco warships to the Persian Gulf, the Because governmental power is Cossiga accepted the resignation dispute over religious education in shared by the coalition parties, all with "reservation." the schools, the question of government policies have to be It was the third time in less than referendums on nuclear power collectively discussed and decided eight months that Goria had tried stations, the controversy over in cabinet meetings. This system to resign. His previous bids — one judicial responsibilities, and es• limits the power of prime minister, last November and the other in pecially the parliamentary debate whose suggested policies can be February — were rejected by Pre• on the 1988 finance and budget aborted if they are rejected by any sident Cossiga on the grounds that bills — have all caused rows one of the several parties in the the 1988 finance bill and state among the coalition parties and coalition. budget had not yet passed in become obstacles to continuing The complexity of Italy's Parliament. co-operation. parliamentary procedure also This time the Christian Democ• As the Christian Democrat prevents the government from rat prime minister decided to Party conference approaches, the implementing policies. The Senate resign after a bitter debate in power struggle within the party and Chamber of Deputies, whose Parliament over nuclear energy has intensified. One of the factions internal structures are similar, policy. The Socialist Party, one of was trying to replace Goria as have a total of 965 members. A the five in the government prime minister with Ciriaco de proposed law can wait for months coalition, condemned Goria for Mita, the party secretary. Several or even years before it can be forcing a majority of the cabinet to Christian Democrat members of pushed through. For example, the go along with a decision to Parliament secretly voted against 1988 budget, which provoked the complete the construction of a the finance and budget bills. Goria government's previous nuclear power plant. Controversy Postwar Italy is unique in the attempts to resign, took five over Goria's action threatened to frequency of its changes of months to gain approval because lose him the majority in government. The reasons lie in the the various coalition parties Parliament. country's political system. There suggested more than 1,000 But observers say the resign• are many parties and factions in amendments. In addition, because ation was actually caused by the Italy, which has a population of Italy's Parliament permits both increasingly sharp contradictions only 50 million. As many as 13 open and secret voting, proposals within the Christian Democrat parties have seats in Parliament approved in open voting are often Party, the largest in the coalition, but none enjoys the majority. vetoed in a secret ballot because of and the intensifying power Since Italian law says a party conflicts among different parties. struggle among the coalition must have a parliamentary However, it is noteworthy that partners — Social Democrats, Re• majority to form a government, all the frequent changes of Italian publicans and Liberals plus postwar Italian governments have governments have not led to Christian Democrats and Socia• been coalitions of several parties. serious policy misfortunes or lists. The parties are collaborators Generally the divergent interests economic losses in the country. in action rather than political of the coalition parties eventually Instead, it is in the context of the allies, and the coalition was widely lead to the dissolution of the frequent changes that Italy has regarded as a "government of government. As the Christian shed its economic backwardness programme" with a weak Democrats and Communists have to become the fifth largest foundation. declined in influence, and the economic power among the

10 INb'REVIEW. 'APRIL 4-10, 1988 Western countries, surpassing instability." Some do not even ence because they favour different Britain in gross domestic product. regard government resignations as solutions to the problem. Italians seem to be used to the a crisis. . Because of the economic situation, calling it "stability in by Yan Lin and Ke Dong interdependence of debtor and creditor nations, the OAU believes that the solutions of the debt problem should be based on AFRICA international co-operation, cont• inuous dialogue and flexibility.

OAU Group Discusses Debt Conference The OAU contact group sees the projected international confer• The Organization of African Unity contact group recently ence as a forum for dialogue and met to discuss a proposed international conference on African negotiations between African debt. But the group may have a tough job persuading the debtors and their creditors from the developed world. The group continent's creditors of the need for the conference. proposed that various interest groups also be encouraged to join in free and frank talks on the debt he 12-member contact group of Africa's common position on the crisis. Tthe Organization of African debt crisis are understandable Unity (OAU) held its first meeting because the continent's debt But analysts say there are two in Lusaka on March 20-22 with situation is turning from bad to major factors working against the the aim of preparing for a worse. OAU's conference proposal. First, many creditor countries proposed international conference Official statistics show that maintain that there is no need for by working out a framework for Africa's debt increased from an international conference on dialogue with Africa's major US$169 billion at the end of 1985 Africa's debt crisis — debt pro• creditors. to about US$200 billion by the blems should be considered on a Algeria, Congo, Tanzania, end of 1986. That amounted to 44 case-by-case basis. They argue for Nigeria, Mali, Sudan, Senegal, percent of the continent's gross case-by-case solutions because Madagascar, Egypt, Zambia, domestic product and was nearly African countries have differing Zimbabwe and Zaire each sent double its total export earnings. debt profiles and structure. their foreign affairs or finance Based on the current trend, Second, some creditor countries minister to the meeting. The economists project that Africa's are against a debt conference ministers suggested that the total debt will increase to US$360 exclusively for Africa. They say international conference should billion by 1990 and US$550 billion any conference should include seek commitments for immediate by the year 2000 if comprehensive debtor nations from around the debt relief measures. measures are not taken to deal world. But analysts agree that the with the crisis. OAU will be hard put to get the These two factors will make it creditor nations to take part in Analysing the seriousness of the tough for the OAU to persuade crisis, Zambian President and such a conference. the creditor nations to rally to its OAU Chairman Kenneth Kaunda African countries have already conference call. Observers say the warned at the recent meeting that made their position clear. It OAU contact group plans to meet Africa is facing a debt crisis which includes calls for a suspension of the World Bank and other urgently needs to be addressed. external debt servicing for 10 years international financial agencies, Otherwise, he said, the continent starting this year, new con• the European Community and will be engulfed in political cessional loans with 50-year other developed nations, the upheavals, the effects of which maturities and 10-year grace developed nations will not be able Group of 77 developing countries periods, and limits on debt service to escape. and debtor countries outside of to a bearable percentage of a Africa to win support for the nation's export earnings. This The international community, conference. position was adopted last Novem• and the developed countries in OAU officials hope these efforts ber at a special OAU summit in particular, are well aware of the will build on the groundwork they Addis Ababa. seriousness of the crisis, but they set for the conference at the Analysts say the objectives of have responded poorly to Africa's contact group meeting. the international conference and call for an international confer• by Chen Hegao

BEIJING REVbJ^W, APRl:l4!4;-:)pi,|iip^^ m INTERNATIONAL

ing has surpassed the total earnings from sugar exports. MAURITIUS The Mauritian government has taken advantage of the country's Tiny Country Makes Economic Strides natural attractions — the sea, sunshine and sandy beaches — to develop the tourism industry. The In the 20 years since its independence, Mauritius has government encourages invest• gradually shaken of/economic backwardness and diversified ment in tourist facilities by its economy. Today it is one of the most developed countries of offering investors preferential Africa. loan and tax treatment. The country has also improved tourist services and increased air service ien Mauritius became inde• former cane fields now are used to by adding new planes and opening Wpendent within the Com• grow maize, potatoes, vegetables new air routes. monwealth on March 12, 1968, it and fruits. These farm products Last year, Mauritius held its had a weak, single-product have not only satisfied domestic first international sea festival. economy. The 2,000-square- needs but have also brought about Tourist earnings reached a record kilometre island country in the great economic benefits. Some of high of 1.6 billion rupees and Indian Ocean, east of Madagas• the products have replaced 213,000 tourists visited the car, today has a population of 1 imports, thus saving foreign country. million people. Its economy has exchange, while others are ex• The government is currently suffered from its small domestic ported to earn foreign income. investing 850 million rupees to market, shortages of natural The government also encourages expand the international airport. resources and funds, and back• private investment in animal The Chinese government, which ward technology. husbandry to boost the produc• has developed economic co• tion of cattle, sheep and pigs. In But statistics for last year show operation with Mauritius, pro• 1987, Mauritius produced 12 that total output value averaged vided funds to help in the percent of its meat and dairy USS1,600 per capita. The inflation construction of a 15,150-square- requirements. rate dropped to 1 percent and the metre airport terminal, which is average monthly wage rose to Mauritius has also benefited now in use. USS220. The economy grew at an greatly from the development of The economic development of annual rate of 6-7 percent for the an export processing industry. In Mauritius shows that small past two years. 1987, 530 factories with 90,000 country with inadequate resources Mauritius currently boasts a employees were engaged in export can prosper through its own stable domestic market. Its foreign processing, earning 6.7 billion persistent efforts and an appropri• trade balance has improved, as has rupees (about US$515 million). ate economic strategy. its international balance of Net income from export process- by Du Hui & Xu Zhi payments. Its deficit has been reduced and foreign exchange reserves have risen. Overall THAILAND investment has grown.

These successes can be at• Investment, Exports: Key to Success tributed to a rapid and decisive In recent years, the Thai economy has developed rapidly and adjustment of the economy and to steadily. Some people predict that Thailand may become measures that were taken to reduce and control expenditure. Asia's fifth economic ^'dragon" after South Korea, Taiwan, By developing better ways to Hong Kong and Singapore. exploit its sugar-cane resources and improving cane yields, hailand boasts a healthy percent. And last year it expanded Mauritius has kept up the output Teconomy. From 1981 to 1985, 5.6 percent, compared with the and export earnings of its the Thai economy grew at an world average of 2.8 percent. traditional sugar-cane industry average annual rate of 5.3 percent. Industrial development has while transferring cane fields to In 1986, a year when many been particularly strong, with the other crops. To get away from a countries' economies contracted, building materials, transport single-product economy, many the Thai economy grew 3.6 equipment and export sectors

12 BEIJING REVIEW. APRIL 4-10, 1988 growing most rapidly. Industry projects in the interior of the expanded at a rate of 9.7 percent country. 5 WEEKLY last year. At the same, the government Non-stop Industrial growth offset the pledged that it would not Direct Service to harmful economic effects of last nafionalize any project that had year's drought. Crop output was received approval. It also said it reduced by 3 percent and forestry would not set up competing state- production by 1.2 percent. But owned enterprises or restrain the fishery output increased 5.9 sale of the goods within the percent and animal husbandry 5.1 country, and it would introduce percent. preferential tariffs on the equip• Exports are growing. The gross ment, raw materials and other SHANGHAI (SHA) and value of Thai exports last year supplies necessary for the projects. BEUING (PEK) with reached 285 billion baht (about US$11.4 billion), up 23.1 percent In the past two years, as the over the year before. But the value United States, Japan and other connections to all of imports also increased. Gross developed countries have sought domestic points in import value in the first 10 months to adjust their industrial structure, of 1987 totalled 268.7 billion baht, and investors have been trying to a rise of 32.9 percent from the shift their money abroad, the Thai CHINA corresponding period a year government has speeded up the procedures for examing and earlier. The most frequent carrier approving foreign investment on the US-China route. Foreign exchange reserves proposals. Last year, the govern• totalled USS5.2 billion, up ment approved 596 foreign USS1.4 billion from 1986. Prices investment projects, with a total Three flights a week from remain basically stable, with an registered capital of US$2.6 New Yorl< every Thursday, Sunday inflation rate of 2.2 percent. billion, most of it from Japan and and Wednesday There are many reasons for the Taiwan. rapid development of the Thai The second major reason for One flight a week from economy, but two are considered Thailand's rapid economic devel• Los Angeles every Friday to be the primary ones. opment is the government's First, the government has been strategy of promoting an export- making continuous efforts to oriented economy. Thailand is Five flights a week from attract foreign investment. The basically an agricultural country. San Francisco favourable global investment Its exports used to consist mainly every Thursday, Frijjay, Sunday, Monday and Wednesday situaton and Thailand's own of primary agricultural and mine advantages have helped in this products, which were sold at low endeavour. prices and brought in little foreign New York: (718) 656-4722 Thailand can be seen as an ideal exchange. or (212) 371-9898 place for investment. It has many In the early 1970s the govern• Los Angeies: (213) 646-8104 cheap but skilled workers, excell• ment began to adjust its economic or (213) 384-2703 ent services and infrastructure, and industrial structures and to and has been developing steadily vigorously develop the export San Francisco: (415) 877-0750 in the political, economic and sector. This effort has paid off In or (415) 392-2156 social spheres. 1961, industrial products accoun• CAAC the national airline of A law passed in 1983 en• ted for only 4 percent of the People's Republic of courages foreign investment in Thailand's gross export value. China with 5 direct flights projects which will benefit Last year the figure was 37.9 weekly will give you a taste Thailand's international balance percent. For the past three years of the real China the of payments, exploit natural the export value of industrial moment you come aboard. resources or increase employment products has exceeded that of opportunities. The law also agricultural products. The idea of encourages projects which could increasing exports and gaining result in energy savings and those more foreign exchange has taken which produce substitutes for hold among the Thai people. imporicd energy, as well as by Xiao Wei

BEIJING REVIEW. APRIL 4^10. 1%S 13 Mi ARTICLES The Contract System on the Rails

The Chinese raiiways employ 3.2 million people and have fixed assets worth 100 billion yuan. This huge industry has been implementing an overall contract system for two years, and the results are becoming clear. The delegation of managerial powers to lower levels and adjusting the relationship between the state, the collective and the individual have breathed new life into the railways. by Our Correspondent Li Rongxia

here are 52,611 km of railways billion passenger count, 23 percent Locomotive building. The Minis• T in China, including 11,186 km more than during the Sixth Five- try of Railways has 34 rolling of double-tracked lines, carrying Year Plan period (1981-85), and a stock plants. It is envisaged that 71 percent of China's freight and freight volume of 7.1 billion tons, during the Seventh Five-Year Plan 56 percent of its passengers. The an increase of 22.4 percent from period, 2,260 diesel and 830 new contract system, which was the previous five-year plan period. electric locomotives, 116,000 set on its railway track in March A total of 2.2 billion passengers freight and 10,860 passenger 1986, dispenses with the old- and 2.692 billion tons of goods carriages will be built. In the last fashioned state monopoly which were carried in 1986 and 1987, an two years, manufacture of these centralized management annual average increase of 88 four categories of stock has risen and revenues, and seeks to make billion tons/km, or 28 percent, by an annual average of 29, 32, 14 the railway departments inde• over the Sixth Five-Year Plan and 9 percent respectively. pendent economic entities. period. Of the new freight volume, Extra capacity. New railway lines Although the contract system 80 percent was carried on the busy covering 10,156 km, including has been widely practised in large trunk lines in east and northeast double-track and electrified lines, slate-owned enterprises, the rail• China. The number of freight will be built during the Seventh ways are pioneering a very large- trains loaded every day rose from Five-Year Plan period, reaching scale implementation of the 60,000 in 1985 to 70,000, easing 1,400 billion tons/km. In the past overall contract system. The some of the pressure on the two years, a total of 1,181 km of railway networks in China are railways. railway track were laid, 892 km of inter-related and operate under a unified plan and timetable, hence Vice-Premier Wan U (left) cliatting with Director Yang Qiliua (centre) on an the scale of the experiment. The inspection tour of the Guangzhou Railway Bureau. LUO JINSUI railways are vital to China and in need of more dynamism: hence the contract system. It works something like this. Working on the principle of putting power where the interests and responsibilities lie, the Ministry of Railways makes a contract with the State Council; the targets are then the goals of the 12 railway bureaus and 56 sub- bureaus, the railway sections, stations and workers. Rewards and penalties are built in.

The Contract System

Carriage. The Seventh Five-Year Plan (1986-90) envisages a 6.4

14 Bgi(^(N<} REVIEW. APRIL 4-10, 1988 construction. But in 1986 and 1987 the railway departments earned 50.05 billion yuan and the state netted 3.1 billion yuan in tax. Safety. In the past two years, railway accidents dropped. How• ever, three serious accidents occurred in quick succession in January this year, killing 140 people. The investigation team organized by the state confirmed that the most serious of these accidents, where a train was derailed and overturned, was due to negligence. The accident led to the resignafion of the Minister of Railways Ding Guangen. The contract system has brought tangible • benefits to railway workers. In 1987 the ' XUE CHAO The chief conductor of the No. 15 Beijing-Guangzhou train attends to passengers. average per-capita wage of railway personnel was 1,867 yuan, a 27.1 percent increase over 1985. double-tracked and 490 km of has been levied, and all extra In the past two years, a total of electrified on contract. The rate of profits are retained by the railway 1.87 billion yuan was spent on railway construction was higher in departments. Most of the profits building housing for railway the last two years than the average retained are used for production workers. Houses of 8.59 million for the previous five years. and the rest for collective welfare square metres have been com• Double-tracking was 23.5 percent projects, wage increases and pleted, improving the living higher. Efficiency also increased. bonuses. In 1985, before the conditions of the workers. Last year, 649 more freight and 57 contract system was instituted, more passenger trains than in 1985 railway departments earned 21.4 ran on China's railroads every billion yuan, of which 8.12 billion Guangzhou Railway Bureau day. yuan were turned over to the state Capital construction and re• as tax and the state, in return, Staffed by 150,000 people, the vamping. During the period of the allocated 8.04 billion yuan to the Guangzhou Railway Bureau was Seventh Five-Year plan, a total of railway departments for railway the first to implement the overall 43.265 billion yuan will be raised for capital construction and for The ioading and unloading capacity of Guangzhou's Nanzhan Railway Station is the purchase of locomotives from 15,000 tons a day. The picture shows the container-handling area. XUE CHAO after-tax profits as required by the overall contract system. In 1986 and 1987 a total of 18.33 billion yuan was invested in capital construction, 24.1 percent more than in 1984 and 1985. The funds have been utilized efficiently. Last year, estimated costs for the six major capital construction pro• jects fell from 6 billion to 4.5 billion yuan. Distribution of profits. Formerly, 85 percent profits were handed over to ihe state treasury and all construction funds allocated by the state. Since the introduction of the new system, a proportional tax

BEIJING REVTSW, APRfL'ii-i&?^i*>fe:i^' 15 m ARTICLES

tion of the contract responsibility system, her train began increasing its service, hoping to attract more passengers. "We are doing a good job, and hence getting more bonuses," she said. The contract system has also boosted the technical upgrading of the railways. The Guangzhou- Shenzhen Railway runs all the way to the Luohu Bridge before linking up with the Hong Kong railway. The Hong Kong railway was double-tracked and electrified in 1983. To promote the moderni• zation of the Guangzhou- Shenzhen Railway, the State Council approved the establish• ment of GSRC and its new system in January 1984. The system dictates that GSRC contract system, and remarkable In 1987, the Guangzhou will pay taxes and, with its 1983 successes have been scored. Railway Bureau had a total payment to the state (20 million Yang Qihua, director of the income of 1.98 billion yuan; this yuan) as the base, deliver profits to Guangzhou Railway Bureau, is a was 14 percent more than 1986 the state at progressive increases good manager. He deploys his and in excess of its target. The of 2.32 percent a year. All the rest workforce well, and is very bureau handed taxes to the state of the profits are retained. enterprising. People nickname and accumulated funds to the In the four years from 1984 to him "Yang the Bold." Ministry of Railways to tailing 1987, GSRC completed the Energy shortages have plagued 366 million yuan and retained 557 electrification and double- Guangdong's growth while north million yuan for its own tracking of the Guangzhou- China's coal was piling up en construction. The average income Shenzhen Railway. In the meant• route. Engineer Zhao Langu was of its employees was 8.3 percent ime, the state allowed GSRC to experienced and able in drafting more than the year before. charge a freight rate 50 percent schedules and management. How• higher than the national rate. ever, he was working in a low post The contract system introduced for a long time under the old cadre A Good Example by GSRC in 1984 paid off quickly. system. Then he was found and The company's cash income was promoted to chief engineer by In introducing the contract 35 percent higher in 1984 than the Director Yang. Zhao improved system, the Guangzhou Railway year before; in 1985 it rose by 93 the trains' routes and redesigned Bureau was inspired by the percent, and in 1986 it rose by a them to increase their efficiency so successful reform of the staggering 135 percent. In 1985, that the freight transported by Guangzhou-Shenzhen Railway GSRC's per-km freight income each train could rise from 2,000 to Co. (GSRC). In January 1984, was 4.3 times higher than the 3,000 tons, equivalent to an extra GSRC was set up as an national average; the cash income capacity of 15,125 trains each day; independently managed business. earned by its staff was 8.5 times the and the number of coaches drawn It was a great success. national average. by each locomotive could go up I took a GSRC train to It was the successful experience from 14 to 20. Thus, 25 extra Shenzhen on Christmas. The of GSRC that prompted China's coaches could be added to the train, air-conditioned and non• railway industry to extend the route between Changsha and smoking, had soft comfortable contract system in 1986. Guangzhou; that represents scats. Compared with trains in the 580,000 more passengers annu• rest of China, this one was much ally. After examining his pro• more spacious and cosy, and the Changes in Freight Station posals, the bureau's technical attendants were very efficient. department deemed them all According to the chief conductor The Nanzhan Railway Station feasible. Lu Ximai, 30, after the introduc• in Guangzhou covers 200,000

16 ^BEIJING REVIEW, APRIL 4-10. 1988 square metres and is the largest rail-freight station in south China. It used to be notorious for the backlog of cargo which piled up there. In 1985 the station introduced the contract system. Now, everything is kept in order and work is done very efficiently. Station head Zhu Mingchu said that the state used to be in charge of the station budget before, and gave all the workers automatic, fixed payments. "Now our station is responsible for its performance, and that is reflected in the remuneration of our employees," Zhu said. For the fulfilment of the A corner stall In Guangzhou Railway Station market. XUE CHAO contracted targets, Nanzhan adopted new loading, unloading and storing systems. For example, include a 5.3 percent tax rate, with "Diners not only include passen• each carriage is now loaded with all the rest of the profits being gers but also people wanting a 29 tons of cargo compared to 22 retained totally for the construc• good meal out. Many hold tons before. This produces a tion of railways in Hainan Island. farewell feasts here for their Hong saving of 1,000 carriages a year. The Hainan Railway Co. will Kong and Macao friends." The turnover rate in the contract to build the 188.2-km The railway station also runs a warehouse has been shortened Chahe-Haikou Railway, which hotel with 204 luxury and from three days to two. will link five major ports and 11 medium-priced beds and 200 cities and counties in the western cheaper beds. The station-run stores sell more than 1,200 kinds Railway Construction part of the island. The railway will link up through rail-ferry services of goods including electrical with Zhanjiang, Guangdong Pro• appliances, garments, medicines, The contract system has also vince, thus integrating Hainan's cigarettes and wines. Some of the brought benefits to railway railway with the rest of China. stores also help with delivery of construction. The project to Estimated investment totals 340 larger goods such as refrigerators double-track the 526.6-km million yuan. and bicycles. Hengyang-Guangzhou section of In the entertainment centre at the 2,313-km Beijing-Guangzhou the station, transit passengers can Railway, a transport artery Tertiary Industry dance, watch video-tapes and running across China north and listen to music while sipping tea. south, began in 1978. Due to lack With more decision-making After their trip in Guangzhou of investment, only 55.1 km of the powers, railway departments are last September, two Taiwanese railway had been double-tracked improving the services provided journalists said that the Guang• in the eight years up to 1985. by their business. That side alone zhou Railway Station is backward When the contract system was netted the Guangzhou Railway in many ways, but the range of its introduced into China's railway Bureau 63.95 million yuan in services is not matched anywhere industry in 1986, the project was profits last year, 59.2 percent more in Taiwan. contracted out to the Guangzhou than in 1986. The business purview of the Railway Bureau. In the last two Without leaving the station, Shenzhen Railway Station is wider years, over 233 km were double- passengers now are able to eat, still. In addition to commercial tracked, with the remaining 243 spend the night, shop and be business, it co-operates with local km scheduled to be double- entertained. tourist companies in sponsoring tracked before the end of this year. The four-storey restaurant in tours, and with road-transport In 1987 the Guangzhou Rail• the station caters to about 10,000 companies in organizing train- way Bureau set up the Hainan diners a day. "The quality of food truck transport. These services are Railway Co., which enjoys even we serve is excellent," said He spreading to many parts of more preferential terms. These Liying, manager of the restaurant. Guangdong. •

BEIJING REVIEW, APRIL.4-i(!lliI888 17 1 i mm ARTICLES

DISCUSSIONS Contract System in China's Enterprises The contract responsibility system granting more decision-malting power to enterprises and linking remuneration with performance has been successfully adopted in many factories. But opposition to the system still remains.

by Zhou Xiaochuan*

he contract system of responsi• corresponding reforms were im• varying economic results, no Tbility has been widely adopted posed on administrative organi• unified price rules and tax rates by enterprises vital to the zations. Now, in a new attempt to can be applied to all enterprises. country's national economy. Car• implement the contract system Therefore, contracts between ried out at various levels, it has and grant more decision-making administrative bodies and their been related to what is called power to enterprises, people subordinate enterprises are the "administrative decentraliza• expect to see significant micro- only form practical. tion." Under the system, an economic results and effective (5) Competent managers can administrative body defines spec• decentralization. be selected on the basis of bids for ific tasks -or responsibilities for To safeguard against myopic contract targets. subordinate administrative bodies behaviour on the part of enter• or enterprises under it, whilst prises, the terms of a contract granting them more managerial usually extend over 3 to 5 years, Opposing Views rights. giving both sides ample time to Enterprises using the contract meet their promises. But econo• (1) The contract system does system must bear the responsi• mists still differ on the efficacy of not really lead to the separation of bility for meeting production the contract system. ownership from management. On quotas, taxation and profit the contrary, administrative inter• targets. The higher administrative vention may become even more body on the other hand is Arguments for the System closely linked with enterprise responsible for ensuring that the operations. market environment and other (1) It separates management (2) It could allow some ineffi• production conditions remain frorri ownership, thus giving more cient enterprises to continue to basically stable in subsequent decision-making power to operate at a low standard which years. enterprises. would obstruct the rational re• The government admits that (2) It stimulates enterprise and structuring of enterprises and differences will exist between promotes production growth, render it impossible to make enterprises in terms of economic which, in turn, increases supply economic results coincide with the results and this factor will be and solves (or eases) the problem pace of reform. of an imbalance between supply considered when drawing up the (3) With the distorted system of and demand, creating a more contract requirements. All enter• pricing and taxation, improve• favourable environment for re• prises are allowed to select or ments to an enterprise's economic forms to the other aspects of the create a contract form suitable to results does not necessarily bring economic structure. their own circumstances. about a more rational allocation In the later phase of the first (3) It ensures benefits for of resources. The idea • that round of industry decentrali• enterprises and safeguards them imbalances in the macro-economy zation, some decision-making against strong social reacdons or can be corrected through the power granted to enterprises was political risks that price and tax contract system is unrealistic. If actually recentralized, because no reforms may incur. (This also the central government does not implies that all potential benefits strengthen its control over total to enterprises lie in their economic demand, it is unlikely that there success.) * The author is a member of the State will be any real improvement in Commission for Restructuring the (4) As China is a big country the conditions needed for the Economic System. and enterprises operate with such reform of the economic structure.

18 BEUtt*^ RtVIEW, "APRIL 4-10, 1988 Minority Areas in Sichuan

Sichuan Province in southwest China is inhabited by 4.2 million people of a dozen or so ethnic groups including the Yi, the Tibetan, the Qiang and the Lisu, which together account for 4.2 percent of the province's total population. These minority people live in a 320,000-sq km area, half the province, which boasts extensive pastures and dense forests and is rich in resources. In Songpan and Nanping counties in northwest Sichuan, Huanglong and Jiuzhaigou are well-known scenic spots and are attracting domestic and foreign tourists with their unique beauty. The special traditions and ancient culture of the Tibetan, Yi and Qiang minority villages enchant the visitor. (hv our staff writer and photographer Xue Chao) A Tibetan girl.

Changhai Lake at the Jiuzhaigou scenic centre.

(4) Since supply and demand simply delays the outcome. Many tax and tariff protection should be are constantly changing, the contracts recently signed in China guarded against. elimination of intervention by are due to expire in 1990, and there • Enterprise management and administrative bodies is impos• exists considerable pressure to ownership should be separated sible. Such intervention leads to extend the contracts, which will from government administration. endless amendaments to the mean vital reform programmes State ownership of enterprises contract demands, over which will have to wait. could be visualized in terms of both parties will haggle, and owning shares through financial harbours bureaucracy and institutions other than banks. corruption. These institutions could under• Improving the System take responsibilities such as social (5) Competent managers are security and social welfare, which not so easily selected through the • Pricing reform is urgent and are now borne by the enterprises bidding' system. •• Since target inevitable in the current economic and which have impaired rational bidding is based on an uncertain reform. Short-term reform mea• behaviour on the part of forecast of future world and sures for enterprises should not enterprises. domestic markets and government become obstacles to future pricing • Regulated by rational tax• regulations, appraisal of a man• reforms. Enterprises should seek ation, tariffs and progressively ager can be made only on the basis market input and set prices for reduced subsidies, Chinese enter• of his or her performance in their own products. The freedom prises should have more auto• competition. to do so is very important to the nomy to restructure their internal (6) Attempts to decrease future decisibn-making rights of organization and management. uncertainty through the conve• enterprises. The government does not need to nience of contracts and target • If political considerations involve itself too much in reforms bidding may create a tendency to require delays or postponements at the enterprise level, nor does it accept old methods of mandatory to pricing reforms, the taxation need to worry too much that the planning, fixed prices, fixed system should be more active in deepening reform in enterprises interest rates and fixed exchange industrial policies to adjust may affect state revenue. rates in direct contradiction to distorted prices. • The key problem in China's hopes for further development of • The government should enterprise reform is to create a market mechanisms and indirect adopt a policy of progressive competitive environment. To regulation by the government. subsidy withdrawal from ineffi• achieve this, the problem of (7) Enterprises will still display cient enterprises within a set pricing should be solved, a sound myopic behaviour when their period. This will sfimulate enter• market mechanism developed, the contracts approach expiry. Ex• prises to improve their perfor• mode of administrative decen• tending of the terms of the mance and provide a check against tralization changed, and progress contract does not provide a further low standard operations. towards foreign trade reforms solution to the problem, but Deceptive signals stemming from should be stressed. •

New Trend jn Enterprise Reform by Li Dewei, Jiang Jinyong and Gai Jlanling from tiie Policy Research Office of the State Economic Commission

ince the publication of a theory Several years later a new socialist the means of production, the S on share economics by Amer• enterprise system — a system of labour force and techniques, take ican economist Weitzman in 1984, combined production element on the value of shares and draw many enterprises in America and management — incorporating all dividends. Great Britain adopted a new the advantages of the contracting, Under this system, shareholders system of sharing profits which leasing and sharing systems was elect a board of directors in charge produced good results. The idea implemented in China's Hunan of policy making and appointing basically represented reforms to Province. Under this system, all the enterprise directors or man• the capitalist distribution system. production elements, including agers. The director responsibility

BEIJING REVIEW.^/APRIL 4'tQi 19gflu.'U! 19 •1 ARTICLES system is adhered to under the of expanded reproduction. The the means of production directed leadership of the board of balanced development of the into production varies according directors. national economy requires that to profits, but the wages of Under this system, income from the production elements invested workers are constant and unaf• labour means labour shares (Vo) in a certain period and the results fected by the success or failure of and labour dividends (L), labour these factors give rise to are the enterprise. The contradiction shares being the basic wages suitable to the following period; between floating investment and earned by workers according to there will be no waste or supply set wages inevitably leads to an their particular jobs. The labour shortages. Consumption is not imbalance between production shares (L) are equal to P'5Vo (P' is seen as the final stage of and consumption, supply and the actual rate of profits and d the production, but an important demand, and results unemploy-' regulating coefficient). If the aspect of reproduction, the ment, supply shortages and enterprise runs at a loss, both the reproduction of the labour force. inflation. workers and the owners of the But in the past the means of The elimination of these means of production are production was always regarded contradictions requires that the responsible. as the rriain factor governing the owners of all production elements, The system of combined labour force in the processes of including the owners of the means management of production ele• production, exchange, distri• of production, labour and tech• ments is based on a new economic bution and consumption. This is a nique, invest equally according to theory of pluralistic production monistic view of the economy in actual social needs. The result will functions. According to this which production is directly be a pluralistic production theory, the national economy can related to willingness on the part function economy, a system of be viewed in a new light as a of the owners of the means of combined production element system made up of all production production, rather than the labour management in a micro-economic elements in a continuous process force. Furthermore, the level of form. •

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20 BEIJING REVIEW, APRIL 4-10, 1988 i

TIBETAN-INHABITED AREAS Demographic Changes

"Beijing Review" (No. 33, 1987) carried an article on population growth in the Tibet Autonomous Region. The following article will mainly deal with demographic changes in Tibet and other Tibetan-inhabited areas. — Ed. by Ma Rong and Pan Naigu

ost of China's Tibetans M inhabit the Tibet Autono• mous Region. The rest are scattered throughout several other nearby provinces. We conducted a study of demographic changes in Tibetan-inhabited areas, the re• sults of which disqualify accus• ations by the Dalai Lama and others against China's population policy on Tibetans. Tibetan-inhabited Areas. His• torically, the Tibetan Tubo Dynasty, which coexisted with the Tang Dynasty (618-907), included Tibet, Xikang and the southwest of Qinghai. These areas gradually developed into the three major parts of China inhabited by Tibetans. They are Tibet (includ• ing Anterior and Posterior Tibet and Ari in the present-day Tibet Autonomous Region), Kang (otherwise known as Kemu, including the two Tibetan Auton• omous Prefectures in the west of Sichuan, the region of Qamdo Prefecture in Tibet, and Diqing Prefecture in Yunnan), and Ganqing (including south of Gansu Province and most of Qinghai Province) Tibetan areas. Each area has its own distinct Tibetan dialect — Weizang. Kang and Anduo. From the 13th to early 20th centuries, both the Kang and Ganqing Tibetan areas were ruled

Ttic authors are researchers at the Institute of Sociology of Beijing University. A Lhasa street.

BEIJING REVIEW, 'APRIL 4'MJ 1988 m ARTICLES

Major Tibetan-Inhabited Areas in China lation. This largely accounts for the inaccurate population esti• mations. It is therefore groundless for foreign scholars and news agencies to refer to the Dalai Lama as the leader and spokes• man of "six million Tibetans." When the first national census was conducted in 1953, the Tibetan population in Tibet and Qamdo Prefecture could only be estimated. However, the census was conducted at the county level for other areas, so the figures were accurate. , The total Tibetan O / population in the whole country • I was then 2.77 million strong, of

1 1 whom about 1 million were in Tibet (not including the 274,000 I Tibetans in Qamdo Prefecture). Tibetan-inhabited areas This figure was calculated on the basis of a report of the Tibet local by the central government under million. This increased to 3.87 government, which, at that time the tusi system. In Tibet, on the million by 1982, according to the under the Dalai Lama, raised no other hand, the central govern• census at that time. objections to the statistics released ment appointed the local master The Dalai Lama clique claims after the census. It was not until preacher of Buddhism and there are more than six million 1962 that the Dalai Lama, in exile Wangjue (as in the Ming Tibetans. Even if all Tibetans in in India, claimed the Tibetan Dynasty), conferred the title of south Asia are counted this claim population totalled between seven Dalai Lama and Bainqen Lama is still a wild exaggeration. An and eight million. and established the local kasha estimated one miUion Tibetans Democratic reforms were car• government (as in the Qing live in India, Nepal, Bhutan, ried out in the Tibet Autonomous Dynasty). The three areas were Sikkim and Kashmir. Region in 1959 after the rebellion also under the administration of Since no population surveys was quelled. The cruel slave central government commis• were conducted in Tibet before system and backward productive sioners based in Tibet, Sichuan 1960, accurate figures are unavail• forces existing before had greatly and Xining (capital of Qinghai) able and there is a lack of repressed population growth. A respectively. knowledge of the Tibetan popu• growth in population was natu- Statistics from the 1982 na• tional census show that Tibetans are to be found in all the 29 Hans in Tibetan-inhabited Areas provinces, municipaHties and (unit: 10,000) autonomous regions of China, although 99.8 percent of the 1953 1964 1982 country's Tibetans live in Tibet, Sichuan, Qinghai, Gansu and Tibet Autonomous Region Yunnan. There are 10 Tibetan (including Qamdo) — 3.7 9.2 autonomous prefectures,' two Six autonomous prefectures in Qinghai 4.0 30.6 50.4 Tibetan autonomous counties and Haixi Autonomous Prefecture 2.7 8.7 21.3 one Tibetan autonomous town• One autonomous prefecture and one ship in these four provinces (See autonomous county in Gansu 15.5 23.7 37.5 table). Two autonomous prefectures and one Tibetan Population. According to autonomous county in Sichuan 20.3 36.6 52.0 statistics from the first national One autonomous prefecture in Yunnan 2.8 3.3' . 5.0 census in 1953, the total Tibetan Total 42.6 97.9 154.1 population in China was 2.77

22 BEIJING REVIEW, APRIL 4-10, 1988 This indicates that a large number of Hans in the Tibet Autonomous Region are public servants, doctors, teachers and technicians who, after a few years of employment in Tibet, return to the inner provinces. The evidence clearly shows that there has been no sharp decline in the Tibetan population since the peaceful liberation of Tibet in 1951. The accusation that "more than one million Tibetans have been massacred," made by the Dalai Lama in his Five-Point Statement to the United States Congress in September 1987 is totally unfounded. Yet, this statement was quoted as fact in the "Resolution on the Tibetan University students of Tibetan nationaiity. Question" approved by the American Senate on October 6, 1987. Han Population in Tibet. rally expected after the reform. and other unforeseen events affect Several estimates have been made But an increase from 2.77 million the age distribution of a outside China for the number of to 7 or 8 million within a few years population. Mass death within a Hans in Tibetan-inhabited areas. is hardly feasible. certain age group would result in Some set the figure at more than The Tibet Autonomous Region an obvious gap in the population 4.5 million; the Dalai Lama claims was covered by official registra• spread. But age distribution in there are 7.5 million Hans in Tibet, tion during the national census in Tibet as indicated in the Chart and that Tibetans have become a 1982. The total Tibetan popu• does not reflect this. Quite the minority. The facts refute all these lation, according to the census contrary, the age distribution of claims. figure, was 3.87 million. Of this Hans is unusual: most Hans are in A number of Hans and people number, 1,786,544 were in Tibet the 25-29 year-old bracket, and of other ethnic groilps were (including Qamdo), an increase of only a small number are under 14. already living in Tibetan- more than 510,000 persons compared with 1953 figures. The growth rate of the Tibetan Han Population Age Tibetan Population population in other areas was even 65 + 85,341 higher with an increase of more Hans 91,384 4.9% than 580,000. Tibetani 1/64,600 94.7% 50,441 Other Elt^nic Groups 7,639 0.4% The 1982 national census 940 63,451 covered all 147 counties^ and Total 1,863,623 100% 2,095 73,847 provided information on ethnic 4,310 composition and population den• 83,535 sity in all Tibetan-inhabited areas. 6,069 91,645 The average population density in 6,487 99,317 China in 1982 was 105 people per 10,997 [ 105,315 square kilometre. Tibetan- 15,213 25-29 121,249 inhabited areas have the lowest 9,670 148.878 9,301 population density, with less than 187,690 I two persons per square kilometre. Anyone with even the most 25,739 653,880 limited understanding of de• mography will recognize that ,Tab(e I: Age Distribution of Horn and Tlbatoni in ttw Tib«t Autonomovs Rvgion deaths from war, natural disasters (An odditionol 2B.000 people were not included in IIM 1982 cenius, but were Indirectly counted.)

BEIJING REVIEW.VA'PRIL 4,-10,Uesa 23 67.1 percent, Hans 26.9 percent and other ethnic groups the remaining 6 percent. Obviously, the Dalai Lama's statement that "Tibetans have become a minorils in Tibet" is a total fabrication (See chart). Of all the Tibetan-inhabited areas, the six autonomous pre• fectures in Qinghai registered the most rapid growth in the Han population (totalling 460,000). The population in the Haixi Mongolian-Tibetan Autonomoii- Prefecture in particular reached 200,000. Few people had ever been to the Qaidam Basin within the prefecture's territories, but after 1949, tens of thousands of Han workers travelled to the area to tap the natural resources of the Salt Lake and to open a lead and zinc mine. Thereafter, tens of thousands more workers came to build the Qinghai-Tibet Railway. In the city of Karmu alone there are 70,000 Hans. Some of them are miners whose work has greatly promoted the development of the local economy, and some are responsible for transporting hundreds of thousands of tons of goods, such as food, cloth, daily necessities and construction

MA JINGOlU materials, into Tibet each year. Moving into a new building. The construction of this Tibetan-style building was funded by a district government in Lhasa. According to 1986 statistics, the total number of Tibetans in the Tibet Autonomous Region was inhabited areas in 1949 when the there. Usually they will return to 1.93 million. The Han population People's Republic was founded. their original provinces after a stay was only 73,000. Most of this The 1953 census showed that, in of only a few years. number were sent to help develop addition to the 1.5 million The number of Hans in various the local economy and stimulate Tibetans, there were also more Tibetan-inhabited areas increased scientific, educational and cultural than 430,000 Hans and 220,000 from about 430,000 in 1953 to 1.54 advancement. The Dalai Larafa's Mongolians, Qiangs, Lis and million in 1982 (See Chart); while accusation that more than seven people of other national minor• the number of Tibetans increased million Hans have moved into ities in the 10 autonomous from 2.77 million to 3.87 million. Tibet is an unreasonable misrepre• prefectures in Qinghai, Gansu, In the Tibet Autonomous Region sentation of the true situation. • Sichuan and Yunnan provinces. in particular, Tibetans made up Educated and technically 94.4 percent of the total popu• trained people were encouraged lation in 1982; Hans only by the government to work in accounted for 4.8 percent; and the Tibet to help develop the local remainder comprised other ethnic ' Including the Haixi Mongolian, groups. Of the total population in libctan and Kazakh Unilcd AiitDnomous economy and culture. Yet, due to PIC Ice lino. the climate and high altitude, most the country's Tibetan-inhabited - Including Iwc) county-level cities and of these people take turns to work areas in 1982, Tibetans made up three county-level districts.

24 BEIJING REVIEW, APRIL 4-10, 1988 Restructuring Maanshan's Government by Yang Xiaobing & Cheng Gang The machine-building bureau is and retain or strengthen those one example. It contolled all the promoting indirect control over aanshan, on the lower city's machinery factories. It was enterprises. The plan was revised M reaches of the Changjiang administratively under the city several times and approved by (Yangtze) River in east China's government and financially under provincial leaders in January last Anhui Province, is an industrial the leadership of the provincial year. Its gradual implementation city developed in the 1950s as one machine-building department. It was started last March. of China's major iron and steel also received orders from the The city's number of govern• production centres. With a former Ministry of Machine- ment bodies was cut from 46 to 30 population of one million, the city Building Industry, renamed the and employees from 1,127 (not has developed rapidly since the State Commission of the Machin• including 156 temporary workers) nationwide economic reform of ery Industry in 1987. The bureau to 1,028. The organizations the late 1970s. In the spring of had to convey all directives from retained are the planning com• 1986 the city became one of 16 the organs above it to the mission, economic commission, chosen by the State Council to enterprises under it. No body but structural reform commission, restructure their government the state was responsible for the urban and rural construction and bodies on a trial basis. The profits and losses of these environmental protection com• programme has begun. enterprises. All enterprises ate mission, science and technology "We believe reforms to the from the big pot of the state. These commisssion, educational com• economic structure will inevitably enterprises also had to cope with mission, sports commission and lead to reforms in the political overlapping government admini• family planning commission re• structure." said Zhou Yude, stration, complicated procedures sponsible for planning, policies mayor of the city. "The ongoing and low efficiency. It took one and co-ordination; the financial restructuring of government wool mill in the city six months, bureau, taxafion bureau, pricing bodies is one aspect of this reform. rushing from one administrative bureau, personnel bureau and The main objective is to streamline body to another to apply for a audit bureau responsible for administration, delegate more plot of land, and had to get 90 regulating and overseeing power to the lower levels and passes before the application was economic activities; a foreign change the government's direct approved. affairs office in charge of administrative control over enter• In the early 1980s China began international exchanges; and an prises into indirect economic and reforms to develop a socialist industrial and commercial bureau legal control. This has a profound commodity economy, systemati• responsible for private economic effects on economic cally delegating more decision• activities. development." making power to enterprises and The machine-building bureau, Indirect Control introducing the factory the light industry bureau and six manager/director responsibility other administrative groups — the In the past under the highly system. These moves cut right electronics, textiles, metallurgy, centralized planned economy, the through to the original admini• chemical, building materials and city, like many others in the strative system. To meet the foodstuff companies — were done country, maintained strict control changes some administrative away with. The economic com• over enterprises and basically organs became companies. But in mission took over the regulation assumed all managerial power in effect they still used the old and administration of enterprises the areas of production planning, administrative means to control under them. The commercial capital utilization, product alloc• enterprises and held back from bureau, the cereals and oils ation, material supplies and delegating decision-making power bureau, and the supply and personnel organizations. This to the enterprises. "marketing general co-operative caused confusion over what In May 1986 the city govern• have been replaced by the responsibilities fell on the govern• ment began to draw up a plan to commercial and trade commission ment and what on enterprises. As restructure government bodies while the agricultural and forestry a result, the city government had and reorganize government fuc- bureau, the water conservancy to set up many administrative tions. It decided to abolish all and power bureau and the rural organs to control the thousands of administrative organs which exer• enterprises bureau were replaced enterprises. cise direct control over enterprises by the agricultural economic

BEIJING REVIEW. /VPRIL 4-ip,|Ig^8 25 m ARTICLES commission. 720 government employees, the own profits and losses and to give In line with the principle of city government conducted them management autonomy. In separating Party and government numerous studies and made the past enterprises had to acquire functions, the city Party commit• recommendations to the units on the approval of responsible tee has also restructured its the professions and capabilities of bureaus to co-operate with organizations. these people. The majority of them enterprises in other places. This is "The restructuring of govern• are satisfied with their new jobs. A now unnecessary. Some trans- ment organs has progressed very survey of the 400 reassigned staff regional companies, such as the quickly," Mayor Zhou said. "New in the industrial and communic• Taibai Wine and Drinks Com• organizations have already started ations units indicated that 95 pany, have already been es• normal work. We thought the percent were happy in their new tablished in the city. reform might lead to a temporary jobs and were accepted well by drop in production but in fact, the their new units. The first group of Minimized administrative inter• enterprises have increased their five people transferred to the ference and the reduced number of production levels." industrial and commercial bureau administrative bodies have greatly contributed to attaining man• Last year the city's total were on average 51 years of age agerial independence in enter• industrial output value rose by 14 and distinguished themselves in prises and improved their effici• percent and it handed over to the market management skills. ency. Wu Dongyuan, director of state 30 million extra yuan in the Magnetic Materials Factory, taxes. said his workers were pleased with Situation Changed the move to close down the electronics industry company Personnel Organization "Great changes have taken above it, because it ended the place since the reforms were duplication of many procedures. Reforms to the government implemented," Mayor Zhou said. In the past the factory needed structures involved reassigning "In the past, the city government approval from above for any duties for 720 people. Of this exercised direct control over technological upgrading using its number, 47.1 percent were enterprises. As soon as the own capital. Last year the factory transferred to grass-roots units government offices opened for used 10,000 yuan on updating a set and enterprises; 26.1 percent were work in the morning, people of gas kilns and cut its energy assigned to the newly established started coming in for rolled steel consumption by 32.7 percent, commissions; 4.3 percent were and other things. We were kept saving 250,000 yuan a year. Now transferred to local governments busy every day just trying to deal that the factory has management in the city's four districts; 3 with them and were constantly autonomy and is responsible for percent were sent to strengthen faced with a myriad contradic• its own profits and losses, its statistics, banking, audit, taxation tions. Since the introduction of employees are concerned about and industrial and commercial indirect control we have learnt to how to protect this autonomy by administrative organs; and 5.5 administer through economic and legal means. "The greatest percent were assigned to research legal means which saves us a lot of problem we face now is finding an or work in city government effort. Enterprises can now go ideal legal adviser," said the departments. About 14 percent directly to the markets for rolled director. were retired. steel and approach banks for "In the past the city government loans. Of course, some inefficient Chen Xuechun, director of the streamlined its various units directors are still coming to us for Maanshan Instruments and several times, but nothing was help. But the biggest problem is Meters Factory, said that in the done about organizing their that provincial organizations still past his factory got raw materials functions," said Wu Gang, an need to be reformed. New organs from the former machine-building official with the city's structural will have trouble dealing with bureau and produced goods reform commission. "As a result, provincial organs." according to its directions. the number of city government Luo Xixian, deputy head of the "Since the bureau closed down, organizations was not reduced city's economic commission, said we have to do everything by rather it swelled. This time the his commission now has no power ourselves," said Chen. "In the process involved changes to the to organize personnel or allocate beginning, we were not used to functions of government units. It materials. Its main task is to offer this. But the factory needed to be • is a real streamlining." better services to enterprises, to developed, and this required a Before reassigning duties to the make them responsible for their joint effort from the workers." •

26 BEIJIXG RjEVIBW, APRIL 4-10. 1988 I

FACTS AND FIGURES 1987 Retail Price index Rises 7.3%

by the State Statistical Bureau

ast year China's retail price recreational goods and services in the prices of raw materials for L index rose 7.3 percent. In 1986 rose by 2.5 percent, newspapers farm and sideline products, caused it rose 6 percent and in 1985, 8.8 and periodicals by 1.4 percent. a rise in industrial costs and the percent. That is a 23.6 percent The price of medicines and factory selling prices. A survey of increase in three years, an average medical instruments and services the ex-factory prices of manu• annual rise of 7.3 percent. The went up by 4..6 percent and fuel by factured products showed that the increase in urban areas was higher 3.6 percent. price of means of production than in rural areas: 9.1 percent and — The retail price of agricul• increased 7.8 percent and of means 6.3 percent respectively. The tural means of production in• of subsistence 8.4 percent last figure is still higher in larger cities creased 7 percent. The price of year. and is over 10 percent in some. diesel rose by 6.7 percent, small IVIarket prices badly managed. farming tools by 5.5 percent, and A higher starting point. The The prices of goods brought in .plastic sheeting by 22.6 percent. retail price index in 1986 rose by 6 from elsewhere are always higher The prices of chemical fertilizers, percent. In December it was 6.2 than local goods. Cheating also insecticides and sprayers increased percent higher than in December takes place: bad quality goods sold by different degrees. 1985. The 1987 rise started from a as good, short weighing and high take-off point. Demand outstripped suppiy. disguised price rises. A wide spread. Last year many In the last few years purchasing commodities' prices rose, espe• power has grown following an This year the government has cially foodstuffs. increase in industrial and agricul• adopted some powerful measures — The retail price of food in tural production. By the end of to control the rise of market 1987 rose 10.1 percent. The price 1987 the savings deposits of city prices: of meat and eggs rose 16.5 percent; and township residents amounted 1. Measures to control the vegetables 17.7 percent; aquatic to 300 billion yuan, 80 billion yuan increase In expenditure. As products 1.7 percent. Food price (30 percent) more than at the end reforms are conducted in enter• rises contributed 64 percent of the of 1986. Some non-staple foods prises, efforts must be made to index's total. and household goods were in short improve management in a scien• — The retail price of clothes supply. The supply of pork, sugar tific way, cut the consumption of rose by 3.5 percent. That of high and eggs has been rationed again raw materials and raise productiv• quality cloth and popular gar• in the state stores of the big and ity in order to increase production ments increased by big margins, medium-sized cities. and improve the supply of goods. pure knitting wool rose 18.1 Rise in the purchasing prices At the same time it is necessary to percent, bengaline quilt cover 14.9 of farm and sideline products. In control the growth of expenditure percent. Clothes price rises 1987 various localities raised the as production grows. contributed 8.2 percent of the contracted purchasing prices for 2. Measures to improve the general rises. grain, cotton, oil-bearing crops supply of non-staple foods In big — The retail price of household and other agricultural products, and medium-sized cities. goods rose by 6.1 percent, especially pigs, and increased the Through the integration of urban affecting not only small articles of proportion of purchases made at and rural areas, of commerce and everyday use but also some daily negotiated prices. The purchasing agriculture, and of industry and necessities. The retail price of soap prices of farm and sideline agriculture, a number of non- increased 9.2 percent, toilet paper products increased 12 percent last staple food production centres will 7.2 percent, iron pans 15.6 year. All this increased farmers' be set up and existing ones will be percent. The price rises for income, their purchasing power consolidated and expanded in household goods contributed 9.6 and their demand for industrial order to increase the supply of percent to the general price index goods. non-staple foods. rise. 3. Measures to strengthen Rise in the prices for key management of market prices. — The retail prices of other industrial raw and processed Disguised price rises and un• consumer goods also went up last materials, fuel and power up. planned price rises should be year. The price of cultural and This, combined with the increase controlled. •

BEIJING REVIEW, AAPRIL 4-ia,lllBSa 27 m FROM THE CHINESE PRESS

about 700,000 people died. But the Service Industries Need Development country has only 11,000 beds for these patients. housing problems go, urban "LILUN XINXI BAO" At the end of 1986, China had residents pour out endless (Theoretical Information) only 0.5 telephones for every 100 grievances. people in the urban areas or a total According to statistics compiled of 2.5 million subscribers. This in 1984, the number of retail was far less than the world average ccording to statistics collected shops, dining facilities and other of 14 telephones per 100 people. Aby the World Bank, people service institutions dropped to The business volume of the post employed in service industries about 1.26 million in 1978 from 55 and telecommunications service accounted for 15 percent of the million in 1952. The number of increased 39 fold from 1949 to work force in low-income coun• employees decreased by 37 1983. But the number of post tries, 34 percent in medium- percent. After great efforts, the offices less than doubled. Each income countries and 56 percent in number of retail and eating places post office serves about 20,000 developed countries in 1980. But and other service institutions rose people, compared with the global in China the service industries to about 3.83 million in 1982 and average of 3,000 to 4,000. employed only 12 percent of the 6.60 million in 1983. From 1949 to 1979 funds for work force in 1984. The figure was According to 1982 statistics, the cultural facilities accounted for lower than that for Laos, country needed t.l billion yuan a only 0.4 percent of country's total Bangladesh and Sudan; China, year .to repair houses that are expenditure, and investment in Kenya and Zaire tied for 107th directly administered by govern• this field represented only 0.2 place in the world. The contri• ment housing departments. But percent of state spending for bution of China's service indus• the departments can collect only capital construction. In the 1980s tries 10 gross national product 450 million yuan a year in rents. most areas have not increased the (GNP) dropped to 18 percent in As a result, about half of the allocations for developing culture 1983 from 21 percent in 1978, 29 houses were in disrepair and 30 and cultural facilities. Some 80 percent in 1957 and 28 percent in million square metres of housing percent of China's theatres were 1952. are considered dangerous. built before liberation or during China's State Statistical Bureau Moreover, 1984 statistics show the 1950s and have long been out reported that the country's total that since the founding of the of repair. social product (TSP) in 1986 was People's Republic of China in Because of obsolete equipment, 1,877.4 billion yuan. Of this total, 1949 the state had built urban China's publishing trade is far industry accounted for 1,115.7 housing totalling 1.1 billion behind the times. Most typesetting billion yuan, or 59.5 percent; and square metres in fioor space. If and bookbinding are still done by agriculture for 394.7 billion yuan, per-capita floor space in urban hand and it takes a year or more to or 19.5 percent of the total social areus is to average 6 to 8 square produce a book. product. The contribution of the metres, an additional 400 to 500 (January 18, 1988) service industries to the TSP in billion yuan of investment are China was far less than 29 percent, needed in housing construction. the average for low-income Medical experts have estimated countries. In developed countries, that deaths among emergency and Diseases Insect service industries were already serious cases in the emergency accounting for about 60 percent of wards of the country's hospitals Threaten Forests the total social product in the represent about 50 percent of the 1970s. country's total number of deaths Underdeveloped service indus• in hospitals because of the "JINGJI CANKAO" tries cause many difficulties for shortage of beds. In the whole of (Economic Reference) Chinese people when they try to China there are only 100,000 buy goods, ride buses and find obstetrical beds, which can hold a accommodation. Clothing shops maximum of 5.4 million women a he soul-Stirring forest fire that have a limited selection of year. Each year, however, more T occurred in northeast China's products, foodstuffs are manu• than 17 million babies are born Heilongjiang Province last spring factured in a rough and slipshod and about 5 million women need remains engraved on Chinese way, buses are crowded, especially birth-control operations. There people's minds, arousing sharp during the rush hours, and traffic are 1 million new cases of vigilance. But, we must not low'er jams are frequent. As far as malignant tumours each year and our guard against tree diseases and

28 !r%f£HING REVIEW, APRIL 4-10. 1988 insect pests, which are doing great improve the quality of tleecefiowers was discovered by a damage to Chinese forests. afforestation. 33-year-oId farmer when he was According to statistics from (February 3, 1988) building a road near an old China's Forestry Ministry, the temple. Later, the pair of plants forest area affected by tree was bought by a young worker. diseases and insect pests has been A Strange Couple The plants are standing up increasing every year. Today one- Of Medicinal Plants straight. Each of them has a head, quarter of China's afforested areas four limbs, five sense organs, and is affected. About 2.67 million soles on its feet, all of which are hectares of pines are infested by true to life. The "male" plant is 22 pine moths. Poplars and kiris have "RENMIN RIBAO" cm tall and weighs 0.6 kg. The also been seriously harmed by (Peoples Daily, Overseas Edition) "female" plant is 19 cm tall and plant diseases and insect pests, weighs 0.55 kg. Their shoulders with more than 330,000 hectares are 9 cm in width, the sole of the of them being destroyed in China pair of tuber fieeceflowers, foot is 5.5 cm in length and the top every year, leading to a loss of 10 A which look exactly like a of the head is 6 cm in width. Their million cubic metres of wood. For human couple, were recently bodies are covered with fibrous many years, the area of forest discovered in Yongshun County, roots like fine hair on a human affected by tree diseases and insect Hunan Province. body. The difference between pests has been about three times The tuber fleeceflower (Poly• them is that the "female" plant has the area damaged by forest fires. gonum mutiflorum) is an import• a pair of breasts that protrude 3 To protect China's forestry ant ingredient in Chinese medi• cm. reserves and the environment of cine. In Compendium of Materia Many old people say it is the forest plants and animals, and to Medica. Li Shizhen (1518-93), a first time they have seen a pair of rapidly develop the forest famous doctor of the Ming tuber fieeceflowers which bear economy, experts have suggested: Dynasty, explained the use of the such a strong resemblence to — Strengthening quarantine plant and called it "fairy grass." human beings. measures for imports. Foreign tree The unique pair of tuber (January 21, 1988) diseases and insect pests are easily brought into China through imported timber and seeds, as well as wooden packing boxes used for imported products. Everyone must be aware of the importance of quarantine measures to protect China's forests, and the depart• ments of forestry, communic• ations, foreign trade and tourism should strengthen their work in this area. The quarantine depart• ments must be told immediately if tree diseases and insect pests appear in places which are open to imports and foreign visitors. — Isolating plant diseases and insect pests. Timber and tree seeds from forest zones that are seriously affected by tree diseases and insect pests must not be transported to non-affected zones. More nurseries for healthy young trees hould be established. • — The authorities at all levels must pay careful attention to research on the prevention and control of forest diseases and the elimination of pests in order to •i BUSINESSARADE —^—•

as well as being one of the most China Reforms Foreign Trade System important aircraft manufacturers in China. In recent years, the n order to speed up the course of aims to encourage local and company has concluded contracts I China's opening up and foreign-oriented enterprises to with the United States, Canada, participating in the international compete on an international level, Italy and France for producing 13 economic arena, the Chinese make full use of their labour spare parts for five types of government recently decided to resources to develop labour- aircraft with imported raw reform its existing foreign trade intensive and labour- and materials and supplied designs. system. The main reforms include: knowledge-intensive businesses. It Another three Chinese factories — Implementing a system of also encourages production using are also producing standard spare foreign trade based on contract imported raw materials and the parts for the Boeing company. and management responsibilities. assembling of parts supplied by Given China's production poten• Provinces, autonomous regions foreign businesses. tial and technology, the US and municipalities directly under To safeguard the interests of company is expected to allow the Central Government, and foreign investors, the Chinese China to produce the fuselage for some large cities will contract government has reaffirmed that 737 aircraft. • quotas with the government for local branches must strictly foreign exchange earnings to be implement transfer agreements handed over to the state. The and contracts signed between import and export of a small foreign trade and industrial and Police Attend number of commodities will still commercial trade companies and Traffic Exhibition be contracted and managed by import and export corporations foreign trade and industrial, and and foreign clients. • commercial import and export everal thousand traffic police• corporations. Some industria;l and S men from over 200 large and commercial corporations will also medium-sized cities of China implement the contract and Xian iVIakes Tails attended the 1988 Multinational management system. Urban Traffic Conference and — Reforming planned systems For US Boeing Exhibition (MUTRACONEX'88) of foreign trade to further reduce in Beijing in mid-March. the amount of export commodities he first batch of Boeing 737 The exhibition displayed the under unified state control; a small Tvertical airplane tails made by latest traffic technology and number of commodities will be China's Xian Aircraft Manu• equipment from more than 30 imported through import and facturing Co. for the US Boeing businesses in France, Britain, export corporations, but most Civil Aircraft Co. was delivered to Yugoslavia, the United States, import and export goods will be the US side on March 11, and will Austria, Australia, Japan, the managed by local foreign trade, be shipped to Seattle in June. Soviet Union, Italy, Spain and industrial and commercial import In April 1984 the Xian company Hong Kong. The equipment and export companies, and signed a contract with the US included traffic signals, tele• production enterprises. Import Boeing Company for processing communications gear, monitoring and export commodities con• the product, with a total of 1,175 systems, and vehicle testing and trolled by the state are limited by parts each, according to design driver training equipment. Repre• quotas or import or export with imported raw materials. The sentatives of the Beijing Public licences. size of the orders has already Security Traffic Administration — Reforming the foreign ex• doubled since last December, from and Beijing Institute of Traffic change control system to improve 100 sets to 200 sets. The contract Engineering were very interested distribution. Since the beginning was valued at US$29.9 million, in products and technology from of this year, all localities, state- accounting for 50 percent of the these foreign businesses. and collectively run enterprises Xian company's total foreign The display for Britain's Plessey and institutions, and foreign- contract value. According to the took centre stage in the exhibition. funded enterprises have been contract, all products will be The company with the Beijing allowed to make up one another's completed and delivered by July Public Security Traffic Administr• needs for foreign exchange 1992. ation has set up a traffic signal through foreign exchange regu• The Xian company is the first control system in Beijing's eastern lation centres. company in the world to produce district. Put into operation last The new system of foreign trade vertical airplane tails for Boeing, November, the system catered for

30 '»eijmO R^IEW, APR1L4-I0, 1988 a 20 percent increase in the traffic this batch of forklifts, to the value On the completion of ground capacity over a 15 square- of 4.486 million yuan, is expected construction, land-use rights may kilometre area with 39 crossroads. to be delivered before the end of be mortgaged, transferred, sold, Plessey"s Walter Lo said his this year. sublet, and also inherited. After company is still conducting co• Early this year, China provided the full payment of land rents, operative feasibility studies with the USSR with models of this kind land-use rights may also be other cities including Beijing of forklift and the warm response mortgaged to Shanghai banks as (northern, southern and western to the product allowed the two bank loans. districts), Shanghai and Shekou. countries to conclude a prelimi• The Shanghai Hongqiao In central Beijing, a traffic nary agreement on technology and Economic and Technological control system covering 45 square price. Development Zone is a new kilometres with 53 crossroads was The agreement was concluded development zone established put into operation on March 19. through the Heilongjiang Foreign with a view to encouraging foreign The installation was the result of Trade Corp. Currently, Poland, trade. It covers 65.2 hectares and is co-operation between the Chinese Hungary and Bulgaria are also located in the west of Shanghai, and Yugoslavian governments, trying to enter into barter trade 5.5 kilometres from the intern• with the main facilities supplied by with China through the ational airport and 6.5 kilometres ISKRA of Yugoslavia. corporation. • from the city centre. Planned The Chinese government re• construction is geared to overseas portedly invested US$3.88 million trade, tourism and function in the above two projects and is Land-Use Rights centres, and a residential centre is expected to invest 40 million yuan also on the drawing boards. At in traffic control systems to be set Transfer Bids present, the work on roads, water up in Beijing's western, northern supply, sewage, gas and tele• and southern districts. The British hina is expected to lease out its communications has been government is showing an interest Cfirst piece of land through completed. in this project and plans to offer international bidding. At the Nine Sino-foreign joint ven• some loans to fund it. bidding meeting on March 22, tures, and co-operative and state- The exhibition, one of the some 243 bids were issued and 78 run projects have already been largest of its kind in the world for have been taken by foreign approved. The investment totalled the past few years, was sponsored businessmen from the United USS482 million, US$210 milHon by the China International States, Japan, Australia and Hong of which is foreign investment. Conference Centre for Science and Kong. The bidding is scheduled for 10 Technology and Beijing Institute The 129-hectare plot in the am, July 2, 1988 in Shanghai. • of Traffic Engineering. It has No.26 base of the Shanghai already won the approval of Hongqiao Economic and Tech• News in Brief international authoritative nological Development Zone has organizations and is expected to already been designated ready for • According to customs sta• be held once every two years in lease. tistics, in the first two months of China. The land is well suited for this year, China's imports and Li Ning complexes such as office build• exports amounted to US$10,924 ings, hotels and apartments. billion, an increase of 18 percent Bidders may buy the entire plot or from the same period last year. Of China Exports subdivisions, but priority will be this total, imports accounted for given to bidders for the whole plot. US$5,513 bilHon, 11 percent more Forklifts to USSR The lease is 50 years. After that than the previous year. point, extensions will be another • The International Excellent n export contract for Chinese- 50 years. Design Products Exhibition will A made battery-operated fork- At the close of last year, the be held in Beijing in June. On lifts to the Soviet Union was Shanghai government issued pro• display will be more than 1,000 signed in Shenyang, capital of the cedures for the transfer and lease new products for daily use, northeastern province of Liaoning of land-use rights. In accordance including household electrical on March 12. The contract marks with these procedures, the max• appliances, clocks and watches, the first export of Chinese imum lease is set at 20 to 50 years. recreational and sporting goods, machine products to the Soviet After this point, except in special arts and crafts and hardware, Union since 1959. cases, extensions may be applied from European, North American Under the terms of the contract. for. and Asian countries.

BEIJING REVIEW,.'/>VPKIL iM^dW 31 m CULTURE/SCIENCE

Dance Drama Brings Legend to Life

nce upon a time, on the Erdus the Erdus Song and Dance typical landscape of Inner Mon• O grassland of Inner Mongolia Ensemble presented a new pro• golia. The folk customs, the there lived a beautiful girl named duction, the dance drama Sen• religion and culture of the region Senjidema, the only daughter of jidema, in Beijing. are all depicted in a uniquely the wealthy Deliger. One day when she went to the temple fair, Senjidema met and fell in love with Burigude, a young slave who won the wrestling competition. How• ever, the lord's son and his mother were attracted to the beautiful Senjidema. Being a real snob, Deliger accepted their betrothal gifts and drove Burigude away. Senjidema ran away from his father to meet with her lover on the grasslands where they asked heaven and earth, the flowers and trees to witness their wedding. But they were later caught by men sent by the lord. Threatening to kill herself, Senjidema managed to obtain her lover's release but was forced to marry the lord's son. Senjidema went on a hunger strike to oppose the marriage, and Burigude returned too late to Zhao Xia as Senjidema. XU XIANGJUN rescue her, arriving, only to have his love die in his arms. This story is told in a narrative The drama evokes a strong aesthetic manner. The dances folk song very popular in the sense of the land. Picturesque become a scroll unfolding before Erdus grasslands. It has been images of rolling mountains, the audience, describing social life adapted into poems, a symphony, floating white clouds, the endless in the area. The "Wrestlers' novel, modern drama, opera, film grasslands, the sheep and cattle Dance," the "Horse-Harnessing and other art forms, and recently and the yurts, all bring to mind the Dance" and "Wedding Dance"

Scenes from the dance-drama. Phclos bv XUXIANGJUN

BEWiNG REVIEW, APRIL 4-10. 1988 are all popular folk dances in the experts also acclaimed the perfor• Erdus grasslands. By refining and mance as a highly artistic developing the shoulder, hand, leg production. and waist movements, the chore• The Erdus Song and Dance ographer raised the dances to a Ensemble was founded in 1951. higher artistic level. For the past 30 years and more, Other dances were created artists from the troupe have specially for the drama. For devoted themselves to the explor• ' example, the solemn and imposing ation and development of folk "Honour Guard Dance" in the music and dance. Many of their first act gives an idea of the productions have won nationwide supremity of the lord; the "Sarina awards. Although the troupe is Dance" in act three conveys the made up of less than 100 universe's joy for the couple when performers, most of them of the they exchange wedding vows on Mongolian nationality, it is the grassland. warmly received by people of all Audiences were most impressed nationalities. by the many pas de deux in the by Hong Lanxing drama. One such piece in act two gives a passionate portrayal of the lovers' feelings. The piece in act Bamboo Root three and the dance sequence in act five have a dreamlike quality Sculpture which heightens the emotional scenes of the "field wedding" and In 1986. when Tang Dequan, an the death of the heroine. These ' associate professor at the Si• Bamboo root sculpture — Sisters — dances, incoporating Mongolian chuan Academy of Fine Arts was carved by Tang Dequan. sketching in a bamboo forest, he dance styles with swirling, leaping found a root of bamboo with and Hfting, present both the tassels which looked like a knitted sweetness of love and the cap. It aroused his imagination. order to express the hero's anger. resentment the lovers felt for all Using the bamboo root, he carved Tang turned the bamboo -root who stood in the way of that love. two children with caps and named upside down and used the upper them Dongwa (Winter Children). part of its tassels to shape the The music for the drama also The piece was exhibited at the hero's stiff hair and the lower part has its origins in traditional song. China In-Door Decoration Exhi• his sword-like beard. He first The theme song is to the tune of bition and was well received by carved the eyes in the likeness of the original folk song, and other visitors. common people, but the result was folk and religious musical pieces that the figure appeared listless. Since then. Tang began to enjoy On his second attempt he carved add to the national flavour of the sculpting with bamboo. Before his much larger empty eye sockets drama. The music for the solo sculpting had been with marble which made the image look dance by Senjidema, though also from which he had carved some powerful. from a traditional folk song, has a statues. special, revived quality while the In his carving of the figure of music for the "Devine Lantern Tang's statues are ingeniously Don Quixote, he used artistic Dance" has strong religious conceived. When Liu Kaiqu a exaggeration to capture the overtones. The solo piece in act famous Chinese sculptor visited character who indulged in fantasy and met with troubles wherever he three which heightens the loneli• the exhibition held last October, he praised Tang's work: "It went. Tang carved a long face, a ness and resentment of the hero is combines natural beauty and curved beard, large round eyes accompanied by the melody of a human skill." and empty mouth on a root of Mongolian folk song — "Seeing Tang spends much of his time bamboo. The U-shaped tassels the Bride Off." carving bamboo statues. Once he formed his helmet. Jia Zuoguang, renowned expert found a bamboo root with many Tang Dequan has now created on Mongolian dance and vice- tassels in the mud. Its diameter more than a hundred works of art chairman of the Chinese Dancers' was about 80 centimetre. The root from the roots of bamboo. These Association, said that people were made him think of Zhong Kui, a pieces have been exhibited three most struck by the strong emotion hero in China's ancient legends times in Beijing in less than one evoked by the drama. Many other with the power to catch ghosts. In year.

BEIJING REVIEW, APRIL 4-10, 33 •i TOURISM

The tourism department in Shaanxi Province restored the 27 Million Tourists Come to See China Mausoleum of Huang Di (Yellow Emperor) and expanded the world-famous Qin (221-206 BC) bout 26,902,000 tourists came 62.6 percent were 21-50; 16.9 Terra-Cotta Warriors and Horses Ato China in 1987, an increase percent were 51-60; and 12.2 Museum. The Buddha's fingers of 17.9 percent over 1986. Of the percent were over 60. Compared and other cultural relics of the total, 1,728,000 were foreigners, with 1986, the percentage of Tang Dynasty (618-907) dis• an increase of 16.6 percent; 87,000 tourists 20 years old and under covered from the Famen Temple were overseas Chinese, up 27.9 dropped; the percentage of those will be put on display this year. percent; and 25,087,000 were over 60 remained the same; and Many tourists visited these compatriots from Hong Kong, the percentage between 21 and 60 attractions last year. Xian received Macao and Taiwan, a rise of 17.9 increased. 301,000 foreign visitors, an percent. The proportion of foreign increase of 17.6 percent over 1986. The visitors came to China from visitors who came purely for 169 countries and regions. About holidays dropped slightly to 43 893,000 came from Asia, an percent. The remaining 57 percent increase of 18.2 percent over 1986; came to work, do business or Tourist Briefs 387,000 came from the Americas, participate in sports or other up 11.2 percent; 367,000 from activities and then went travelling. • The Holiday Inn Lido Beijing Europe, a rise of 27 percent; and Administration Company 70,000 from Oceania, a drop of jointly operated by the China 13.6 percent. New Tourist Resources Travel Service and the Hong Kong The largest number of tourists Yick Ho Ltd. has opened for came from Asia. Of these, 578,000 China's major cities are devel• business. Using the Lido Hotel as or almost two-thirds came from oping and expanding their tourism its base, the company provides Japan, an increase of 19.4 percent. resources. administrative services, and trains The number of tourists from administrative staff for the China Singapore, the Federal Republic The Beijing tourism department Travel Service, hotels and offices, of Germany, Thailand, France, has opened the Tiananmen and apartment buildings. Italy, Switzerland and Sweden all Rostrum to foreign tourists and increased by more than 20 percent. recently feted the one millionth • Twelve 3,000-year-old cliff There were 315,000 visitors foreign tourist to visit the frescoes have been discovered in from the United States, a gain of legendary home of the dragon — Zhangzhou, Fujian Province. The 7.9 percent over 1986, and 52,000 China. Beijing received more than paintings have been ground, from Canada, a rise of 26.8 1.07 million foreign tourists last chiselled and carved out. They percent. year, an increase of 8.9 percent reflect the characteristics of the About 25,000 tourists came over 1986. primitive Minyue matriarchal from the Soviet Union, an increase To add attraction for its tribes. Surprisingly, the paintings of 31.6 percent while the number tourists, the Hangzhou tourism are similar to frescoes discovered of visitors from Australia dropped department arranged activities in Bingdong County, Taiwan by about 20 percent from the including dragon boat cruises in Province. previous year. the moonlight, dragon lantern • Tourists have started to take festivals and striking the bell at the rafting tours along the Wujian Jingsi Temple. Last year 292,000 River. The 50-km-long tour route, Tourists' Composition overseas tourists came to Hang• in northern Guangdong Province, zhou, an increase of 9.7 percent is the first of its kind in China. The proportion of female over the previous year. foreign tourists has risen steadily To welcome China's Sixth in recent years. The number of National Games, the Guangzhou female visitors increased to 39.3 tourism department expanded its percent of the total in 1987, up Guangzhou Delicious Food Fest• from 35.4 percent in 1985 and 37.2 ival which was already an percent in 1986. attraction to many tourists. Of the foreign tourists, 8.4 Guangzhou welcomed 1.85 mil• percent were 20 years old or under; lion overseas tourists in 1987.

34 ^^^qiljiG REVpf^, APRIL 4-10, 1988 Chen Jiageng (Tan Kah Kee), a famous patriotic overseas Chinese. ART PAqE Sculptures by Sun Xilin Sun Xilin, born in Beijing in 1935, now works at Xiamen University. He specializes in figure sculpture and traditional Chinese paintings.

Double deers.

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