Government Speaks Out on Issues of Common Concern

G BANKERQVFINANCE Qingliu County in Fujian Province has developed the export of wood and bamboo commodities. Top: Wooden bowls from the wild jujube tree are both consumer goods and handicraft articles; Below: Craftswomen weaving wooden-bead door curtains. Photos by Li Kaiyuan BEIJING REVIEW VOL. 32, NO. 44 OCT. 30-NOV. 5, 1989

CONTENTS Discussing China's Key Issues

• In an interview with the Japanese news agency Kyodo, State Council spokesman Yuan Mu answered some percep• tive questions about the situation in China, including the EVENTS/TRENDS 4-7 economic, political and diplomatic aspects (p. 8).

Anti-Porn Campaign Off to Anti-Porn Drive to Clear Eyesores Good Start China and India for a New D With initial success in confiscating pornographic books International Order and video tapes, Li Ruihuan, who is in charge of China's anti-porn campaign, calls for continued perseverance in rid• Fresh Term for the Freshmen ding the country of undesirable material (p. 4). China's Population Still Faces Yellow Light Retrenchment and Economic Growth Real Estate: A Rising Industry • In a recent exclusive interview with Beijing Review, Li INTERNATIONAL Guixian, president of the People's Bank of China, talked about China's current financial situation and policies, mea• Questions of Interest About sures to be taken in the next step of financial reform and China 8 whether China can afford to repay its foreign debt, particu• Political Crisis in South Korea 10 larly during the peak repayment year of 1992 (p. 17).

CHINA Building China's Legal System

Construction of the Chinese • China's socialist legal system has gone through four stages Legal System 13 —establishment, initial development, destruction and rapid Retrenchment and Economic advancement—since 1949. Beginning in 1979, the National Growth 17 People's Congress and its Standing Committee have enacted, China's Stock and revised and supplemented a total of 147 laws and regulations Bond Market 20 covering various aspects of state and social life. A socialist legal system with Chinese characteristics has taken shape, the Foreign Trade Increase in judiciary strengthened and the people's sense of responsibil• Dalian 24 ity to the law enhanced after years of nationwide publicity BUSINESS/TRADE 29-31 and education about the legal system (p. 13). CULTURE/SCIENCE 32-34 China's Stock and Bond Market

COVER: Li Guixian, a State Council• • Although the main purpose of China's issuance of stocks lor and president of the People's Bank and bonds is to generate funds for national construction, it of China, being interviewed by a Bei• is also an important step in the reform of its financial system. jing Review reporter. A product of the planned commodity economy, China's stock by Xue Chao and bond market is developing under the prerequisites of public ownership and adherence to the socialist orientation (p. 20).

Unless written by Beijing Review correspondents, the opinions expressed in signed articles do not necessarily reflect the view of the Beijing Review editorial board.

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ment of the assigned tasks. In dealing with any case, he Anti-Porn Campaign Off to Good Start stressed, the policy of being len• ient to those who confess their ore than 30 million copies ybody should know, Li warned, crimes and harsh to those who of pornographic books that one of the important means refuse should be followed. M and magazines and foreign hostile forces are using to It is also necessary to carry out 400,000 obscene audio and vi• push China into "peaceful evolu• sentences swiftly so as to assuage deo tapes have been confiscated tion" from socialism back to cap• popular indignation, he added. throughout China in the ongoing italism is to use pornography, While promoting the anti- campaign against pornography. gambling and drugs to poison the pornography campaign, work Statistics also show that by the Chinese people. should be done to encourage end of September, 300 centres He urged leaders of all work for making and distributing ob• wholesome culture and invigo• units to devise plans, take mea• scene publications were shut rate the people's cultural life sures, assign concrete tasks and down and 1,800 people involved with healthy publications, Li in such activities brought to jus• supervise and speed up the fulfil- said. • tice. The national committee in charge of the campaign sent teams to the coastal provinces China and India for of Guangdong, Fujian, Zhejiang and Hainan to close the loo• A New International Order pholes through which porno• graphic publications entered hina and India have ex• der. China. pressed their willingness to The Five Principles of Peace• Some provinces have even es• e establish a new interna• ful Coexistence are not only ap• tablished regular inspection or• tional political and economic or• plicable to the relations between ganizations in the anti-porn der. India and China, but also suit• drive. In a meeting in New Delhi able to international relations Earlier in September, Li Rui- on October 12 Chinese Vice- the world over, he said. huan, member of the Stand• Premier Wu Xueqian and Indian Both statesmen noted with sa• ing Committee of the Political External Affairs Minister Nara- tisfaction that Sino-Indian rela• Bureau of the Chinese Commun• simha Rao exchanged views on tions have improved in recent ist Party Central Committee, bilateral relations and interna• years and they hope the momen• said that although the campaign tional problems. tum continues. had produced satisfactory results Wu noted that the Five Princi• The two countries, Rao said, initially, some areas had been ac• ples of Peaceful Coexistence ini• are facing a hopeful stage of de• tually overlooked. tiated by China and India in the velopment in bilateral relations. A pressing matter of the cam- 1950s have great vitality. He The 40th anniversary of the .esta• pain, he said, is to continue to hoped that all nations concerned blishment of diplomatic relations promote it and prevent it from will work to build a new interna• between India and China in WQO going from a fine start to a poor tional political order on the basis will be a historical opportunity finish. of the Five Principles and a new for both two countries to prom• Li noted that some senior lead• international economic order on ote their relations. ers, including Deng Xiaoping, the basis of equality and mutual Indian President Ramaswamy have been greatly concerned benefit. Venkataraman also met with Wu about the campaign. The Party's China wishes to improve and and stressed that there is wide Central Committee and all the develop relations with India on scope for co-operation in various members of the Standing Com• the basis of the Five Principles, fields between the two countries. mittee of the Political Bureau of Wu said. Friendly relations between the Party Central Committee are Rao stressed that India and China and India date back thou• determined to make the cam• China have similar and identical sands of years, Venkataraman paign a success, he said. views on many problems. India said, expressing the hope that The major priority, he added, wishes to work together with Wu's week-long visit would is to heighten the people's under• China to establish a new interna• strengthen Indian-Chinese rela• standing of the campaign. Ever• tional political and economic or- tions.

4 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 EVENTS/TRENDS

Wu briefed the president on two sides conduct friendly con• abide by the Five Principles of China's achievements in the 40 sultations in a spirit of mutual Peaceful Coexistence — mutual years since the founding of the understanding and mutual ac• respect for sovereignty and ter• People's Republic in 1949. He commodation, a mutually ac• ritorial integrity, mutual non- reiterated that there will be no ceptable solution can be found." aggression, non-interference in change in China's independent China supports South Asian each other's internal affairs, foreign policy of peace or its pol• regional co-operation and appre• equality and mutual benefit and icy of reform and opening to the ciates the progress made in this peaceful coexistence -— and if outside world. respect through the joint efforts there are new international polit• On October 14 Indian Prime of all the countries in the area, ical and economic orders esta• Minister Rajiv Gandhi met with he added. blished on this basis, it will be "Wu. He said it is important to Wu emphasized that if all entirely possible to achieve dur• maintain good relations between countries in the world strictly able peace in the world. • India and China. The two leaders had' sincere and friendly talks on a wide range of bilateral and interna• Fresh Term for the Freshmen tional issues. Gandhi said as the two coun• tries are confronted with new ilitary and political train• appointed president of Beijing challenges, India and China ing for Beijing Universi• University, expressed his hope should strengthen co-operation M ty freshmen is an exper• that the freshmen would recog• in various fields and complement iment in exploring ways of nize the kind of personnel need• each other by drawing on each nurturing qualified college stu• ed by the state and learn the best other's strength. dents," said He Dongchang, vice- way to make themselves useful. In response, Wu expressed the minister of the State Education "Military and political train• hope that friendly contacts can Commission. ing will give you a fine environ• be expanded, mutual under• He was speaking at the open• ment to grow up in," Wu said, standing increased and bilateral ing ceremony October 12'at Shi- "so, you should value the oppor• co-operation enhanced between jiazhuang Army Academy of tunity and train yourselves to be the two populous, developing the year-long military and polit• of high political consciousness." countries facing common prob• ical training course for freshmen Fouflded in 1977, the Shijia- lems. from Beijing University. zhuang Army Academy is Chi• Later, Wu gave a speech on Wearing new uniforms, 748 na's best cradle for junior offi• "Sino-Indian relations under the freshmen from 27 of China's cers. It covers an area of 360 current international situation" provinces, cities and autonom• hectares with an enrolment of at a meeting of political figures, ous regions attended the cere• 3,400, and is equipped with up- social celebrities and other In• mony. This is the first time that to-date teaching facilities. dian friends. He stressed that Chinese college students have During the nine-month-long broad prospects for the growth of undertaken a full year of mili• military and political training Sino-Indian relations exist. tary and political training. period, the students will also stu• "We can not only strengthen "Compared with speciality dy Chinese, English and other our: co-operation and make up teaching, ideological education general knowledge courses. The for .-each other's deficiencies in has been weak in recent years," remaining three months are win• many areas, including economy, he said. ter and summer vacation. science, technology, culture and Military and political training There are 60 teachers of whom education, but also enhance was one of the ways to improve 26 are regimental corrimanders our consultations on the North- the ideological standards of stu• and the others are professor, as• South dialogue, South-South co• dents and their understanding of sociate professors and lecturers. operation and a number of other the nation's circumstances, the The 748 students are divid• international issues," Wu said. vice-minister added. ed into six squads with women Referring to the Sino-Indian Army academies have a long making up two of the squads. boundary question, Wu said the history of carrying out ideologi• Recently, the academy con• Chinese government sincerely cal and political education and ducted an opinion poll in one of hoped to see a fair and reason• local schools should learn from the six squads which has 120 stu• able settlement of the issue. them, he said. dents from such departments as "I believe that as long as the Wu Shuqing, the newly- mathematics, geophysics, sociol-

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 5 EVENTS/TRENDS ogy and Russian. The results of the survey, done anonymously, show that 98 stu• dents consider the training ne• cessary while the other 22 thought it unnecessary. The" survey also asked three questions: "What did you worry about most after entering the academy? What do you want to know most and what are your suggestions about the training?" The majority of the freshmen worried about the prospect of not being able to handle tough training and that their studies might be affected. More than half of the students cared most about how to fulfil their training tasks, while 40 of them cared most about their diet. "People can't survive without food," one student wrote. An• other student said,"I care most about the government's attitude toward college students and Chi• na's i)olitical situation." More than 60 percent of those surveyed wanted more recrea• tional activities and more time to themselves. More than 20 stu• dents suggested more time for Zhao Peng, a student with Beijing University, speaks on behalf of the freshmen their own special studies. at the opening ceremony at Shijiazhuang Army Academy. ZHANG XIAOJUN "Military training is good for the willpower and health," said and sound morality, intelligence ties nationwide. Some students Ye Haidong, a student of math• ematics from Beijing. "Whoever and be physically strong." are sent to military camps, while you are and whatever you do, He disclosed that this year an others go to military academies. you should have the brave and eight-week military and political In some cases officers are invited staunch quality of a soldier." training course is being carried to the campuses. ,, • An official of the State Educa• out at 143 colleges and universi- tion Commission noted that mil• itary and political training for college students has been China's consistent policy. Beijing Univ• China's Population Still ersity freshmen carrying out the practice is by no means a punish• Faces Yellow Light ment, he said. hina's population is expect• about 510,000 more babies were "As a key university directly ed to surpass 1.11 billion born than the same period last under the State Education Com• mission, graduates of the presti• Cby the end of this year as year for an increase of more than gious Beijing University should the number of childbirths ex• 5 percent. be fit for socialist construction," ceeds last year's by a worrisome More than 23 million babies the official added. "They should margin. are expected to be born in China have a clear political orientation In the first six months of 1989 this year, about 1.18 million

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 EVENTS/TRENDS

more than in 1988, said Peng She pointed out that publicity set up publicity and education Peiyun, Minister of State Family and education should be given centres. Of the 27, 23 have video Planning Commission. top priority and use of contra• and tape making projects. This This year's birth rate is expect• ceptives encouraged. has helped bring about changes ed to exceed 21 per thousand and In addition, administrative, le• in old concepts about marriage, natural population growth, 15 gal and economic measures but much more work needs to be per thousand, an increase of 0.8 should be adopted to make sure done, she said. per thousand in both cases. people comply with the national In many rural areas, especial• China's population passed the programme. ly where poverty is high, family 1.1 billion mark last April. Peng acknowledged that many planning is still weak. In some "One must keep a sober mind peasants want to have more over the country's serious popu• areas, administrative measures children because of the feudal remain the chief way to imple• lation issue and make greater ef• belief of "more children, more ment family planning because of forts to publicize the importance happiness," and the desire to a lack of understanding of the of family planning," Peng told have more working hands in the the National Conference on family. importance of publicity and ed• ucation. Rural officials often Family Planning Publicity and Basic family planning edu• Education on October 14. cation courses, integrated with think that work can only be done She said the birth rate rose in scientific knowledge and health through tough policies and fines. 1986 and 1987 but declined last care for women and children, "Yet experience has shown year. have been organized in at least that family planning can be well However, another population 650 counties and more than implemented in villages through growth peak is looming because 2,000 towns since last August. better publicity and education," 360 million people who were A publicity and education net• Peng said. "It will help people to born during the second birth work has been established across get rid of poverty faster and the peak from 1962 to 1975 are ap• China. Some 27 provinces have country to prosper." • proaching marriageable or child- bearing age. Every year from 1986 until 1997, between 11 mil• lion and 13 million women will Real Estate: A Rising Industry reach childbearing age — almost double the number of either of hina's real estate industry are now more than 300 real es• the two earlier birth peaks, Peng is growing more and more tate exchanges and 3,000 proper• said. Cprosperous along with the ty development companies across Family planning at the grass• development of the country's the country. In large cities such roots level has lagged behind, she commodity economy, according as Shanghai, Shenyang and Tian- said, noting that in some rural to the Ministry of Construction. jin, the annual volume of such areas, families are allowed to The industry is playing an im• trade is tens of millions of yuan. have a second child if their first portant part in the national econ• The scope of the market has was a girl. omy and urban development, a expanded from mere housing "Family planning is one of the ministry official said. transactions to property informa• country's basic policies, while The urban residential area on tion services and trust buying. publicity and education are pivo• the mainland of China now to• An auction exchange has been tal in implementing the policy," tals 5.5 billion square metres, set up in Shanghai and mort• Peng told the conference in valued at 1,600 billion yuan, he gage loans are being provided by Hongzhou, capital of Zhejiang said. banking organizations in Province. About 140 officials After 1949, a state-run hous• Wuhan. from 29 of China's 30 provinces, ing system was practised in The official said that housing municipalities and autonomous China, whereby the state built reform is now well under way regions attended the conference. apartments and distributed them and last year 36 million square Peng said strict control of po• through work units. It was not metres of urban residences were pulation is essential to balance until the early 1980s that the put on the market. population growth with social state decided to begin a system of In the last decade of the centu• and economic development and buying of urban property. ry, the official said, China will to coordinate utilization of re• The real estate industry has invest 1,000 billion yuan to build sources with the natural environ• boomed in recent years. Incom• 3 billion square metres of urban ment. plete statistics show that there housing. •

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 7 Questions of Interest About China On October 15, State Council spokesman Yuan Mu wds interviewed by a group of reporters led by Tadashi Ito, director of the Beijing branch of Japan's Kyodo News Agency, and answered some questions that are of keen interest both inside and outside China. Full text follows.—Ed. Kyodo: It is said that the Fifth harvest. Together, the yield of nomic structure. At the same Plenary Session of the 13th Cen• this year's summer crops and ear• time, the various reform mea• tral Committee of the Chinese ly rice is 3.51 million tons more sures miist be deepened and per• Communist Party will be con• than last year's yield. The rate fected and the policy of opening vened soon. Could you give us of price hikes has been brought to the outside world must contin• some further information? down monthly and inflation is ue. As long as our work is well Yuan Mu: As far as I know, the now basically under control. The done, China's economy can be ex• Fifth Plenary Session will prob• scale of investment in fixed assets pected to develop continuously, ably convene at the end of Octo• has also been brought under con• steadily and harmoniously. I'm ber or early in November. The trol and the recovery of money optimistic about the prospects of main topic of the meeting will be has been relatively smooth. Ge• the development of China's econ• economic questions. Important nerally speaking, the national omy. decisions will be made on further economy is steadily developing straightening out the economic with the rectification and im• order and improving the econo• provement campaign and the si• Political Situation Stable mic environment and the steady tuation is better than previously Kyodo: Ths People's Daily has development of the national econ• expected. recently run an article stressing omy. Economic stability is the However, the economy today is stability and solidarity. Does this foundation of political and social still beset with great difficulties, mean that there still are some stability. This session will surely which have been piling up for destabilizing factors in China or draw attention from people both several years, not just the last that the Zhao Ziyang faction is at home and abroad. year or two. Since the latter half still very influential? of 1984 overheated economic de• Yuan: My vi'ew is that it is re• Economic Situation Better velopment had caused severe dis• markable that social order has tortions. The main problems were been rapidly restored, people's Than Expected that the scale of capital construc• minds calmed, the political situa• Kyodo: China at present is faced tion was too large, the speed of tion stabilized and the economy with some grave economic prob• development too fast and the eco• is steadily developing only a few lems. Could you predict on the nomic structure irrational, unbal• months after the quelling of un• prospects of the economic situa• anced, inefficient and wasteful. rest and the counter• tion? While it was right to rejuven• revolutionary rebellion in June. Yuan: China's economy since the ate enterprises, we neglected to This has more than shown that Third Plenary Session of the strengthen over-all control and the overwhelming majority of the 11th Central Committee of the management. It is right to simpli• Chinese peopjp trust and support Chinese Communist Party has fy the government and decentral• the Party. This is because they seen remarkable progress. Over ize power, but necessary cen• understand from their personal the past year or so, efforts to tral controls have been neglect• experiences that during the 40 straighten out the economic or• ed. This has led to chaos in the years since the founding of New der, improve the economic en• economic order, especially in the China, the upholding of the so• vironment and deepen reforms commercial sector. In light of cialist road, especially the moder• have also scored initial success. this, the Central Committee of nization drive and the reform and During the first nine months the Party and the State Council opening up during the pastsde- this year, China's industrial prod• have decided to spend three years cade, have gradually made their uction increased by 8.9 percent or more rectifying and improving country prosperous and powerful, over the same period last year. the national economy, with em• achieving what old China could In agriculture, this year's sum• phasis on controlling the total not have achieved under the ex• mer crops have set a record and volume (of money in circulation), ploitative system. Therefore, they early-season rice has seen a good and reasonably adjusting the eco• support the leadership of the

8 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 Communist Party and socialist some problems have existed. As tions and never submits to foreign system. The unrest and riots that to the problems in the current pressure interfering with China's were aimed at overthrowing the relations between China and the internal affairs, and that it will Communist Party and subverting United States, the reason is that continue to wage struggles on just socialism are unpopular. Now we some Western countries, led by grounds, to our advantage, and stress the consolidation and de• the US, refuse to understand the with restraint. Although econo• velopment of a stable and united measures China took to deal with mic sanctions will bring about political situation. We mean by the purely internal matters of some temporary difficulties, they this that everybody should cher• checking the turmoil and putting will fire the Chinese people with ish the hard-won stability and un• down the counter-revolutionary great enthusiasm to be self-reHant ity, and safeguard the fruits of rebellion. Rather they choose to and strive for prosperity. Those socialist construction. openly interfere in China's in• who imposed sanctions on China The Party's renewed emphas• ternal affairs through "economic will suffer from their actions. is on stability and unity by no sanctions." The US has admitted means indicates that Zhao Ziyang that this is partly due to misled Optimistic About or what you called the "Zhao Zi• public opinion. Therefore, in or• yang faction" has any powerful der to improve Sino-US relations, Sino-Japanese Ties influence on the current situation it is up to the United States to Kyodo: Do you have any expecta• in China. However, the influence take initial steps to remove the tions for Sino-Japanese relations? of bourgeois liberalization has not obstacles. The improvement of re• Yuan: China and Japan are close been completely eliminated be• lations depends on the US stop• neighbours separated only by a cause Comrade Zhao Ziyang sup• ping its interference in China's strip of water. The governments ported and indulged the trend. internal affairs. There is no diffi• and peoples of both countries Morever, those who created the culty on the Chinese side. hope that China and Japan can turmoil and further instigated re• China relies mainly on its own have friendly relations from ge• bellion have not given up their efforts in its modernization drive. neration to generation. This is vicious aims and some criminals At the same time, it also needs consistent with the basic interests who were involved in the riot foreign assistance, including de• of the Chinese and Japanese peo• have not been caught. Conse• veloping economic and trade re• ples, and the interests of the peo• quently, some unstable factors lations and technological co• ples of Asia and the world as a still remain, but it should not be operation with developed whole. Since the restoration of di• exaggerated. Only one example is Western countries. But economic plomatic relations, the two coun• clear enough to support my view. and trade relations must be devel• tries have made fairly rapid pro• When Zhao Ziyang was stripped oped on the basis of equality and gress in developing a relationship of his post as the General Secre• mutual benefit. In my opinion, of friendship and co-operation. tary in the Fourth Plenary Ses• China's relations with Western But nowadays, because of factors sion of the 13th Central Commit• countries, including the United on the Japanese side, there are tee of the Communist Party of States, and its economic and trade certain unsatisfactory aspects of China, the resolution was adopted exchanges with them will develop the bilateral relations. unanimously. And this deci• sooner or later. The most impor• However, China has also not• sion' has been widely support• tant fact is that the Chinese Com• iced the fact that certain Japanese ed through various channels by munist Party's leading role is policies are somewhat different the 'Communist Party organiza• firmly established and the politi• from those of some Western pow• tions from top to bottom and peo• cal situation in China is stable. ers, and that Japan has ex• ple''bf all walks of life. No country in the world can deny pressed its willingness to grad• the fact that socialist China, with ually change the current situation a population of 1.1 billion, under for the better. I hope that, from No One Can Isolate China the leadership of the Communist the historical perspective, the un• Kyodo: What is your comment on Party, stands like a giant in the pleasantness in Sino-Japanese the relations between China and East. It is impossible for anyone friendly relations will be short• Western countries, especially the to isolate China. lived. As for hopes for Sino- United States, and what is the We note that the "economic Japanese relations, politically I prospect of improving these rela• sanctions" have recently eased hope the two countries will forge tions? but are far from being eliminat• a long-term friendship on the bas• Yuan: Sino-US relations have, on ed, and economic relations have is of the Five Principles of Peace• the whole, developed smooth• not yet returned to normal. The ful Coexistence. From the aspect ly since the two countries esta• Chinese government has repeat• of economics, I hope that bilater• blished diplomatic links, though edly stated that it fears no sanc• al trade will continue ta increase

BEIJING REVIEW, CX:T. 30-NOV. 5, 19S9 9 INTERNATIONAL

and China's trade deficit with Ja• and Liberia has a^ain shown that Yuan: The basic line of our Party pan will be further reduced, and China will never change its so• is "one centre, two basic points," the two countries' agreements on lemn and just stand on the matter that is, economic construction is financial co-operation will contin• of the reunification of the moth• the centre, and that both openness ue to be implemented. In the mat• erland. The Taiwan authorities' and reform and the Four Car• ter of technological transfer, I attempt to pursue an "elastic di• dinal Principles must be main• hope there will be fewer obsta• plomacy" and to create "two Chi• tained. The failure to firmly and cles and more openness on the nas" or "one China, one Taiwan" consistently maintain the Four Japanese side. I am optimistic will have no future and will be Cardinal Principles and not en• about the future of Sino-Japanese opposed firmly by us. China will ough ideological and political ed• relations. persist in pushing forward the ucation in the past are the major cause of the peaceful reunifica• internal causes to the recent tur• tion of the motherland in accord• Firmly Opposing Taiwan's moil and rebellion in Beijing. ance with the concept of "one "Elastic Diplomacy" Now we have summed up the ex• country, two systems." The Tai• periences and learned a lesson. Kyodo: Could you comment on wan authorities should adapt Our stress on maintaining the the "elastic diplomacy" of the themselves to the trend of history Four Cardinal Principles and on Taiwan authorities? and make enlightened decisions Yuan: The government of the that will help to reunify China. strengthening ideological and pol• People's Republic of China is the itical education is aimed at prom• only legal government of China Chinese People Will Never oting China's modernization and and Taiwan is a part of China's Forget the Past Lessons reform and openness more effec• sacred territory. No change will tively and healthily. It is a com• be permitted to this policy. We Kyodo: China recently emphas• pletely different concept than firmly oppose any words or ac• ized maintaining the Four Cardi• that of going back to the "cultural tions that may lead to the separa• nal Principles and strengthening revolution." The Chinese people tion of Taiwan from the moth• ideological and political educa• have suffered too much from the erland. China's suspension of di• tion. Does this mean that the"cul- "cultural revolution" and will plomatic relations with Grenada tural revolution" has come back? never forget it. • Political Crisis in South Korea

The demands in South Korea for Roh Tae Woo's resignation have never stopped since he took power. In the coming years, Roh will face a still more difficult situation and whether he can survive will be decided by how he deals with the present problems and those which arise in the future. by Yu Shaohua

hen Roh replaced Chun South Korea after the Olympic witnesses to the Assembly's ad Du Hwan and took power Games ended last autumn. Six hoc Committee, the public began W in South Korea one-and- months before the Games, the concentrating attention on CHun. a-half years ago, he vowed that South Korean public had de• How to deal with the problem has he would open up a new era in manded a thorough investigation become a headache for Roh be• South Korea. However, the situa• into the illegal acts of Chun and cause of his close relations with tion has developed contrary to his family when he was in power. Chun's regime. It is considered his will. The present reality indi• Having a majority in the Nation• that Roh is linked with some of cates that he is now facing a dif• al Assembly, the opposition par• its illegal activities, such as sup• ficult situation. ties organized a parliamentary pressing democracy and the per• investigation. According to its re• secution of innocent people. The Problem of sults, some members of Chun's Some of Chun's ministers still re• Chun Du Hwan family were found guilty of bri• main in Roh's cabinet. bery. Roh knows clearly what the A political storm swept across Along with the summoning of struggle is directed at. He wants

10 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 to protect his rule and, at the gle for investigating the irregu• put him in a still more difficult same time, he has to prevent larities during the "fifth republ• position and cause the situation Chun from suffering the hard• ic" and finding out who was res• in South Korea to become even ship of imprisonment which ponsible for the murder of people more unstable. would probably enrage Chun's during the Kwangju uprising has trusted followers in Roh's cabinet quickly developed into a large- National Reconciliation as well as hardliners in military scale struggle to topple Roh. He circles and bring disaster to Roh's had promised to the public in his In the less than two years since regime. Because of this, Roh ela• campaign for president that peo• Roh Tae Woo came to power. borated a solution separated into ple could make an "interim eval• South Korea's attitude towards three steps. First, he arranged a uation" of him through polling reunification of Korea has un• telephone talk with Chun for half a year after his election and he dergone great changes. This has an hour during which he per• would decide to remain or leave mainly involved a big readjust• suaded Chun to agree to apolog• according to the result. However, ment in its policy towards the ize to the public, hand over un• people were disappointed with North, issuing the July 7 Declar• lawfully seized property and live what Roh had done during his ation, re-assessing the northward in seclusion in the countryside. one-and-a-half year tenure, and policy, slowing down the process Then he came out hinjself to ap• he found himself in an awkward of reconciliation and even bra• peal for a political pardon for situation. He realized that his zenly arresting those democrats Chun. As the last step, he reshuf• promise would not allow him to who visited the Democratic Peo• fled his cabinet and dismissed survive the struggle. As a result, ple's Republic of Korea (DPRK). seven former members of Chun's he went back on his promise and At the same time it has declared cabinet so as to appease the publ• said that the "interim evaluation" that South Korea will join the ic indignation. was not a vote of confidence but United Nations separately. What Roh promised that after the only meant the evaluation of his the South Korean authorities amnesty to Chun, the political policy. His attitude of defying have done in this period is prisoners arrested in Chun's time public opinion in order to protect contradictory, proving that they would be given a general pardon his position as president had of have used reunification as a sub• and the victims in the Kwangju course met with strong opposi• terfuge to win the people's sup• uprising would be compensated. tion and protests from the people. port, and that in working out and He also promised to adjust the Within a few days, the level of readjusting their policy, they national and social security laws the struggle to topple Roh in the have not taken the fundamental and to legalize and make public form of mass action, strikes and interests of the whole nation into the use of political funds. Howev• student demonstrations had ris• account. er, he failed to obtain the results en sharply. On March 16, 4,000 The reunification of Korea is a he had hoped for. The opposition workers of the Seoul subway matter for the whole nation and parties indicated that they would went on strike paralyzing the sys• people's efforts to promote its not give up their investigation tem with its capaciy to move 2.4 realization are right and proper. and the public maintained that million people a day. On the However, the South Korean au• the poUtical amnesty to Chun same day, the prime minister or• thorities seek to control reunifi• would in no way help the investi• dered 15,000 police to suppress cation through monopolizing ex• gation into the unlawful use of the strike and some 2,800 work• changes and not allowing any• political funds during Chun's ers were arrested. On March 20, body else to express opinions or "fifth republic." On January 31 Roh made a broadcast speech de• take action. Two examples are this year, the South Korean pol• claring he was postponing the typical. ice authority published results of "interim evaluation " indefinitely The first is the case of clergy• an investigation into irregular• with the excuse of avoiding the man Mun II Hwan. He is adviser ities committed by Chun with reappearance of the confusion in to the AUiance for a National which the public generally last year's presidential election. Democratic Movement and has showed dissatisfaction. Every op• The changes in Roh's attitude to• committed himself to it, enjoying position party as well as non• wards the "interim evaluation" high prestige. From March 25 to governmental groups made de• means that following the defeat April 3 he paid a private visit to clarations and some even de• of his soft policy he will adopt a Pyongyang in the interests of reu• manded renewed investigations tough policy, and spare no efforts nification. Upon alighting from into Chun's misconduct. to maintain his ruling position by the airplane on his return he was From February 25, one year means of suppression and arrests. arrested by the South Korean after Roh took office, the strug• However, what Roh is doing will authorities for violation of the

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 11 "state security law." His persecu• itated to create disturbances in according to them ordinary peo• tion by the Roh regime has not order to destroy the dialogue ple cannot demand reunification only drawn strong protest from with the North and prevent reu• of the fatherland or work to• the broad ranks of the people and nification. wards it without being consi• students, but has also been den• The second example is the case dered as representing some un• ounced by world public opinion of coed Rim Su Gyong. The 13th pardonable evil. as action not favourable to the World Festival of Youth and Stu• The words and deeds of the relaxation of tension on the Ko• dents was held in Pyongyang on South Korean authorities in the rean Peninsula. The opposition July 1-8. To make arrangement to cases of Mun II Hwan and Rim parties have criticized the South attend the festival in Pyongyang, Su Gyong have disappointed the Korean authorities for both im• the South Korean National South Korean people and those plementing the security law and Council of Student Representa• of the international community lacking consistency in their poli• tives (Chongdachyop) set up a who show concern for and sup• cy towards the North. On May 31 preparatory committee which be• port the reunification of Korea. the local court in Seoul publicly gan work in February. Howev• Besides this, South Korean For• heard the case of Mun II Hwan. er, the South Korean authorities eign Minister Choi Ho Jung, The lawyer defending Mun frustrated the people's desire and when he visited the United States pointed out that the accusation turned the invitation down. At not long ago, said in a speech that was not only against the trend of the same time they declared that South Korea had made prepara• anyone who went againsi this de• the times but also violated the tions to apply for separate entry spirit of the constitution. As a cision would be dealt with by ju• into the United Nations. This result the hearing was quickly dicial organs. Under these cir• shows that South Korea has re• ended among the protests of peo• cumstances Chongdachyop de• treated from the position it has ple from all circles. However, the cided to send a representative always upheld in the past, name• South Korean authorities have secretly to Pyongyang. As the not learnt from this, but, using delegate of 1 million students in ly the South and North's simul• the Mun II Hwan ca!se as a pre• South Korea, Rim Su Gyong, a taneous entry into the United text, declared that henceforth fourth-grade student at the Seoul Nations, a policy opposed by the South Korea would move cau• Foreign Language University, North. This further proves that tiously because the north side overcame many obstacles and the South Korean authorities had not taken corresponding ac• spent 10 days travelling through have acted against the nation's tion towards initiatives shown by four countries to Pyongyang. On fundamental interests on the is• Seoul. Actually it is the DPRK July 28 she was ready to walk sues of North and South dia• that has issued proposals and back through Panmunjom to logue and reunification. In ess• drafts for discussion at different Seoul. The South Korean author• ence, South Korea continues to levels and of varied content from ities brazenly declared that Rim follow a policy of two Koreas and early this year. To let the dia• Su Gyong would be arrested maintain the tension and con• logue which • started last year upon arrival. She went on a hun• frontation. With dialogue and ex• make progress, the DPRK was ger strike in Panmunjom in pro• change on its lips, it attempts to ready to continue the dialogue on test against the perverse actions divide Korea permanently. some subjects with South Ko• of the South Korean authorities. Roh Tae Woo's term in office rea even when military exercis• More than 100 representatives is four years. During the time he es were being jointly conducted of students of various countries by South Korea and the United fasted together with "her, support• has been in power the demands States. However, disregarding op• ing her action and condemning for his stepping down have never position from the people in both the South Korean authorities. On stopped. In his remaining time South and North, the South Ko• August 15 when she returned to Roh's position will be more diffi• rean authorities persisted in con• the South, they put her in pri• cult. All the contradictions will ducting the military exercise son for breaking the state secur• be sharper and those which have "team spirit 89" and spoiled the ity law and attempted to kill her. been ignored or covered up will atmosphere for talks. The gov• She had sincerely cherished pa• again emerge. In addition, ijgw ernment of South Korea created triotic sentiments and had taken contradictions may cause new ev• the Mun II Hwan incident, con• her own action as a contribution ents at any time. Whether Roh demned the North, and repeated• to the promotion of reunification. Tae Woo can escape from his ly refused to resume the dialogue. Such a good person is considered predicament will be decided on All this proves that the South by the South Korean authorities how he faces up to these contrad• Korean authorities have not hes• to be criminal. It can be seen that ictions. •

12 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 Construction of the Chinese Legal System by Xiao Xianfu ince the founding of the Peo• lations concerning enterprise ad• cialist constitution in Chinese ple's Republic of China on ministration were issued. history. SOctober 1, 1949, the socialist The period between 1953 and Based on the Constitution, the legal system has undergone four 1965 was a time of socialist National People's Congress also stages—formation, initial devel• transformation and the begin• adopted the Organic Law of the opment, destruction and rapid ning of economic construction, National People's Congress, the advancement. The period be• during which the Chinese legal Organic Law of the Local Peo• tween 1949 and 1952 was a system experienced initial devel• ple's Congresses and Local Peo• time of democratic transforma• opment. ple's Councils at All Levels, the tion and rehabilitation of nation• On September 20, 1954, The . Organic Law of the People's al economy during which China Constitution of the People's Re• Courts and the Organic Law abrogated the Kuomintang's il• public of China was adopted at of the People's Procuratorates. legitimate authority, formulated the First Session of the First Na• Thereafter, central and local laws to meet • immediate needs tional People's Congress, the su• state organs of all levels were and initially established the peo• preme organ of state power. The established and perfected step by ple's legal system. session set the goals for the build• step in accordance with the prov• In September 1949, The Com• ing of sociahsm; defined the ge• isions of these laws. mon Programme of the Chinese neral line for transitional period During the same period, the People's Political Consultative to achieve China's socialist in• government also enacted a series Conference (hereinafter referred dustrialization and the socialist of laws and regulations. Agri• to as Common Programme for transformation of agriculture, culture and handicraft industry short) was adopted at the First handicraft and capitalist indus• were guided to develop from pri• Plenary Session of the CPPCC. try and commerce; determined vate and individual management With its nature that of a provi• the nature of the state, that is, to that of mutual aid co• sional constitution, it provided the People's Republic of China operatives and collectives. the basis for the nationwide con• is a socialist country led by the China's capitalist industry and struction of a legal system. working class, based on worker- commerce were basically trans• Under the Common Pro• peasant alliance, and under the formed into joint state-private gramme, the Central People's people's democratic dictatorship; ownership in early 1957 in com• Government, the Government it stipulated the state's political pliance with the regulations pro• Administration Council and var• system and decleared that all mulgated by the Government ious ministries and commissions state powers of the People's Re• Administration Council in early under the council promulgated public of China belogned to the 1954. a series of laws, regulations and people and that the National In order to carry out state eco• stipulations. These included the People's Congress and the peo• nomic construction and ensure General Organizational Rules of ple's congresses at all levels were fulfillment of the national econo• the People's Procuratorates, the the organs by which the people mic plan, the National People's Marriage Law, the Trade Union exercised state power; defined Congress and its Standing Com• Law and the Agrarian Reform the state economic system and mittee, the State Council and its Law of the People's Republic of declared that the state ensured ministries and commissions is• China. They also launched a ju• the elimination of the system of sued the Agricultural Tax Re• dicial transformation movement exploitation and the building of gulations and the Industrial and to rectify and purify the people's a socialist society step by step; Commercial Consolidated Tax judicial organs politically, organ• prescribed that China was a un• Regulations (Draft) along with izationally and ideologically. At ited, multi-national state with many other administrative laws the same time, some special regu- the national regional autonomy and regulations regarding econo• as the basic policy for solving mic planning, capital construc• * The author is an associate research nationality problems; and stipu• tion, industry, communications, fellow of the Law Research Institute lated the basic rights and duties under the Chinese Academy of Social post and telecommunications, in• Sciences. of citizens. This was the first so• dustrial and commercial admin-

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 13 CHINA to the Constitution at the First Session of the Fourth National People's Congress in January 1975, nothing was done towards the construction of China's legal system during that period. In December 1978, the Third Plenary Session of the Uth Cen• tral Committee of the Commun• ist Party of China broke the shackles of the long-term influ• ence of the "Left" mistakes, cor• rected the Party's guiding ideolo• gy and shifted the focal point of work to socialist modernization, ushering China to a new histor• ical period. The Third Plenary Session of the 11th Party Central Committee summed up experi• ence since the founding of the People's Republic'of China and istration, finance and banking, yone was equal before the law made the strategic decisions to trade, agriculture and forestry, was regarded as something tran• develop socialist democracy and water conservation, meteorology, scending class and was thus criti• strengthen the socialist legal sys• labour and wages, culture, edu• cized and negated; in legal prac• tem. It clearly pointed out, "In cation, science, technology, publ• tice, the principles that "peo• order to safeguard people's de• ic health and sports. ple's courts independently con• mocracy, it is imperative to In order to strengthen admin• duct the administration of jus• strengthen the socialist legal sys• istrative organs, army building tice" and "the local procurato- tem so that democracy is syste• and the management of public rates at all levels independently matized and written into law in order, the National People's Con• exercise their functions and pow• such a way as to ensure the gress also adopted the Military ers without interference by local stability, continuity and full au• Service Law, and the Standing governments" were ignored and thority of this democratic system Committee of the NPC adopted weakened; in legislation, legal and laws; there must be laws for the Regulations on Appointment studies and education, all histor• people to follow, these laws must and Removal of State Personnel ical and foreign materials were be observed, their enforcement at and Above the County-Level excluded or negated and cri• must be strict and law breakers People's Councils, the Organic ticized as erroneous without ana• must be dealt with." The politi• Regulations of the Urban Neigh• lysis; some basic laws, including cal report to the 13th Party Cen• bourhood Committees, the Re• the Criminal Law and the Cri• tral Committee held in 1987 re• gulations on People's Policemen, minal Procedure Law, could not peated the message that "So• the Regulations on Penalties for be worked out as they should; cialist democracy is inseparable Those Who Disrupt Public Se• and some judicial organs, includ• from a socialist legal system. curity and the Frontier Health ing the Legal Administrative Without stability and unity and Quarantine Law. Bureau, the Ministry of Supervi• throughout society, we can suc• During that period, the legal sion and the Ministry of Justice ceed neither in economic devel• system experienced initial devel• under the State Council were dis• opment nor in the reform of eco• opment, it played a positive and solved instead of being further nomic and political structures. In leading role in state and social strengthened, and some had nev• exercising democracy and dicta• life. However, there also existed er been established. torship in all spheres of activity some serious problems. Begin• The legal system was seriously —political, economic and so^al ning in the summer of 1957, damaged during the "cultural —we should see to it that tndre some important principles of revolution" (1966-76). Govern• are laws to abide by, that laws the socialist legal system were ment departments and judicial already enacted are observed and wrongly criticized under the organs were obstructed while the enforced to the letter, and that guidance of "Left" ideas. For in• Constitution and laws were ig• violators are brought to justice." stance, the principle that ever• nored. Except for some revisions Under the guidance of these cor-

14 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 rect ideas, China has made great achievements in the construction of its socialist legal system over the past ten years.

Establish and Perfect the Legal System In 1978, two years after the smashing of the "gang of four" counter-revolutionary group, China revised the Constitution. Owing to the limitations of the times, however, the experiences and lessons of the 30-year social• ist revolution and construction were not fully summed up nor were influences of "Left" ideas on the Constitution thoroughly cleared away. The 1978 Constitu• Self-employed workers pay taxes at the No. 8 Tax Office of the ChongWen Tax tion, consequently, still retained Bureau, Beijing. YUAN RUXUN erroneous stipulations of the on December 4, 1982. statute for management of the 1975 Constitution. Since the Based on the guiding ideology country and for providing the Third Plenary Session of the of the four cardinal principles people with peace and security in 11th Party Central Committee, (upholding the leadership of the a new historical period, it clearly great changes have taken place in Communist Party, the socialist lays out the orientation for de• China's political, economic, cul• system, the people's democrat• velopment of the socialist legal tural and social fields. In order ic dictatorship and Marxism- system. to meet the needs of the new Leninism and Mao Zedong By prioritizing legislative work situation, it was necessary to re• Thought), the Constitution fully as decided at the Third Plenary vise the 1978 Constitution. After embodies the idea of one centre Session of the 11th Party Central two years and four months of (economic construction) and two Committee, the National Peo• effort, the Fifth Session of the basic points (upholding the four ple's Congress and its Standing Fifth National People's Congress cardinal principles and reform Committee speeded up the enact• adopted the present Constitution and open policy). As the general ment of legislation and achieved unprecedented success. Since A staff member of Tianjin Industrial and Commercial Bureau exposes a pedlar's illegal methods. 1979, some 83 proposals have be• Z£NG ZHIJIAK come law, 64 regulations have been revised or supplemented. Involving state and social Ufe, they include the following: —Laws involving state organi• zations and departments include the Electoral Law of the Nation• al People's Congress and Local People's Congresses of the Peo• ple's Republic of China, the Law of the People's Republic of China Governing Regional Na• tional Autonomy, the Procedural Rules of the Standing Commit• tee of the National People's Con• gress, the Procedural Rules of the National People's Congress, and other organic laws on the National People's Congress, local people's congresses, central gov-

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 15 ernment, local governments, Marine Environmental Protec• mic trade and technological co• courts, and procuratorates. tion, the Law on Water Pollu• operation, forestry, energy re• —Laws concerning adminis• tion Prevention and Control, the sources, goods and materials, tration include Food Hygiene Grassland Law, the Fisheries railway, communications, civil Law, the Law on Maritime Law, the Law Governing Miner• aviation, rural and urban con• Traffic Safety, the Law on Ad• al Resources and the Land Ad• struction, environmental protec• ministration of Medicine, the ministration Law. tion, labour and personnel, publ• Regulations Concerning Resi• —Laws concerning culture, ic security, judiciary, civil ad• dent Identity Cards, the Law on education, science and technolo• ministration, education, science Control of the Entry and Exit of gy include the Law for the Pro• and technology and medicine Aliens, the Regulations for Pen• tection of Cultural Relics, the and health. The government has alizing Those Who Disrupt Publ• Patent Law, the Compulsory Ed• also sorted out the many admin• ic Security and Frontier Health ucation Law and the Regulations istrative laws and regulations and Quarantine Law. on Academic Degrees. published since the founding of —Laws on criminal sanctions In order to meet the needs of the People's Republic. include the Criminal Law, the socialist modernization and to Moreover, more than 11,400 Criminal Procedure Law, the Re• effectively implement laws, the laws, regulations and rules have gulations on Punishment of Ser• State Council published the been formulated by both cen• vicemen Who Commit Crimes Provisional Regulations on tral and local government de• Contrary to Their Duties, the Drawing-up Procedures of Ad• partments. Resolutions Regarding the Time ministrative Laws and Regula• Limit for Handling Criminal tions in 1978. According to ini• Strengthened Enforcement Cases, the Supplementary Regu• tial statistics, some 500 adminis• lations for Punishment of Smug• trative laws and regulations have While strengthening its legisla• gling, and the Supplementary been promulgated since 1979. tion, China has also paid atten• Regulations on Punishment for They involve economic structur• tion to implementation of laws. Embezzlement and Bribes. al reform, industry, agriculture, —Rebuilding judicial admin• —Laws on civil cases include finance, taxation, banking, com• istrative organizations. Since the the Marriage Law, the Inherit• merce, customs, foreign econo- Fifth National People's Congress ance Law, the Civil Proce; re-established the Ministry The Basic Law of the Hong Kong Special Adminis• dure Law and the General trative Region of the People's Republic of China of Justice at the 11th Ses• Principles of Civil Law. (Draft) was adopted at the Sixth Session of the sion of its Standing Com• —Laws in the economic Seventh National People's Congress Standing Com- mittee in July 1979, local field include the Law on mlttee on February 21, 1989. CIUBAOLIN judicial departments and Chinese-Foreign Joint Ven• bureaus above the county ture, the Income Tax level have been set up. In Law Concerning Chinese- 1983, the Ministry of Se• Foreign Joint Venture, the curity and its local branch• Individual Income Tax es were established and giv• Law, the Economic Con• en the responsibility for tract Law, the Income Tax gathering information on Law Concerning Foreign espionage cases. In ordt^r' to Enterprises, the Law on supervise the work of gov• Sino-Foreign Economic ernment departments' And Contracts, the Law on their personnel, the Minis• Foreign-Capital Enterpris• try of Supervision was re• es, the Statistics Law, the established in 1986 while Accounting Law and the supervisory departments Law on Enterprise Bank• above county level under ruptcy. the local people's govern• —Laws concerning na• ments have been or ^aie tural resources and envi• being established. In addi• ronmental protection in• tion, in recent years, the clude the Forestry Law, government has set up au• the Law on Environmen• diting departments to su• tal Protection, the Law on pervise financial affairs

16 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 CHINA and strengthened the supervisory foundation. In November 1985, nary cadres, 6.5 million. Legal departments concerned with in• the Resolution on Disseminating knowledge has also spread wide• dustry, commerce and taxation. Legal Knowledge Among Resi• ly among the masses. About 95 —The judiciary has been per• dents was adopted at the 13th percent of all primary and mid• fected. The revised Constitution Session of the Sixth Nation• dle schools have offered legal of 1978 restored the establish• al People's Congress' Stand• courses; some 85 percent of col• ment of the People's Procurato- ing Committee. The focal point leges and universities have giv• rate that was cancelled in 1975; is to spread knowledge of the en students legal education; the it restored and perfected regula• Constitution, the Criminal Law, Party and Youth League schools tions first written for the 1954 the Criminal Procedure Law, the at all levels, various types of Constitution which allowed the General Principles of the Civil cadre schools and television people's courts and procurato- Law, the Civil Procedure Law universities have all begun giv• rates to independently exercise (For Trial Implementation), the ing legal courses; in enterprises, judicial and supervisory authori• Marriage Law, the Inheritance about 73 percent of workers and ty and to be free from the inter• Law, the Economic Contract staff members of state-owned en• ference of administrative depart• Law, the Military Service Law terprises have learnt the basics of ments, social organizations and and the Regulations for Penaliz• the law; and in rural areas, 30 individuals; in handling crimin• ing Those Who Disrupt Public percent of farmers have received al cases, public security organs, Security. legal education. people's procuratorates and Over the past few years, lead• In short, since 1976, China's courts act under the principle of ing cadres at various levels have construction of its legal sys• a division of labour, with each participated in law classes. Ac• tem has developed rapidly and having specific responsibilities cording to statistics, in the first achieved great success. Now, ma• and working in co-ordination two years of the campaign to jor laws highlight the fact that with each other to guarantee the spread legal knowledge, the the socialist legal system with correct and effective law en• number of leading cadres of Chinese characteristics is taking forcement. provincial level who took part in shape; the judiciary has been —Widespread dissemination legal study was nearly 1,200 or strengthened and the people's le• of legal knowledge. The nation's 94 percent of all cadres; at the gal consciousness raised. Taken adherence to the Constitution prefectural or city-level leading together, these facts show a pros• and the law, adherence by both cadres, over 20,000 or 95 percent perous future for the legal sys• the leaderships and the masses, is of all cadres; at the county-level tem as it continues to be im• an important part of the legal leading cadres, 450,000 and ordi• proved. •

Retrenchment and Economic Growth

LI Guixian, state councillor and president of the People's Bank of China, in a recent interview with our staff reporter Han Guojian, talked about China's current financial situation and policies, measures to be taken for ongoing financial reform and repayment of foreign debt.—Ed.

Question: How do you assess money is higher than last year. granted by all the nation's banks the current financial situation in In the first six months of this in the first half of this year in• China? Can the retrenchment pol• year, a net total of 5.294 billion creased by 21.2 billion yuan, a icy bring about expected results? yuan was recovered, while dur• drop of 34 billion yuan from the Answer: This year the economy ing the same period last year, a same period last year. On the has developed smoothly and the net total of 8.861 billion yuan other hand, bank savings by , financial situation is better than was over-issued. The scope of na• both ruraland urban residents anticipated. We see this, for ex• tional loan has also been brought have risen steadily. From Janu• ample, in the fact that the under control and loan structure ary to June this year, the total amount of recalled over-issued restructured. For example, loans increase was 64.4 billion yuan,

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 17 CHINA up 22.4 billion yuan from the of goods for export, and mulation and modification of same period last year. Foreign the production of large and financial laws and regulations exchange earnings are slightly medium-sized key 'enterprises. for insurance, securities, negoti• higher than expenditures and No more loans will be given to able instruments, and foreign ex• this has resulted in a margin• those enterprises whose produc• change management, strengthen al increase of total foreign ex• tion is out of tune with the regulatory oversight and imple• change reserves. state's industrial policies and mentation of the existing laws The retrenchment policy is whose products are of poor qual• and regulations. correct because it's fulfilling ex• ity, high price and without mar• All these measures have prod• pectations. It has played a posi• ket outlet; loans already granted uced positive results as well as tive role in eliminating econo• to them have been and will be some new problems. For exam• mic over-heating, holding down called back without hesitation. ple, such measures as the open• swelling investment and con• —Ensuring a steady growth of ing of inflation-proof deposit sumption and promoting market urban and rural residents' bank services and the raising of in• and financial stability. Moreov• savings by opening long-term terest rates have proved satisfac• er, it has not given rise to stag• inflation-proof deposit services, tory in attracting residents' per• flation. raising their interest rates, in• sonal savings. However, these creasing categories of saving de• savings deposits, actually part Q: What specific measares have posits and improving banking of over-supplied money, can be been adopted for the retrench• services. converted into cash at any time. ment? Is their impact on the econ• —Cleaning up enterprises' ar• Once a bank run occurs, finan• omy good or bad? rears and, in accordance with cial stability is affected. Gener• A: In the process of retrench• the state's policies towards in• ally, such deposit services have ment, we have put in place a dustry and credit, increasing in• increased banks' costs. All of loan policy intended to "control vestment of funds to promote these problems are now under the overall amount of loans to be the development of enterprises' study. issued, readjust the structure of production. loans to be issued and guaran• —Strengthening the central Q: At present, many large and tee the construction of key pro• banks' management of funds so mediam-sized enterprises are jects." This policy can be read• as to grant timely short-term handicapped by fund shortages. justed, as needed, in a timely loans in strict accordance with Does this mean the retrenchment manner. Major measures for the prescribed quotas and range of policy will soon be lifted? implementation of the retrench• use; and bolstering reserves re• A: The imposition of retrench• ment policy are: quirement for use in savings ment is bound to influence en• —Strengthening planned withdrawals, specialized banks' terprises' financing and reduce management. A system of "quo• reserve funds and government the supply of funds. This is inev• ta management and responsibili• deposits. itable and so enterprises have to ty" in the granting of loans —Strengthening management adapt their productioil and man• was introduced for specialized of foreign exchange and foreign agement techniques to the new banks. At the same time, a debts; actively supporting export policy. They have to try and tap society-wide credit programme trade; and devising satisfactory their internal potential, make was instituted to project all fin• arrangement for repayment of their products more commensur• ancial institutions' loan-granting all foreign debts so that Chi• ate with the needs of society and activities, such as the issuance na's heretofore good reputation be more competitive in the mar• of stocks and bonds and fund- in the world financial markets ket. Retrenchment thus is a pro• raising activities and to bring the will not be damaged. cess of readjusting the industrial overall loan amount under strict —Launching a thorough make-up and spurring enterpris• control. clean-up and consolidation drive es to reshape their product mix. —Adjusting loan structure. of companies established by fin• As for the problem of fund Loans which would have gone to ancial institutions, localities and shortage confronting enterprises, some projects have been pared government departments; and it is caused partly by reduced down and the funds saved have increasing management over the supply of money and partly by been funneled into areas of more inter-bank money market so as overstocking of products, re• need, such as financing the prod• to ensure a positive financial or• duced working funds and failure uction and purchase of farm and der. to use their increased income side-line products, the purchase —While speeding up the for• from higher priced finished

18 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 products to offset the shortfall in deposits and loans won't solve became too large. Business com• funds caused by higher raw ma• the current problems. petition among banks, com• terials prices. So, to alleviate pounded by delayed manage• large and medium-sized enter• Q: Do increased production costs ment modernization, has caused prises' fund shortage, a pack• and the consequent reduction of some confusion. To deal with age solution has to be instituted. profits of some industrial prod• this, the central banks' macro- Banks will continue to respond ucts have something to do with control measures need to be im• favourably towards large and the increased loan interest rate? proved. The specialized state medium-sized energy, transport A: To put a hold on inflation banks are also still bothered with and raw materials enterprises as soon as possible, the People's some problems which call for in granting loans in accordance Bank of China adjusted upwards immediate solution. with the state's industrial policy. the interest rates for savings de• The goal of financial reform Simply put, this readjustment of posits and loans, respectively in during the next phase is, while the loan structure will be used to September last year and Fe• invigorating the financial sys• transform the industrial bruary this year. Overall, a high• tem, to establish a complete re• make-up. er interest rate for loans has gulatory system, with stress on pushed up, to a degree, enter• strengthening the central banks' Q: What measures will be taken prises' costs of production. Ini• macro-regulating functions and to deal with the overstocking of tial calculations indicate that be• giving further play to the lever• products and the phenomenon of fore loan interest rates were age of credit and interest rates. "external circulation" of funds raised, interest payments repre• As for the stock system, it will outside of the bank system? Will sented some 2.85 percent of the continue to be experimented in the interest rates of bank savings production costs; after the in• a few pilot areas in accordance and loans be further raised? terest rates were raised, this rose with the State Council's deci• A: Some overstocking of prod• to 3.57 percent. The increase is sions. In co-ordination with this, ucts is caused by the unreason• high in itself, but it is still quite the banks will study and formu• able product mix, poor market• low when compared with the ge• late the relevant management ability and poor quality of prod- neral rise in prices. In our view, measures. ucts= Of course, overstocking though, the major contributing The development of financial also appeared for products with factors to increased production markets has played a positive a good market. This is caused costs and reduced profit rates role in stimulating the circula• partly by the weakened desire are the drastic increase in prices tion of funds. The current prob• for some products and partly by for raw and semi-finished mater• lem is loose management. Dur• the forced rise of prohibitive ials, the irrational product mix, ing the period of rectifica• prices, both a result of last year's sluggish sales caused by a fluc• tion and consolidation, financial buying spree. As for "the exter• tuating market, increased back• markets should be developed nal circulation" of funds, quite a logs and slow circulation of more steadily; and the relations large amount of funds can be funds. At the same time, con• between the banks' distribution brought back into the bank sys• sumption funds are growing fas• of funds and the raising of funds tem through the ongoing clean• ter than production. through the markets dealt with up and consolidation of compan• in a proper fashion. Financial ies and the clean-up of arrears Q: What is the next step for fin• markets now effectively co• among enterprises and by streng• ancial reform, say, the stock sys• ordinate the adjustment of funds thening the management of the tem, the financial market and the among enterprises. financial market. In addition, transformation of banks into en• Our country adheres to banks will formulate new regula• terprises? the principle of combining a tions, improve banking rules and A: Financial reform has been planned economy with market services to reduce the drainage going on for ten years. Although regulation. Specialized banks as of credit funds. the orientation is correct, many state banks must implement the "^As to whether the interest problems have surfaced in the state's principles, policies, laws rates of savings deposits and process. Last year's inflation, in and regulations. They should not loans will be raised or not, that particular, accentuated the diffi• operate only for the sake of prof• will be determined by the overall culties still to be overcome. The its. Therefore, in the next step needs of the economy. As things major problem was that the op• of financial reform, specialized now stand, merely relying on eration of financial institutions banks should establish and im• higher interest rates for saving grew too fast and their numbers prove the credit responsibility

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 19 CHINA system, strengthen risk manage• the various measurement indica• over the same period last year. ment of assets and improve the tors of a country's debt repay• Allowing for capital and interest various forms of economic res• ment capacity, China is well repayment, this year's borrow• ponsibility system. within a margin of safety. Even ings basically come up even with around 1992, the peak year for those at the end of last year. Q: Next year is the peak year for debt repayment, the repayment Since the anti-government tur• debt repayment. Will repayment rate for our country's total for• moil and rebellion in Beijing, of such a large amount of debt eign debts will be lower than some foreign banks and finan• adversely affect the development internationally accepted limits. cial institutions, influenced by rumours created by news media of the national economy? Third, China boasts strict and in the West, have postponed or comprehensive rules for foreign A: Calculations indicate that the suspended the granting of new peak year for foreign debt repay• debt management. Except for di• loans to China. This has af• ment will be around 1992. Even rect foreign investment, all bor• fected, to varying degrees, the in the peak year, however, for• rowings by different localities, smooth management of China's eign debt repayment is still man• departments and enterprises are foreign investment. However, ageable, so there will be no ad• incorporated into the state plan our country can afford to repay verse impact on the development as a guarantee to control the all foreign debts. For example, of the national economy. This is state's overall foreign debts. Tianjin, Dalian, Changchun and because, first, the structure of Fourth, the central government some other cities have paid back our country's foreign debts is es• has-made arrangements for debt on schedudle all capital and in• sentially rational. Of all repayment and is fully prepared terest due since July. medium- and long-term foreign for 1992. In my opinion, some financial debts, those funds used for ener• institutions in the West should gy, communications, heavy in• Q: Compared with last year what be more far-sighted. I believe, dustry, chemical industry and about this year's borrowing and however, as time goes by, more other basic industries comprise a its impact on the economy? and more foreign financial • in• large proportion. This will prove A: By the end of June this year, stitutions will continue to co• extremely beneficial in promot• our country's borrowings from operate with China on the basis ing development of the national foreign banks and financial in• of equality and mutual benefit. economy. Second, judging from stitutions increased 34 percent • China's Stock and Bond Market

Although the main purpose of China's issuance of stocks and bonds is to generate funds for national construction, it is also an important step in the reform of its financial system. by Jin Jiandong

hina's stocks and bonds are while banks were permitted to issued mainly by state- issue bank bonds. At the sanie Cowned businesses under time, bonds were also sold to for• the unified guidance of state eign countries to raise foreign planning and subjected to strict exchange funds. control and supervision. By the end of 1988, China had In 1981, when China began to issued 86 billion yuan Renminbi issue state treasury bonds, it was (RMB) bonds, including 40 bil• using the credit of the state as lion yuan of state treasury a direct means to raise funds. bonds, 5.5 billion yuan for spe• Some enterprises were later al• cial construction, 3.2 billion lowed to issue stocks and bonds yuan for general state construc• tion, 8 billion yuan for capital * The author is director of the Financial construction, 6.8 billion yuan for Administrative Department of the Peo• Jin Jiandong. ple's Bank of China. fiscal bonds, 8.5 billion yuan for

20 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 CHINA bank bonds, and 14 billion yuan for enterprise bonds. By the end of February 1989, some US$5,057 billion had been is• sued in various foreign curren• cy bonds. For 1989, the state planned to issue 41.5 billion yuan of various RMB bonds, 5.5 billion yuan of which would be state treasury bonds, 12 billion yuan for value-proof bonds, 5 billion yuan for special state bonds, 5.5 billion yuan for capi• tal construction bonds, 7 billion yuan for bank bonds and 6.5 bil- hon yuan for enterprise bonds. There are also plans to issue for• eign currency bonds. Issuance of stocks in China is still in a trial stage. By the end of 1988, an aggregate total of 3.5 billion yuan had been issued, 2.13 billion yuan of which, or 61 percent, to the public. The re• overdrafts from the bank to cov• mainder was issued to joint- Backgrounds and Aims er the government's deficits. Be• stock units and each enterprise's While China's issuance of tween 1979 and 1985, when own workers and staff members. stocks and bonds is intended to production increased rapidly China first allowed enterprise raise funds, it must also ensure and capital construction was stocks and bonds to be trans• that the needs of the economic continuously expanding, deficit ferred on the market in 1986, and financial reform are met. occurred for several years' run- and on April 1, 1988, state trea• First among these needs is . ning. To make up the deficit, sury bonds were openly traded the requirement of the public to overdrafts from the bank was re• on an experimental basis in five have a choice of financial assets. sorted and the People's Bank of cities—Shanghai, Guangzhou, The form of financial assets was China was forced to issue more Wuhan, Chongqing and Shen• limited to bank savings deposits. money, an action which resulted yang. As of now, more than 90 The people have no alternative in inflation and price hikes. In cities and 410 financial insti• but to deposit their money in 1986, instead of continuing this tutions throughout the country banks. These, however, were few process, the financial deficit was have established securities' tran• in number and those in opera• finally resolved by issuing state saction counters, by which either tion were inefficient and offered treasury bonds. individuals or agencies may buy low interest rates. The public's A third function of the new and sell a variety of securities in enthusiasm, therefore, was un• financial market is the reform of cash transactions. By the end of derstandably low. Although the bank credit system so that 1988, the annual volume of tran• stocks and bonds do have some enterprises will be able to raise sactions had reached 2.74 billion risks, their rate of return is ge• funds themselves. Beginning in yuan, 2.5 billion yuan of which, nerally higher than that of sav• 1984, the state allowed enterpris• or 91 percent, were state trea• ings deposits and so they can at• es to raise funds directly from sury bonds. The price of such tract more idle capital. A further the public through issuance of transactions fluctuates with advantage is that with a securi• stocks and bonds instead of allo• market conditions though the ties' transaction market, bond• cating circulating funds to them. annual return rate of the state holders can, at any time, ex• Lastly, to facilitate China's treasury bonds bought over the change their bonds for money opening to the outside world, counter has been running at be• whenever needed. foreign currency bonds are is• tween 10 to 20 percentage points The second need is to resolve sued to raise foreign exchange higher than savings deposits in the problem of deficit spending funds. This, however, is strictly the same period. and halt the practice of using controlled by the state.

BEIJING REVIEW, OCT. 30-NOV: 5, 1989 21 CHINA

China will consider and approve fied control of the central bank. Features the issue volume based on the This is because China's economy China's stock and bond mar• unified plan. State planning is has been in short of investment ket is developing under the prer• also evident in their insistence for quite some time and so the equisites of public ownership that bonds used for investment unified control of the People's and adherence to socialist orien• in fixed assets be included in the Bank of China is conducive both tation. It is a product of the loans to be used as the state's to preventing local governments planned commodity economy, investment in fixed assets and and enterprises from blindly ex• the open policy and financial re• considered as a part of the na• panding investment in fixed as• form. As a result, it possesses the tional overall investment scale. sets, and to effectively controll• following features. This is obviously different from ing and regulating the money Public Economy Is the Mainstay. the West where issue and trans• supply. Floaters, or issuers of bonds, are fer of stocks and bonds are guid• principally the central govern• ed mainly by markets. ment, state banks and state-run Practice of a Clearly Defined In• Function enterprises. Bondholders are dustrial Policy. In addition to Judging from the experience both individuals and units, in• state treasury bonds which are to date, stocks and bonds have cluding state-owned enterpris• used to make up for a shortage produced the following positive es, institutions and banks. The of general finances, other bonds, effects in regard to China's eco• joint-stock system practised by such as bonds for the special nomic development and the re- China is principally based on state construction and general forrii of the nation's financial public ownership, with the state, state construction, special state system: state-owned enterprises and bonds and value-proof bonds, banks possessing most of the are all used to resolve the short• —Raised a large amount of shares. This is the major differ• fall of funds for energy re• stable funds for the state, a situa• ence between stock and bond sources, transport, raw materials tion which is conducive to recov• market of China and of Western and other infrastructures. Bank ery of paper money and the con• countries. For this reason, Chi• bonds are mainly used to solve trol of inflation. na's system of public ownership the shortage of circulating funds —Promoted the rational read• will not be changed by issuing in the state-run, large and justment of the economic struc• stocks and bonds or by exper• medium-sized enterprises. En• ture. First, most issues of stocks imenting in the share systems. terprise bonds are mainly used and bonds are put into industries The practice of a few financial to solve the shortage of invest• whose products are in short sup• oligarches monopolizing the ment resources in the technical ply, such as energy resources market and creating speculation transformation of central and lo• and raw materials, as well as will not appear. cal key enterprises. transport and communications, Central Bank's Role. On behalf so as to promote a reasonable Acceptance of State Planning. Is• of the state, the People's Bank of readjustment of the industri• suance of all bonds, including China brings stocks and bonds al structure; secondly, many state treasury bonds, bank under unified administrative bonds, especially the special bonds, enterprise bonds and control and supervision. In state bonds, bonds for key con• stocks in China has been incor• Western developed countries, ge• struction and capital construcr porated in a unified plan for• nerally speaking, the central tion, are purchased by localities, mulated by the State Planning bank, as a monetary control au• departments, enterprises and iii|- Commission to strive a balance thority, buys and sells state stitutions with their surplus between various needs of the bonds to regulate and control fi• funds and post-tax profits. This economy. The unified plan is in• nances through open-market op• has alleviated difficulties for tended as a micro-economic con• eration with the aim of bringing central finance on the one hand, trol over the issuance of various the money supply under control. and on the other, prevented var• bonds by the state. State treasury As for the administration and ious localities, departments, en• bond issues, for example, are or• supervision of banks' stocks and terprises and institutions from ganized by the Ministry of Fi• bonds, these are generally imple• unreasonably expanding invest• nance according to the plan ap• mented by a special administra• ment collected on their own in proved by the State Planning tive commission or agency esta• fixed assets, thus, playing a pos• Commission and, in regard blished by the state. In China, itive role in the structural read• to bank bonds and enterprise however, they are under the uni• justment of central and local fi• bonds, the People's Bank of nance. This also has transformed

22 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 the situation wherein the large differences of price banks bore a long-term in• between regions, and creat• vestment in fixed assets ing the opportunity for ille• with short-term savings de• gal speculation. posits funds. 3. Lack of intermediate —Strengthened enter• transaction agents and su• prises' vitality. Enterprises pervisory organs, such as are allowed to issue stocks security broker agencies, and bonds, so as to stimu• security rating institutions, late their circulation of asset assessment institu• funds. On the other hand, tions, information consult• enterprises, facing thou• A bond certificate issued by the China Gold-Cup Automobile Co. Md. in Shenyang. HAN GUOJIAN ing services and investiga• sands of stockholders, will tive institutions to oversee direct shoulder economic res- Problems the ponsibiHty if they fail to repay market. Functional organs within stock administrative un• them in time. This is different Owing to lack of management from state bank loans, the repay• experience, there exist the fol• its are incomplete either. ment of which can be postponed. lowing problems in the stock and 4. Lack of effective macro- This encouraged enterprises to bond market. control. Regulations and rules improve their fund management 1. There is little variety among are not fully established and dai• by every means possible and has stocks and bonds. The statejrea- ly supervisory and managerial improved their own manage• sury bonds, bank bonds and en- work is done poorly, so that the ment as well. At the same time, terprice bonds all have one, issuance and transfer of unap• the high interest rate slowed long-term fixed interest rate. proved stocks and bonds, as well down inefficient investment pro• This lack of variety is especially as other indiscriminate and arbi• jects and helped to cool over• true for state treasury bonds, the trary collection of funds, have heated investment. term of which is more than three occurred. This interferes with —Promoted reform of finan• years, a situation clearly not the normal financial order. cial system. The issuance of state suitable for periods of fluctuat• 5. Recordkeeping, mostly done treasury bonds has helped solve ing prices. This, of course, influ• by hand, is backward. Because of deficits caused by continuing ex• ences the issues' attractiveness a lack of computers and other penditures and inadequate in• to buyers. Some enterprises have modern, sophisticated tools, in• vestment in economic construc• publicly issued bonds without formation is unavailable and the tion and encouraged the state due appreciation as to the value quality of workers is low. treasury to keep an eye on its of their properties. China will continue to develop ability to repay debts, to strive to 2. The methods used for buy• its stock and bond markets based increase revenue and reduce ex• ing and selling do not lend them• on the requirements of economic penditure, and to maintain a bal• selves to the needs of the market, development and deepened re• ance between revenue and ex• especially when there is exces• form. In regard to recent prob• penditure. A system which com• sive administrative interference. lems, overall clean-up and im• bines direct finance with indi• State bonds, in particular, are provement will be made in line rect finance, with the latter as a subjected to administrative ap• mfein means, has thus been es• with the improvement and recti• portionment. This influenced fication of the economic and fin• tablished, and the channels by the reputation of both current which banks supply direct cre• ancial order, retrenchment and state bonds and future issues. tightening of the money market dit and loans to enterprises has The selling range of other bonds and the strengthening of the changed. is also too narrow. They are micro-economic control. On this mainly issued with banking in• —Promoted the experiment basis, laws and regulations will with the joint-stock system. It stitutions acting as the sole be formulated, and daily super• bias promoted the separation of agent, a method which lacks the vision strengthened so as to property rights from managerial attraction of commercial tech• rights within enterprises and giv• niques. At present, only retail gradually bring the stock and en an impetus to horizontal ties counters conduct stock transac• bond market under comprehen• between enterprises. tions and all are limited to cash sive legal control and give more —Multiplied the channels to trades. Their networks also are play to its role in China's mod- raise and absorb foreign funds. few and scattered, leading to ernmization drive. •

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 23 Foreign Trade Increase in Dalian by Our Staff Reporter Han Baocheng etween July 1 and 10, the ing in this fair, 833 were from tween July 1-10. In contrast with B third export commodities Hong Kong and Macao, 692 were the Guangzhou's spring and au• fair in northeast China and from Japan and 86 from the Un• tumn export commodities fairs, Inner Mongolia since 1987 was ited States, while quite a number the Dalian fair has its distinc• Ijeld in Dalian, the southernmost came from Taiwan, South Ko• tive regional character. Its aim port city on the Liaodong Penin• rea, Singapore, Malaysia and the is mainly to serve local enterpris• sula in Liaoning Province. The Federal Republic of Germany. es by promoting the export of fair was unexpectedly successful Around 2,600 people represent• their products, thus providing with total volume of export bus• ing 337 Chinese companies also opportunities for them to enter iness amounting to US$494.3 attended. The Chinese partici• the international market. million, an increase of 42.5 per• pants Came not only from the The mix of export commodi• cent over the last fair. northeast and Inner Mongolia ties also carries a strong locaf Before opening, there was but from Xinjiang Uygur Auton• feature. Corn and soybean, metal some concern that the fair might omous-Region, the provinces of and non-metal mineral products, be a failure because of the rebel• Gansu, Qinghai, Guangdong and mechanical and electronic prod• lion in Beijing in early June. Jiangxi and cities such as ucts, petrochemical products, To eliminate the adverse effect Wuhan, Luoyang and Shenzhen. clothing, light industrial and caused by distorted reports made Fu Yudian, secretary-general medical products, animal prod• on the events by Western, Hong of the Dalian municipal govern• ucts and other farm and side• Kong and Taiwan mass media, ment and a fair organizer, said line products are all transacted the fair organizer issued a second the fair's success showed China's in large volumes in the area. invitation to clients, patiently ex• policy of opening to the outside At present, Fu said, the plaining China's situation espe• world had not changed and that city has a dozen comfortable cially in Dalian and reaffirming there were large numbers of for• guesthouses and hotels suitable the fair schedule. The result was eigners doing business with for foreigners, which can accom• quite successful. Among the China. modate more than 10,000 foreign 1,982 business people from 36 According to Fu, the fair will businessmen and tourists. In re• countries and regions participat• be held in Dalian annually be• cent years, the city's transporta- A factory district in the Dalian development area.

24 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 CHINA

tion and communication facili• ties have also notably improved. With these services in place, Fu said he was confident of Dalian's ability to jnake the future fair more successful. The fair's importance is based on the substantial returns it brings to the city. The most ob• vious benefit to Dalian lies in export trade. The fair has earned Dalian's foreign trade compan• ies US$125 million and has enhanced Dalian's reputation at home and abroad. The fair has helped train large numbers of foreign trade personnel and enhanced local companies' sense of participation in internation• A workshop of the Harada Industrial Co. Ltd., in Dalian, a wholly Japan-funded al market competition. Furth• enterprise. ermore, the fair brings Dalian Corp. which has its own organ• ing credit have been taken, the each year a number of invest• ized import of raw materials and most pressing matter at the mo• ment contracts signed with for• export of products, putting an ment is still the lack of funds. He eign companies. end to the former state in which said that even now Dalian does it could barely bring its produc• not have a bank to help it in this tion capacity into full play be• regard, which limits the develop- Self-Managed Export cause of the shortage of raw ma• rhent of foreign trade. He hopes Before economic reform, Dali• terials supply at home. In the the problem will be resolved with an had no independent control first half of this year, it reached the deepening and further devel• on export trade despite its status US$5.62 million in independent opment of reform. as a port city with 3,000 industri• export volume, the figure is esti• In its capacity as a port city, al enterprises. Its import and ex• mated to exceed US$10 mil• Dalian provides trade services port business was managed by lion this year. Granting Dalian for the inland towns. It currently the Liaoning Provincial Foreign decision-making power has en• has 71 permanent offices set up Trade Corp., an arrangement un• couraged enterprises to quickly by governments in the northeast• der which municipal initiatives edge their way onto the world ern provinces, in the Inner Mon• were quite constrained. For a market. golian Autonomous Region and long time, Dalian's purchase vol• Up till now, DaUan's 12 for• in China's other areas. Addition• ume did not exceed 100 million eign trade companies, each oper• ally, 96 business offices set up by yuan. In 1985, when the state ating independently in their ex• foreign companies. Hong Kong granted Dalian the provincial- port business, have established and Macao are operating. level right of economic manage• steady business relations with Among these, Japan has 52, ment, the independent export more than 1,000 clients. Qin Xia- Hong Kong 22 and the United volume reached US$18.6 million otang, deputy director of Dali• States ten. Each year, tens of that year. Since then, the export an's Foreign Economic Relations thousands of foreign business• volume has dramatically in• and Trade Commission, said that men along with stream of creased and, in 1988, reached Dalian's export is very promising Chinese businessmen come here US$415.7 million. In the first and its export situation generally for trade talks. The development half of this year, the city re• good. Since last year, however, of foreign trade has promoted gistered an export volumn of because of the economic re• the flourishing of urban com• $316 million and its annual trenchment policy, the tight merce, the catering trade and $500 million quota of export money market and difficulty of tourism in Dalian. volume is expected to be easily obtaining loans, foreign trade fulfilled. companies have been short of Foreign Investment An example of the benefits of purchasing funds. Although such independent decision-making is measures as clearing up store• Increases the Dalian Chemical Industrial houses and collecting outstand• The number of examined and BEIJING REVIEW, OCT. 30-NOY,. 5, 1989 25 approved projects with foreign telephones installed, while an in• by Boeing 747, only 24 kilo• investment increased by 15 per• dustrial district, residential area metres away. cent in the first half of the year and commercial tourist district Yu Huaijiang, senior official when compared with the same have taken shape. Highway net• of the development area, noted period last year. June figure ac• works have been built, most im• that the administrative commit• counted for 30 percent of the to-, pressive of which is the tee of the development area has tal, the highest among all the six 12-kilometre-long express high• established bureaus for econo• months. The Dalian-Huaneng- way that crosses the sea, connect• mic development, labour, plan• Onoda Cement Co. Ltd., a ing the development area and the ning and construction, supervi• Chinese-Japanese joint venture Shenyang-Dalian express high• sion and auditing, finance and whose establishment was ap• way that has been opened to taxation, industry, commerce proved on June 23, was of parti• traffic. and price. Compared with com• cular note. It is China's biggest On top of the Fort Hill, located mittees of the same level in Chi• joint project so far in the field of within the development area, one na's other towns, however, the building materials, with a total has a wide view of the surround• committee keeps its management investment of US$188 million ing area. To the east is the Bohai structure quite simple. and for a co-operation period of Sea, backdropped by Dalian's sa• Their regulations favour effi• 33 years. tellite town of Jinzhou. Dajiao ciency, Yu said, and in order to Between January 1984 and Bay port area and a power sta• make it easier for foreign busi• June this year, Dalian approved tion with an installed capacity of nessmen to invest and build fac• 291 foreign-funded enterprises 700,000 kw, currently under con• tories here, the administrative with a total foreign capital of struction, can also be seen from committee has established a ser• US$410.6 million. Among these, Fort Hill along with the Zhou- vice centre for project promotion 164 have already begun opera- shuizi Airport, suitable for use so that all formalities can be fin• tion and are doing well The finish product wori^shop of the Dalian-Pacific Printing alized in one place. enough to have earned Circuit Factory, a Sino-US joint venture. xu£ CHAO This positive invest• a surplus in their for• ment environment has eign exchange balance. brought a healthy re• Additional signs of turn. By the end of the area's economic de• June, there were 106 velopment is evident to foreign-funded enter• the city's north. Dal• prises set up under con• ian's Economic and tract, of these, 58 have Technological Devel• begun operation or opment Area, covering trial production. 20 square kilometres, is Among the city's 11 located 27 kilometres foreign-funded ven• northeast of the urban tures, nine are situat• district. Since October ed in the development 1984, construction of area. its first-phase projects At the foot of the in an area of some five Fort Hill, there is a square kilometres has uniquely designed been under way. Plan• Sino-US hotel. Inn ners are aware, howev• Fine Hotel, which, ac• er, that central to the cording to Hu development area's fu-, Hongqiang, assistant to ture is the continued' the hotel's general improvement of the in• manager, was just com• vestment environment. pleted and is not yet So far, a transformer formally opened. How• substation, waterworks ever, they have already and liquified petro• begun to accommodate leum gas station have guests. He worried that been built and 4,000 the hotel, after it programme-controlled was formally opened, 26 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 would not be able to meet the operation zones dealing in pe• loaned US$96 million and China demand for hotel accommoda• troleum, coal, grain and sundry invested 267 million yuan. Ulti• tions with its 200 guest rooms. goods have taken shape, and 95 mately, there will be 80-90 deep- of them have been mechanized. water berths in the Dajiao Bay A Busy Port Beginning in 1980, the port up• Harbour, and as a first step to• graded its management marked• wards this goal, ten 100,000-ton- Fast-growing trade and econo• ly by gradually introducing class berths are scheduled to be mic development has led to un• computer-controlled techniques, completed by the end of 1995. precedented harbour construc• industrial television and optical At that time, the annual cargo- tion and, Since 1984, the Dalian fibre communication monitoring handling capacity of Dalian Port Port has undertaken a series of system. But even after such im• will amount to 80 million tons. projects to suit its rapidly ex• provements and the renovation Dalian hopes, Shen said, to panding trade needs. In 1988, the of the old port facilities at Hes- build the port into a modern, port handled up to 48.5 million multi-functional harbour, a hub tons of cargo, of which exports hang (Monk) Island and Xian- for container shipping and grain made up 70 percent and the total glujiao Harbour, it still needs trade in Northeast Asia. Future import and export value reached expansion. Construction of the development of Dayao Bay will US$8.19 billion, second only to Dayao Bay Harbour began last be geared towards a. free-trade Shanghai. Now, the Dalian Port year. port, administered by customs, iiandies more than 2,000 vessels Dayao Bay, Harbour area, with up-to-date warehouses, every year with the opening of Shen said, is endowed with a loading and unloading equip• new business routes to more than wide land area and a rocky sea- ment, and serviced by commer• 140 countries and regions. base, and by filling in the seabase cial and industrial processing Shen Chun, deputy director of the docking facilities can be ex• centres, as well as trade and in• the Dalian Port Office, said Dal• tended 100 metres longer into formation service centres. • ian boasts favourable natural the sea where the harbour depth Shen Chun said he does not conditions such as broad and reaches 13 metres. For the first worry about future prospects of deep water and an ice- and silt- stage, two 30,000-ton-class con• China's foreign trade. China will free sea as well as connections tainer berths and two 25,000-ton- continue to be an open country, with the vast hinterland. The class multi-purpose berths were and inevitably increase its reci• port now has 58 berths, including to be completed by the end procal trading with foreign coun• 26 for 10,000-ton ships. Special of 1991, and the World Bank tries. •

Union Car Rental Co.

The Union Car Rental Co. in Beijing provides not only cars of the highest quality but also first-rate service: • Standard taxis. • High-quality sedans, such as big and small Cadillacs, Chevrolets and Benz 280s for rental. • Special arrangements for individual and group sightseeing tours and conferences. • Long-term rental to foreign enterprises and organizations in Beijing. If you wish to rent for more than a year, we will provide you with a new car UCR stored in our garage and you will enjoy preferential treatment. Address: Guanghuidongli, Chaoyang District, Beijing, China Tel: Dispatch office: 500.5187 Dispatch office of the Great Wall Hotel: 500.5566—2339 Dispatch ofiice of the Beijing Exhibition Centre Hotel: 831.6633—7144 Telex: 22999 CITIC CN

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 27 5J Si 5i ^ Si • I ^ < M i

^ Comrade Peng Zhen's inscription ^ 5j for the title of the album.

5i Si

5i 5^ ^ Historical Picture Album of Li Dazhao i 5i Si 3^ —In commemoration of the centenary birthday of Li Dazhao, g a pioneer of the Chinese communist movement ^ 5j • Si 5i Si Si Si 5i This picture album, compiled by the Li Dazhao Picture Album Editorial Committee, will be available in November 1989. During compilation, the editorial committee received the ^ ^ concern and support of veteran comrades of the Central Advisory Commission and the National Study Society of Li Dazhao. 5,j 5i The album, 35 cm x 25 cm, 220 pages, is printed on imported copperplate paper in a 5i Si de luxe edition. Peng Zhen, former chairman of the Standing Committee of the National ^ People's Congress, inscribed the album's title. It contains 277 historic photos of Li, his ^ ^ manuscripts, calligraphy and articles of daily use, all of which were examined and approved by the Party Literature Research Centre of the Chinese Communist Party Central 5j 5i Committee and specialists in the research of Li Dazhao. Chairman Mao's appreciative 5i Si inscription to Li Dazhao is also in the album. SJ ^ The album is published and distributed by the Literature and Art Press of the People's ^ Liberation Army. Price: 68.50 yuan. For mail order, add 6 yuan per copy for packaging and 'F^ postal charges. 5j 5i • • Si Si Subscription Welcomed Si Si Si Si Si ^ Contact: Wang Xia, Huang Guorong ^ fy Address: 3A Diwu Lane, Xishiku, Beijing 100034, China Si Tel: 6736722 Si SJ Si Si Si SJ Si SJ Si SiSJSJSiSiSiSJSJSJSJSiSiSiSiSiSiSiSJSiSiSiSiSiSiSiSiSiSiSiSiSiSiSiSJSiSiSJSiSiSiSiSi

28 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 BUSINESS/TRADE

and non-trade foreign exchange China Announces Foreign earnings) are usually used to Debts for the First Time measure a country's debt repay• ment ability. The warning line is n order to clarify China's short-term made up the remain• 25 percent for the former and standing in international fin• ing 18 percent. Most of the mid- 100 percent for the latter. In re• I ancial markets, the State Ad• and long-term loans were spent cent years, China's debt repay• ministration of Exchange Con• on energy, transportation, chem• ment rate has hovered around 15 trol (SAEC), made public on Oc• icals, and such foreign exchange percent and its debt rate has been tober 7 for the first time the making sectors as textile and oth• less than 90 percent. Some de• country's outstanding foreign er light industries and tourism. partments have estimated that debts for the 1985-88 period (see In addition, the fact that China's China's debt repayment rate will table). foreign debts have been raised not exceed 20 percent even dur• from different currencies and ing the peak period of debt re• Unit: US$ billion through various forms helps payment in the 1990s. Year Year-end of which avoid risks in exchange rate fluc• • China has a strict management foreign Mid- and Short- tuation and difficulties in repay• system to control the scale and debts long-t£rm term ment. structure of its foreign debts. debts debts • Judging from the various in• The fact that the proportion of dicators for measuring a coun• China's short-term debts in the 1985 15.8 9.4 6.4 try's debt repayment ability, total was reduced from 41 per• 1986 21.5 16.7 4.8 China is comfortably within the cent in 1985 to 18 percent 1987 30.2 24.5 5.7 in 1988 indicates that China's 1988 40.0 32.7 7.3 safety line. Internationally, the debt repayment rate (principal macro-control over its foreign An administration official said and interest to be repaid in a debts is effective. that the announced debt statis• year as percentage of that year's In all, the official said, China tics were calculated according to total export and non-trade for• can afford to repay all its foreign internationally accepted meth• eign exchange earnings) and debt debts—principal and interests ods of measurements. They are rate (year-end debts as percen• —in due time. borrowings from international tage of that year's total export by Yao Jianguo financial institutes, foreign gov• ernments, banks and financial institutes, credit purchases, for• Pingdingshan Seeking Co-operation eign companies, as well as for• eign exchange bonds, finance aving begun with the coal 500,000v extra-high voltage trans• leasing, extended payment, and industry and now equipping formation and transmission net• other debts required to be repaid H itself with coal, electricity, work, hooked up with the Ge- with foreign exchange in com• textile, steel, chemical and light zhouba Hydroelectric Power Sta• pensatory trade. industries as well as building ma• tion on the Changjiang (Yangtze) terials and food industries, the River, constitutes the hub of the The official also said that in city of Pingdingshan in Henan electricity network in central light of the development of the Province is gradually opening its China. • economy and import and export, doors and seeking co-operation for China can afford to repay the The city's Wuyang Iron and further development. Steel Co. has China's first 75-ton US$40 billion in foreign debt As one of the most important arc furnace and 4.2-metre rolling and even more. Even though coal production bases in China, mill which is capable of producing during the peak period of debt Pingdingshan turns out 28.88 mil• steel plates in special width and repayment in the 1990s, China lion tons of coal a year, making thickness. Last February, the can afford to bear the burden, itself the biggest coal producer in company signed a contract with and there will be no difficulties, the country. With advantages of Austria's Voest Altine to import whatever. Reasons for this in• coal and water resources, the city a super-power 90-ton electric fur• clude: has been assuming an increasingly nace. By 1991, the company will • The rational structure of important position in the coun• be able to produce 500,000 tons China's foreign debts. By the end try's power industry. In 1988, the of steel and 400,000 tons of steel of 1988, China's mid- and long- total installed capacity reached plates'a year. term foreign debts accounted for 1.325 million kw, with an annual The city's textile industry start• 82 percent of the total while output of 8.175 billion kwh. The ed comparatively late. However,

BEIJING REVIEW, OCT. 30-NOV- 5, 1989 29 BUSINESS/TRADE

mines, of which re• ternational Inc. and the Beijing serves of 22 have been Jianzhong Machine-Building Fac• verified, such as coal, tory, started business in Beijing on steel, salt, bauxite, re• October 9. fractory clay, lime• The centre specializes in ser• stone, silica, graphite vicing all products marketed to and marble. All these China by BTU, including diffu- provide a solid mater• sene furnaces, CVD equipment ial fundation for the and sintered furnaces and provid• development of ener• ing technical consulting services gy, metallurgical, iron and signing contracts with the and steel, chemical mother company on behalf of and building materials clients. industries. In the past few years, BTU, a producer of electronic equipment, The city turned out has sold several million US dol• a total industrial lars worth of its products to and agricultural out• China. The centre is BTU's chan• put value of 7.9 billion nel to China's market. yuan last year. It has BTU's President Paul J. Van established economic Der Wansem noted this point at and technical links the opening ceremony, and said with the United States, that in order to co-operate with Japan and the Federal China in business, the coinpany is Republic of Germany. willing to build a bridge between To attract more the United States and China. The partners, the city is establishment of the centre, he The steel-rolling workshop of the Wuyang Iron and giving more attention added, will serve as the founda• Steel Co. In Pingdingshan City. XUE CHAO to urban construction tion of the bridge. the industry has now developed while continuing to boost its agri• At present, BTU is now dis• into a comprehensive system cap• cultural and industrial produc• cussing on further co-operation in able of producing synthetic fibre, tion. Public facilities have been or technology and production with cotton, flax, silk and wool for the are being built, and a highway its partner in the hope of carving full process of spinning, weaving network has been established out a bigger share of the Chinese and dyeing as well as clothes- throughout the city. Water supply market. making. Last year the textile in• and sewerage systems have been by Yao Jianguo dustry's output value accounted updated. In addition, the city has for 14.6 percent of the city's total imported a programme-controlled industrial output value. The Po- telephone system from France to 4 Foreign Trade lyamide Fibre Cord Factory, set expand its telecommunications Companies up in 1984 on Japanese technolo• network. gy and equipment, is the only en• As a new city, Pingdingshan Dissolved terprise of its kind in China. finds its development is handi• capped, to varying degrees, by he Ministry of Foreign Eco• The machinery industry has the shortage of talented personnel, T nomic Relations and Trade also grown steadily because of the (MOFERT) reported thaf as availability of rich energy. The technology and funds. To counter a result of the economic rectifica• city now has six big and medium- this, the city has put forward fa• tion and consolidation four for• sized machine-making factories. vourable policies to attract for• eign trade companies affiliated At the same time, it has also regis• eign investment. with the ministry had been dis• tered a steady growth in chemi• by Zhang Zhiping solved. They were the China Na• cals, building materials, light in• tional Gulf Trading Corp., tlje dustry and food processing. Its BTU Service Centre China National Africa Tradipg pottery, porcelain and wine have in Beijing Corp., the China National Latin entered the international market. America Trading Corp. and the Located between the mountain he BTU International Inc. China National Foreign Econo• area of south Henan Province T Technology Service Centre of mic Relations and Trading Man• and Huanghe River-Huaihe River Jianzhong China, jointly set agement Service Co. The first Plain, the city has 44 kinds of up by the United States BTU In• three's businesses will be incorpor-

30 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 BUSINESS/TRADE

ated into the China National Ov• mic Legislation, the State Admin• eight months of this year, the ex• erseas Trading Corp. and the last istration for Industry and Com• port value reached US$608,000 one's into the China National merce and the State Council Leg• and is expected to exceed US$1.1 Foreign Economic Relations and islative Affairs Bureau. At the million by the end of the year. Trading Consulting Service Co. symposium, world-famous experts The China Changly Enterprise A MOFERT official said that from the Federal Republic of Ger• Co. Ltd. is a joint venture co- the reason for the dissolution is many, Italy, Spain, Switzerland, sponsored by the Changzhou Re• structural duplication. Although Britain, France and the United lay Factory, Jiangsu Province, on these companies were dissolved, States will read their papers on the one hand and the Hong Kong he said, their agreements or con• the fight against unfair competi• Hollyland Co. Ltd. on the other. tracts signed with foreign coun• tion in foreign trade, services, and The venture has a total invest• tries will continue to be honored. technology. They will also take ment of 2.88 million yuan (about The MOFERT now has more the opportunity to conduct aca• US$780,000), with 70 percent than 30 subordinate companies. demic exchanges with their contributed by Changzhou and Since rectification and consolida• Chinese counterparts. Officials the remainder by Hong Kong. tion began more than a year ago, from India, Malaysia, Pakistan, The venture produces mainly some companies have been found the Philippines, South Korea, TV set antennas, connectors and having done businesses in a scope Thailand and Viet Nam are also socket power ties for TV sets' ra• bigger than was stipulated for invited to the symposium by the dios and washing machines. Sock• them, evaded taxes, conducted il• WIPO. et power ties of DTI, DT2, DT3 legal dealings in foreign curren• Since China began economic re• and DT4 were given the' UL en• cies or violated state laws and form and opening its doors to the dorsement by the United States in regulations. Some administrative outside world ten years ago, some September 1988. personnel have already resigned unhealthy trends in competition The company's General Mana• their jobs they simultaneously have become apparent along with ger Xu Huanlin said that since his held in companies. Some of these the country's economic develop• company began operations in Oc• companies will be dissolved or ment. This has disrupted the eco• tober 1985, it has earned altogeth• merged with other companies, ac• nomic order and damaged the in• er US$2,312 million in foreign ex• cording to Gu Yongjiang, aide to change. An annual breakdown is the MOFERT minister. terests of the country, its enter• prises and consumers. This as follows: In recent years, many foreign increasingly serious problem trade companies have been set up has attracted the government's at• Year Total Sales Foreign to meet the needs of opening to tention. Since China's first econo• Output Income Exchange Value Income the outside world. From the se• mic law against unfair competi• cond half of 1986 to the first half Unit: tion was formulated by the of 1988, more than 1,000 compan• US$ Wuhan municipal government, ies had been set up. The ongo• million Hubei Province, other provinces ing rectification and consolidation and cities, such as Jiangxi, Hei- will help improve China's reputa• 1984 0.4346 longjiang and Shanghai have de• tion in the foreign trade world 1985 2.023 2.028 0.055 vised similar controls. Relevant and promote the development of 1986 2.22 • 3.026 0.118 trade with other countries. • departments of the National Peo• 1987 5.023 9.1J8 0.529 ple's Congress and State Council 1988 13.419 16.224 1.002 are drafting national laws of sim• 1989 Symposium on ilar nature in light of China's (Jan.-Aug.)17.907 16.347 0.608 Combating Unfair domestic situation and other The company is now developing countries' experiences. vehicle connectors and telephone Competition by Yu Meishun plug connectors, and has applied for approval of fnternational saf• The International Symposium Products for ety standards. Meanwhile, the on Combating Unfair Compe• company is also negotiating on the tition is to be held from Nov• Foreign Markets establishment of the joint venture ember 3-6 in Beijing. The sym• Lijia Wire Co. Ltd. with Singa• posium is proposed by the World In recent years, Changly- pore's Epan. Currently, a delega• Intellectual Property Organiza• trademarked electronic connec• tion led by Xu is in the Federal tion (WIPO) and United Nations tors have enjoyed brisk sales in Republic of Germany, looking for Development Programme and Southeast Asia, Europe and the new clients and the possibility for jointly sponsored by the Chinese United States as well as Hong expanding export. Research Association for Econo• Kong and Taiwan. In the first by Li Ming

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 31 Beijing Hosts China's First Film Festival lOre than 300 film artists Established artists like Xie Jin founding of the People's Republ• from all parts of China and Xie Tieli, who have been in ic of China, China has set up and gathered in Beijing recent• the film business for more than developed an independent and ly for the country's first ever four decades, and new rising complete film industry system film festival. stars like Huang Jianzhong, Wu and produced many films which The week-long festival in late Ziniu and Liu Xiaoqing were have taken a large part of the September featured 40 films shot just a few of the prominent ar• domestic market," said Chen over the past two years—films tists attending the First China Haosu, vice-minister of radio, that represent the latest develop• Film Festival. film and television, during a ments in the industry in China. "In the 40 years since the speech to the festival. Artists.portray familiar faces of the past at the opening ceremony of the First "Every year China's film in• China Film Festival. dustry provides healthy enter• tainment for hundreds of mil• lions of Chinese," he added. "At the same time Chinese films, rich in national characteristics, have won more and more internation• al acclaim." Artists at the festival also dis• cussed the achievements and shortcomings of China's film in• dustry and further confirmed the policies of serving the people and of serving socialism, and "let a hundred flowers blossom and a hundred schools of thought con• tend." The 40 films included 20 fea• ture films and 20 documentary, scientific and animated films. The films varied in subject and style, and gave a comprehensive view of China's today and yester• day. Among them were histori• cal films about the revolutionary period, such as The Great Kun- lun Mountain and The Grand New China Founding Ceremc^. Films reflecting present day life including Rocl<. 'n' Roll Youth and Crazy Dancer of West China. Awards were also presented at the festival. The China Film Fes• tival Awards were given to such films as The Grand New China Founding Ceremony, The Great Kunlun Mountain, The Baise Uprising, a film depicting Deng Xiaoping's early revolutionary career in leading the Baise Upris• ing and Unforgettable Days, a

32 BEIJING REVIEW, OCT. 30-NOV. 5, 1989 : i A scene from the film "The Grand New China Founding Ceremony" shows Chairman Mao Zedong on Octobei 1, 1949 on the Tiananmen Rostrum. documentary film recording the went to the factories, country• cusing on today's life in China. 'happy time Chinese artists side, army camps and scientific In the future, films must focus shared with such great Chinese research units in suburban areas on the lives of the common peo-. leaders as Mao Zedong, Liu to listen to comments from the Shaoqi and Zhou Enlai. Veteran audience. Some of the artists said pie, the artists said. film directors Xie Jin, from the that although China's film in• Chen, who was also director of Shanghai Film Studio, Xie Tieli dustry has made remarkable the organizational committee of and Ling Zifeng, both from the achievements, there is a long way the film festival, announced that Beijing Film Studio, were also to go to meet the demand of the the China Film Festival will be given awards. common people. One of the main held every two years. During the festival, artists problems is the lack of films fo• by Zhang Wei Magazine Names 10 Top Film Stars hina's 10 top actors and ac• forming artists in films is not Zhao Dan is perhaps best re• tresses, as selected by only designed to acknowledge membered for his vivid portrayal Cthe magazine China Film the artists for their success after of a Communist Party member Weekly, were honored during the long years of hard work but also in the 1940s named Xu Yunfeng recent First China Film Festival. to commend them for contri• in the film Eternal Life in Rag• "The magazine said the film buting to China's film industry, ing Flames. stars are to be praised for their which is now flourishing. Always popular with the audi• outstanding work in film over The artists honoured included: ence, Zhao is remembered for his the past 40 years since the found• Zhao Dan, Sun Daolin, Yu Lan, distinctive character roles. In the ing of the People's Republic of Bai Yang, Wang Xingang, Cui 1930s, Zhao performed both on China in 1949. Wei, Xie Fang, Liu Xiaoqing, stage and in films. He starred in Selection of China's top 10 per• Pan Hong and Jiang Wen. Crossroad, Mission on Streets,

BEIJING REVIEW, OCT. 30-NOV. 5, 1989 33 CULTURE/SCIENCE

Crows and Sparrows and The ious beautiful and moving wom• acclaim. Xie is beautiful and se• Life of Wu Xun. en characters. In New Year's date, and is good at playing wom• After the founding of New Sacrifice, adapted from Lu en intellectuals with coinplicated China in 1949, Zhao played roles Xun's novel of the same name, life experiences. in Li Shizhen, a noted physician Bai played the wife of Xiang Lin, Liu Xiaoqing won the 1980 and pharmacologist in the Ming a tragic character, a role which "Hundred Flowers Awards" for Dynasty (1368-1644); Lin Zexu, demonstrated her talents as an best supporting actress and both a national hero in the Qing Dy• actress. the 1987 and 1988 "Hundred nasty (1644-1911), and Nie Er, a Wang Xingang, winner of Flowers Awards" for best lead• famous Chinese musician in the the 1982 "Hundred Flowers ing actress. Since she started her 1930s. Awards" for best leading actor, film career in 1973, Liu has had Zhao died in July 1980. But acted in more than 10 films in• roles in several films including the screen figures he presented cluding Silent Forest, Son of Xiao Hua, Look at This Family, will remain in this world forever. Herdsman and Electric Wave Hidden Network, Xu Mao and Sun Daolin graduated from Never Dying Away. He usually His Daughters, The Wilderness, • the philosophy department of plays handsome military men, Hibiscus Town, Spring Peach Yanjing Univerity and became a like Zhang Min, a Kuomingtang and A Dream of Red Mansions. bright star both on screen and officer in Sea Eagle; Yang Xiao- Liu can play various types of stage at the beginning of the dong, a man responsible for the women and her performances are 1940s. Chinese Communist Party's un• vivid and lively. After 1949, Sun starred in derground work in Battling In• Nicknamed "Star of Tragedy," Reconnaissance in Crossing side and Outside an Ancient Pan Hong mostly plays tragic Changjiang River, Electric Wave City, and Red Army commissar characters. She has acted in such Never Dying Away, Early Spring, Hong Changqing in The Red De• films as A Bitter Smile, At Mid• Li Siguang and An Unfinished tachment of Women. dle Age, Du ShiNiang, Well, The Game of Chess. Among all the characters that Bitter Cold Night and The Last Sun is particularly remem• Cut Wei played, the peasant hero Aristocrat. Pan won the 1989 bered for his portrayal in the Zhu Laozhong in The Red Flag "Hundred Flowers Awards" for Family of a Chinese intellectual was the most successful. Cui best leading actress. in the late 1920s who wanted to won the 1961 "Hundred Flowers Jiang Wen, at 26, is the young• seek the truth but was hopeless Awards" for best leading actor. est among the 10 film stars. in finding which way to go. Sun's He played Leading roles in Song He won the 1987 and 1989 performance was genuine. Jingshi, Soul of the Sea, New "Hundred Flowers Awards" for Yu Lan was born in Liaoning Story of an Old Soldier. Cui died best leading actor. After graduat• Province, northeast China. After in 1985. ing from the Central Drama In• 1949 she played leading roles in Xie Fang distinguished herself stitute in 1984, he played leading such films as Red Flag on Green in 1958 by playing Lin Daojing, roles in The Last Empress, Hi• Hills, Dragon Beard Ditch, Re• a revolutionary woman intellec• biscus Town, Red Sorghum, volutionary Family, Lin Fam• tual in the 1930s, in Song of Spring Peach and The Year of ily and Eternal Life in Raging Youth. Later, Xie played a vil• One's Own Animal. Jiang is par• Flames. Her portrayal of Sister lage teacher Tao Lan in the ticularly noted for his portrayal Jiang, a revolutionary heroine in 1920s in Early Spring and Zhu of a young rebellious peasant in Eternal Life in Raging Flames Chunhua, an opera singer strug• the 1940s in Red Sorghum. He was highly praised. Yu is not• gling in old China in Stage Sis• has the talent to portray a wide ed for her portrayals of work• ters, which also brought her high ranee of characters. n ing and revolutionary women. I Bai Yang, born in Beijing, ; started her film career at the age | of 11. She became famous before 1949 after she played Li Sufen, a gentle and faithful but trag• ic woman worker in The River Flows East. Later Bai acted in For Peace, New Year's Sacrifice, Spring Is in the World and Winter ; Plum Blossom, presenting var- I by Wang Yuiiang

34 BEUrNG REVIEW, OCT. 30-NOV. 5, 1989 ART PAQE

Sculptures by Sun Jiyuan

Sun Jiyuan, born in Xian, Shaanxi Province, in 1932, is today the director of the Maiji Mountain Grotto Art Research Institute in Tianshui City, Gansu Province. He has long been engaged in traditional Chinese sculpture research, and he likes to use traditional meth• ods in his own work. Most of it expresses the lifestyle of northwest China in all its richness and simplicity.

Woman Playing the Pipa (a plucked string instrument with a fretted fingerboard).

Woman Road Maintenance Worker. A Little Girl Welcomes Winter's Snow. The Sino-Foreign Joint Venture Tianquan Refrigerator Co. Ltd., established in 1984, uses the technology and equipment import• ed from Italy's Siltal Company for the man• ufacture of refrigerators. It is a factory de• signated by the state for this purpose and has an annual productive capacity of 200,000 units. The four-star BCD-170 Tianquan Refri•

gerator won a quality product title from the Ministry of Light Industry and Fujian Province in 1988. Combining refined and ele• gant styles from Europe and Asia, the Tianquan refrigera• tor features large refrigerat• ing space, quick freezing, good insulation, low power consumption and easy maintenance. It has been well received and is popular with our customers.

Address: Quanxiu Road, Quanzhou, Fujian Province Tel: 26718, 23051 3E m TIANDUAN Fax: 23881