Sharp Contrast—the old and the new. Photo by Wang Wenyang HIGHLIGHTS OF THE WEEK BeijingR-ir

VOL. 34, NO. 10 MABCH11-17,1991

Four Principles on New International Order CONTENTS

• Chinese Foreign Minister Qian Qichen recently put NOTES FROM THE EDITORS 4 forward four principles on the establishment of a new China Sees an Upturn in Its Economy international order. These principles are: seek common EVENTS/TRENDS S9 ground while putting aside differences; mutual respect; Palcistani PM's 'Homecoming' to non-interference in the internal affairs of various na• Beijing President Hails Kuwait;_s Liberation tions; equality and mutual benefit (p. 10). Blueprint Designed for Economic Reform Sino-Soviet Relations Promoted Economic and Social Development In 1990 Lending a Hand to Rebuilding Kuwait • A recent report issued by the Statistical Bureau of the China to Improve TOEFL People's Republic of China points out the major econo• Supervision mic achievements won by China in 1990. Political and News in Brief social stability brought about a 5 percent increase in INTERNATIONAL Current International Situation and China's GNP and a 4.8 percent growth in national China's Relations With Western income over 1989 respectively (p. I-VIII). Europe 10 Pakistan Increases Oil Production 13 Changes in Soviet-Japan Relations 14 China's Administrative Structural Reform Western Pacific: A Dynamic Region 15 CHINA • Remarkable achievements have been scored in China's Administrative Structural Reform 18 administrative structural reform. While carrying out Economic Restructuring in the 1990s 20 reform of the organizational structure of the State Attuning Taxation to the Investment Council, close attention has also been paid to reform of Climate 22 local organizational structures at selected locations na• Family Planning: the Way Out 26 tionwide (p. 18). People: Deputy Mayor Has a French Mother 31 Women Today: A Force to Be China's Stable Economic Growth Reckoned With 33 DOCUMENTS Statistical Communique of the State • A recent report provides an accurate picture of Chi• Statistical bureau of the People's na's economy in 1990. While reaffirming the effective• Republic of China on National ness of the government's economic measures, the report Economic and Social Development also lists a number of existing problems that should be inl990(Februa^22,1991) (I-VIII) solved to ensure sustained and steady economic develop• FROM THE CHINESE PRESS 34 35 BUSINESS/TRADE 36 38 ment (p. 4). TOURISM 39 CULTURE/SCIENCE 4042 Deputy Woman Mayor He Lull COVER: Outstanding Women Workers. • Of mixed race and a non-Communist, He Lull, deputy Tqp left: Beijing Deputy Mayor He mayor of Beijing, has won the trust of the public with Lull (first left) chatting with local her down-to-earth work style and remarkable achieve• residents while taking part in vol• ments (p. 31). untary labour.

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China Sees an Upturn in Its Economy

by Yao Jianguo

n early 1990, when China's economy saw a down• Statistics indicate that China's total export value in ward trend resulting from the implementation 1990 stood at US$62.06 billion, an 18.1 percent I of a retrenchment policy, some people in increase, and import at US$53.35 billion. After de• Chinese economic circles were worried about a pos• ducting the value of import and export goods not sible economic slide. There were also speculations paid in foreign exchange, the value of export was abroad that China's economy was "heading for a US$13.1 billion greater than that of import, putting recession" and was in "an inextricable state." an end to the consecutive years of trade deficits However, the Statistics Communique on the 1990 existing since 1984. By the end of September 1990, National Economic and Social Development (see China had an excess of US$25.8 billion in foreign supplement in the Document column of this issue) exchange reserves, including an excess of US$10 published by the State Statistical Bureau on Fe• billion of spot exchange reserves, thereby streng• bruary 22 clearly shows China's actual economic thening China's foreign debt paying ability and in• situation in the past year: China's economy, after creasing foreign businessmen's investing confidence. overcoming the difficulties caused by inflation, has In 1990, the value of contracts China signed for the lifted itself out of a slump and embarked on a course use of foreign funds ran to US$12.3 billion, a 7.4 of stable, moderate development. percent increase over 1989. • Between late 1989 and early 1990, the difficul• • Last year, China continued its economic im• ties that plagued China, such as a negative industrial provement and rectification and adopted measures growth, a sluggish market and defaults between en• to tighten up finance and credit. As a result, total terprises were being gradually overcome, and indus• supply and demand were balanced, prices in markets trial production began to pick up. Compared with dropped dramatically, the prices of staple foods be• 1989, industrial growth in 1990 was like this: It was came stable or declined, and the prices of decon• basically equal in the first quarter, increased by 4.1 trolled industrial goods fell automatically. In 1990, percent in the second quarter, by 5 percent in the the nation's total retail prices rose only 2.1 percent third and by 14.2 percent in the fourth. The nation's from 1989, far lower than the respective 18.5 percent total industrial output value reached 2,385.1 billion and 17.8 percent in the previous two years. yuan in 1990, a 7.6 percent increase over 1989, and • In 1990, the income of urban people per capita 6 percent higher than the planned growth rate; gross was 1,387 yuan, and when price hike was factored national product (GNP) hit 1,740 billion yuan, a 5 in, the actual growth was 8.6 percent; the net income percent rise over 1989; national income was 1,430 of farmers per capita was 630 yuan, an actual growth billion yuan, 4.8 percent greater. of 1.8 percent. The situation put an end to the fall • An all-round increase in agricultural produc• in real incomes of urban and rural residents in 1989. tion marked a significant achievement in the 1990 Facts show that successfully implementing a tight economic work. Total agricultural output value monetary policy, reducing social demand and curb• came to 738.2 billion yuan, a 6.9 percent increase ing inflation are necessary for stable economic de• over 1989, topping the planned target by 4 percent. velopment. However, the present foundation for an Total grain output reached 435 million tons, or 27.45 improved economy is rather weak. Many enterprises million tons more than that of 1989, with both total are faced with such problems as an overstock of output and per-hectare output hitting a record high; finished products, increased losses, decreased econo• the output of oil crops was 16.15 million tons, or 3.2 mic benefits, increased financial difficulties, more million tons more than that of 1989; sugar-bearing recent use of credit—all contributing to increasing crops 71.8 million tons, 13.76 million tons greater. the pressure of inflation. Solutions to these problems Additionally, cotton, beet, silkworm cocoon, pork, require deepening reform of the economic structure, beef and mutton all reported a considerable increase further improving the established macro-economic in output. control system, and a greater effort to optimize the The all-round increased agricultural production industrial structure and raise economic efficiency. has laid a foundation for the development of China's Only by so doing is it possible to bring about a national economy this year. sustained, stable and harmonious development of • The balance of payments has further improved. China's national economy. •

4 REVIEW, MARCH 11-17,1991 EVENTS/TRENDS

Pakistani PM's 'Homecoming' to Beijing

akistani Prime Minister M. Nawaz Sharifs recent visit P to Beijing reminded those who are fed up with the outpour• ing of bloody news from the Per• sian Gulf that there are still fine examples of state-to-state re• lations in this world. Sharif described his February 26-March 1 China tour as "com• ing back home," saying that the friendly bilateral relations repre• sent a model for state-to-state Pakistani Prime Minister Sliarif (right) lid his Beijing trip is like homecoming. ties. LIU JIANSHENG Their different ideologies, dis• May 21 of this year. Both sides welcome the cease• parate political systems and For many years the two coun• fire in that region. diverse cultural backgrounds tries have maintained consistent On the post-war arrangements notwithstanding, China and Pak• high-level contact. The first ex• for the Gulf, Sharif said Pakis• istan, two major Asian countries change of visits between cabinet tan holds that Iraq's boundaries with large populations, have leaders took place in 1956, when should be respected, that all for• something common to be proud Pakistani Prime Minister H. S. eign troops should withdraw of: their constant friendship and Suhrawardy came to China in from the Gulf region, and that co-operation. They regard such October and Chinese Premier the regional secrurity should be a relationship as an all-weather Zhou Enlai reciprocated with a guaranteed by Gulf and Islamic one, which, as Sharif put it in visit to Karachi in December. countries. his inaugural address as the new In recent years the exchange of Li told the press that he found prime minister last November, visits by heads of state between both China and Pakistan share "has stood the test of every chal• the two countries has become an many identical or similar views lenge. In fact, our friendship has annual affair, which was des• on the Gulf crisis. been strengthened even more af• cribed by some Chinese as "call• by Staff Reporter Li Haibo ter every crisis." ing on relatives." When meeting Chinese Premier Li Peng is with Chinese President Yang no less sanguine of the Sino- Shangkun on February 27, Shar• Pakistan ties, which he believes if, on behalf of Pakistani Presi• are based on the Five Principles dent Ghulam Ishaq Khan, once President Hails of Peaceful Co-Existence. "We again invited Yang to visit his Kuwait's Liberation hold," he said, "that the chang• country. Yang accepted the invi• ing of government in any coun• tation, and the visit, according to try is an internal affairs. We a Pakistani official, is expected hinese President Yang believe the friendship and co• to take place this year. Shangkun sent on Fe• operation between China and The Gulf crisis was the focus C bruary 28 a message to Ku• Pakistan will grow on." of talks between Sharif and his waiti Emir Jaber Al Ahmed Al Sharif described the Pakistan- Chinese counterpart Li Peng, as Sahan, congratulating him on China friendship as a pillar of well as Yang and Party leader the restoration of Kuwait's inde• his country's foreign policy. Pak• Jiang Zemin. pendence, sovereignty and ter• istan treasures its traditional ties Jiang said the "cold war" ritorial integrity following the with China, he said, adding that seemed to have ended but in fact, withdrawal of Iraqi troops. the two countries will mark the the world was far from being In his message, Yang said: 40th anniversary of the establish• tranquil and the Gulf war was "May the Kuwaiti people ment of diplomatic relations on just an indication of this. achieve continuous success in

BEIJING REVIEW, MARCH 11-17, IBM 5 I EVENTS/TRENDS healing the wounds of war and market regulations. country's economic reforms. The rebuilding their homeland and To that end, Chen put forward past 12 years saw the fastest eco• may the friendship and relations five main tasks: nomic development in China's of co-operation between China — To build a new ownership history, the participants agreed, and Kuwait see continued conso• structure with public ownership and the nation has greatly lidation and development." as the mainstay, supplemented changed its old rigid economic A Chinese Foreign Ministry by the appropriate development system. spokesman, at the ministry's of other sectors of the economy. Statistics show that during this weekly news briefing the same — To build an enterprise sys• period, China's GNP increased day, welcomed the ceasefire in tem that will suit the develop• at an annual rate of 8.8 percent, the Gulf announced by the Unit• ment of massive social prod• higher than the average rate of ed States. uction. Enterprises should be 6.1 percent for the 24 years be• Ever since the outbreak of the responsible for their profits and tween 1953 and 1977. The Gulf war, the spokesman said, losses, self-development and self- achievements manifested them• the Chinese government has all restriction. selves mainly in the following as• along called for its early end to — To build a socialist market pects: give peace a chance. system that allows open, fair — While the public-owned He said that the Chinese gov• competition. The state will only economy remained to be the ernment has always maintained control the prices of those com• leading sector, efforts were made that a practical formula for a modities and services that are vi• to develop the urban collective political settlement should be tal to the national economy and and rural industries, as well as sought within the framework of the people's lives, leaving others the individual and private sec• the relevant United Nations re• to market regulation under the tors. These efforts helped revital• solutions in order to ensure a guidance of state plan. ize the once monotonous econo• lasting peace in the region. — To establish macroeconom- my which fell out of pace with "The UN Security Council ic regulating and control systems the country's productive forces. should continue to play its posi• at the central and provincial lev• — The introduction of the rur• tive role in this regard," he said. els. Direct and indirect regula• al contract responsibility system, tions and control will be com• which links output to payments, bined. and the expansion of the — To establish a social insur• decision-making power of urban ance system and an income dis• enterprises. tribution system predicated on — Changes in the price control Blueprint Designed the principle of "to each accord• system enabled market forces For Economic Reform ing to his work" and supplement• and the law of value to play a ed by other distribution methods. higher role. The state has nar• Referring to future develop• rowed the scope and improved hina will stick to its econo• ment of reform, the minister said the means of overall control of mic reform and open pol• China will gradually narrow the the economy. Cicy, combine reform with scope of the compulsory plan• — Reforms in finance, bank• development and seek develop• ning and expand the roles of ing, planning and investment ment through reform — this was guidance planning and market have stimulated regional initia• the message of a national confer• regulation. tive, and have facilitated the de• ence on economic restructuring. China will also establish an ef• velopment of regional economies The meeting, attended by more fective system to balance aggre• and other undertakings. than 200 high-ranking officials gate demand and supply, revamp — Various income distribu• from various regions and depart• the planning system, bolster the tion methods were adopted while ments, began on February 25. socialist market system, reform upholding the socialist principle Chen Jinhua, minister of the the price mechanism, and en• of "to each according to his State Commission for Restruc• courage the creation of a compe• work." While people were en• turing the Economy, said the ge• titive management mechanism. couraged to get rich first by the neral goal of economic reform In 1991, Chen said, the econo• sweat of their brow, the princi• for the 1990s is to build a mic structural reform will be fo• ple of common prosperity was new socialist planned commod• cused on invigorating large and upheld, fueling the enthusiasm ity economy and an operational medium-sized state enterprises. and competitive spirit of the peo• economic mechanism that will The five-day meeting also re• ple. combine planned economy with viewed the achievements of the — Foreign trade, the utiliza-

#PJJtNG REVIEW, MARCH 11-17, 1991 EVENTS/TRENDS tion of foreign investment, and when meeting with visiting De• and opening to the outside world foreign economic and technical puty General Secretary of the as well as to the Fo'ur Cardinal co-operation developed rapidly, Communist Party of Soviet Principles concerning socialism thus stimulating the transition Union V.A. Ivashko in Beijing and the Party's leadership, Jiang from the traditional semi-closed on February 27. stated. economy to an export-oriented For the sake of friendship with He stressed that without pol• economy. the Soviet people, Jiang said, itical stability, an economy can Despite these achievements, China would offer the Soviet not develop to its fullest poten• the representatives were soberly Union some commodity loans. tial, adding that economic devel• aware of the arduous tasks that Jiang declared that he is satis• opment can in turn promote pol• lay ahead, including eliminating fied with the development of re• itical stability. the drawbacks of the traditional lations between the two countries economic system and rationaliz• and the two parties since the nor• Jiang also expressed his belief ing the economic operating me• malization of their relations. that with rich resources, adv• chanisms so as to overhaul the He emphasized that it is in the anced science and technology, traditional economic system. • interests of the two peoples to and a strong industrial basis, the further develop these relations, Soviet people can overome their which he believed will reach a temporary difficulties. new stage thanks to efforts of Ivashko briefed Jiang on the both sides. Soviet Union's situation. He said Sino-Soviet On China's domestic situation, that the Soviet Union's reform, Relations Promoted Jiang held that China's experi• which began in 1985, is an objec• ence in its revolution and con• tive demand. He stated that al• struction is to combine the univ• though the Soviet Union has r • ihe Communist Party of ersal principles of Marxism- achieved great results in its so• I China (CPC) attaches Leninism with China's concrete cialist construction, it has not great importance to Sino- conditions. managed everything well. Soviet party and state relations, He said that China's idea of He declared that the decades- and the Chinese people are close• reform is to improve and devel• long history of Soviet socialist ly following developments in the op the socialist system, through construction is one of the reasons Soviet Union. which the superiority of social• why the Soviet people are still This was the statement by ism can be further brought into Jiang Zemin, general secretary play. taking the road of socialism. of the CPC Central Committee, China adheres both to reform Ivashko expressed thanks to China for its commodity loans, and said that the potential for the further development of the bilateral relations in various fields is great. Jiang extended his gratitude to Mikhail Gorbachev for his invi• tation to visit the Soviet Union and said that he will be happy to meet Gorbachev again. He said meetings between leaders are helpful for promoting mutual understanding and bilateral rela• tions. Ivashko visited the Chinese capital February 26-March 2. He is the highest Soviet Communist Party official to have come to China since Gorbachev's visit in May 1989. •

BEIJING REVIEW, MARCH EVENTS/TRENDS

Lending a Hand to stracted projects in Kuwait to• ided a great service to those who talled more than US$530 million want to study abroad. He af• Rebuilding Kuwait in business volume. There were, firmed that China's agreements at the peak, as many as 20,000 with the US Education Testing Chinese workers in the emirate Service, which administers the ow that the Gulf war is and almost all the residential TOEFL and other tests, will re• over, China has get about projects were undertaken by main valid for a long time to N joining in the massive re• Chinese companies, according to come. construction of war-damaged the director. With 45 TOEFL testing Kuwait. Chinese companies in Kuwait centres located mainly in col• According to officials from the also built hospitals, power sta• leges and universities, manage• Ministry of Foreign Economic tions, oil refineries and coastal ment of the tests is generally Relations and Trade (MO- resorts. strict and sound, the official said. FERT), China is seeking con• With high quality and favour• All test supervisors receive spe• tracts for the rebuilding of an able prices, China has a fine re• cial training, and testees are re• entire area or other large projects putation there, Chen said. quired to provide identification like airports, factories, water and He also expressed China's will• cards upon application and in sewage facilities, highways and ingness to send experts to the the examination rooms, effec• hospitals. Gulf to help cleaning up the oil tively curbing fraudulent prac• Chen Yongcai, director of the spill and the polluted water. tices. Foreign Economic Co-operation As for Iraq, China is taking Testing facilities have also Department under the MO- a "prudent attitude" and the been greatly improved in recent FERT, said that China is also Chinese companies would con• years. Each examination room hoping to co-contract construc• tract Iraqi construction projects is furnished with earphone sys• tion projects with such countries under the condition of a guaran• tems, and many testing centres as the United States and Britain. teed payment, the director said. are in modern language laborato• "We plan to supply workers, ries, the official said. technicians and engineers to help The country's young people rebuild Kuwait," Chen said. have shown increasing interest in "The return of China's con• studying overseas since the latter struction companies to Kuwait is half of the 1980s. not far off," he added. China to Improve Today two-thirds of the coun• So far, Kuwait has signed con• TOEFL Supervision try's TOEFL examinees score tracts with 100 foreign compan• above 500, regarded as a reason• ies to reconstruct the country. Its able mark for people learning overseas funds will be used first hina tries to improve the English as a foreign language. to help people in repairing and administration of the So far fraudulent practices, rebuilding residences damaged TOEFL tests taken by 20,- such as the employment of surro• in the war, according to Kuwaiti 000 to 30,000 citizens yearly. gates, are rare in the tests, the resources. According to a top official official said. • Chen believes China stands a from the China International good chance of getting a large Examinations Co-ordination piece of the business, as it took a Bureau (CIECB), the state will firm stand against the Iraqi inva• draft a set of stricter regulations sion, and it enjoys sound econo• on the Test of English as a News in Brief mic relations with Kuwait. Ku• Foreign Language, known as wait has already invited China to TOEFL, and the Graduate Re• play an active role in its recon• cord Examination, or GRE. Ministers Sacked, struction. The TOEFL and GRE were Emblem Law Adopted Chinese overseas construction first introduced to China in The State Council's decision to firms are either being invited by 1981, and were followed by the sack two government ministers their Western counterparts to co• Graduate Management Admis• was approved by the National operate in Kuwait or actively sion Test (GMAT) and the Test People's Congress (NPC) Stand• getting in touch with Kuwaiti of Spoken English (TSE). ing Committee at the conclusion companies. The CIECB official said on Fe• of a recent session on March 2. Before the Iraqi invasion of bruary 26 that the introduction The dismissals of Qian Kuwait last August, China's con- of these tests in China has prov• Yongchang as minister of com-

8 ,^JIf4G REVIEW, MARCH 11-17, 1991 EVENTS/TRENDS munications, and of Lin Hanx- of • some countries toward nor• cooperation with China. iong as minister of construction malizing relations with China, Fresco said that besides coop• were approved at the meeting by according to the Minister. For erating with China in power in• an overwhelming majority. example: dustry, G.E. is also highly in• Qian was sacked for charges of — In October 1990, the Euro• terested in China's airplane and abusing power for personal gains pean Community foreign minis• medical equipment industry. while Lin was accused of violat• ters decided to ease sanctions on He stated that G.E. will con• ing state discipline. China. This permitted the re• tinue to transfer its technical in• The session also removed Xu sumption of ordinary ministerial formation and invest in China Jiatun, former head of Xinhua visits, as well as bilateral aid to ensure long-term and steady News Agency's Hong Kong and concessional financing for cooperation. branch, from his post as Stand• China; Li said that the development ing Committee member of the — Japan announced the re• of energy and transportation the Seventh National People's sumption of its third loan to plays a very important role in Congress, following a decision by China in July 1990 and has re• China's Eighth Five-Year Plan the standing committee of the sumed ministerial visits; and (1991-1995) and the 10-Year Guangdong provincial people's — In December 1990, the Development Programme congress. Chinese Foreign Minister paid (1991-2000). He added that the The removal was made be• an official visit to the United cause of Xu's absence without States, meeting president George prospects for G.E.'s cooperation leave in the United States since Bush. with China in these areas are last April 30. Evans said in a statement that very broad. The decision said that Xu, as a the restrictions to be lifted are More Attention senior Party official, has stuck to those applying to: On Agriculture his wrong course by mixing him• — The consideration of new Vice-Premier Tian Jiyun self with anti-Communist ele• proposals for technical coopera• ments abroad. He has deserted tion and agricultural research ac• called on all areas to sum up past the Party and the people by his tivities with China; experiences in agricultural devel• actions and has created a very — The consideration of new opment and strive for good har• bad impression both at home and applications for concessional fi• vests this year. abroad. He has thus completely nancing under the organizations At a national meeting which forfeited his Party membership. concerned; and opened in Beijing on February Also adopted at the meeting — Political p^rty visits, in• 24, Tian said that the Seventh was the draft law on the national cluding exchanges of parliamen• Plenary Session of the 13th Na• emblem of the People's Republic tary delegations. tional Congress of the Commun• ist Party of China, which was of China. The nation's first law American Industrial held towards the end of last year on this subject, it will take effect Co-operation Welcomed on October 1. and put forward suggestions con• China welcomes various forms cerning the 10-year programme Australia Removes of cooperation from American Restrictions for national economic and social industrial circles, said Chinese development and the Eighth Australia's restrictions on eco• Premier Li Peng on February 25. Five-Year Plan (1991-1995), nomic and political relations In a meeting with Paolo Fres• urged the nation to strive for a with China, applied in July 1989, co, senior vice-president of 450 million-ton annual grain out• will be removed, the Australian America's General Electric, Inc., government announced on Fe• Li said that he hopes American put. bruary 26. industrial circles will, together Tian said that the experience Foreign Minister Gareth with their Chinese counterparts, of the past few years of the Evans said that the Australian overcome difficulties and re• household-based responsibility government recognizes the mu• move obstacles to Sino-American system has taught valuable les• tual benefits to be gained over economic, trade and technology sons in the construction of irriga• the longer term from the furth• co-operation and contribute to tion systems, improvement of er development of China's econo• the improvement and expansion social services and efficient cir• mic relations with Australia and of Sino-American relations. culation of agricultural products. other countries in the region. Li expressed his appreciation The meeting will sum up these Australia has also taken into of G.E.'s positive attitude to• experiences to further agricultur• account changes in the attitude wards developing economic al development. •

BEIJING REVIEW, MARCH ll-17;-iWl 9 INTERNATIONAL

Current international Situation and Cliina's Relations Witli Western Europe by Qian Qichen

ver the past year and more, Now, many statesmen are talking Such a new order must include the international situation about the establishment of a new the new international economic O has undergone tremendous international order. But what relations. As the world economy is changes which attract attention kind of new international order being internationalized, the econ• everywhere. The old world pat• should be established? omies of countries are inseparably tern has disintegrated while a new Speaking of the new inter• connected with one another. At one is yet to take shape. The world national order, it must, in our present, the economic relationship is now at a transitional period in view, be different from the pre• between the developed and devel• which turbulences and uncertain• vious old order based on hege- oping countries presents a serious• ties reign as the old structure is monism and power politics. It ly unbalanced picture, with the being replaced by the new. Ger• means a brand-new international rich getting richer and the poor many is one, the two major mili• relationship. poorer. Many developing coun• tary blocs have reached important Such a new order requires tries are finding themselves in agreements on conventional disar• equality of all countries, big or growing economic difficulties, mament, military confrontation small, strong or weak, rich or burdened with enormous debts has decreased and US-Soviet rela• poor, and affirms their right to and facing worsening terms of tions have eased. All these un• participate in the settlement of trade, reverse flow of funds and doubtedly are welcome develop• world affairs through consul• other grave problems. If the econ• ments. However, the stark reali• tation. It rejects such practices as omy of the third world countries ties tell us that the present-day the big bullying the small, the fails to develop for long, that world is far from being trouble- strong lording it over the weak would not be good for the econo• free and its people still face many and the rich oppressing the poor, mic development of the developed grave challenges. East-West de• and the monopoly of international countries, and it would be diffi• tente, so familiar to us, has not affairs by one or two big powers cult to truly ensure world peace brought about warmer North- or several big powers. and stability. We maintain that South relations, and the economic Such a new order must recog• the unjust and inequitable inter• gap between the developed and nize the right of every country to national economic order must be developing countries is ever wi• choose its social system, ideology, changed and be replaced by a dening. US-Soviet detente has economic model and course of de• new international economic order made many political, economic velopment in light of its own na• based on equality and mutual be• and ethnic contradictions, which tional conditions and oppose in• nefit. Moreover, the developed for years were hidden from public terference in the internal affairs countries should contribute to the eyes, stand out in sharper relief. of other countries or imposition of improvement of the internation• Tensions have clearly appeared in a particular development model al economic environment and, in some regions, and the fact that the on them. particular, to the solution of the Gulf crisis has developed into the Such a new order requires mu• debt problem of the developing Gulf war is a case in point. tual respect for each other's sover• countries. The people of all countries long eignty and territorial integrity by To sum up, the new interna• for a better future and hope that all countries, upholds the prin• tional order to be established em• a new international political and ciple that international disputes braces both the political and eco• economic order which is just and should be resolved in a reasonble nomic order. Its guiding princi• reasonable will be established. manner through peaceful negotia• ples should be the five principles This is a speech made by Chinese tions and opposes the use or threat of mutual respect for sovereignty Foreign Minister Qian Qichen at the of force or armed invasion and and territorial integrity, mutual Centre of Studies of Foreign Policy of the attempt to settle international non-aggression, non-interference Spain on February 26, 1991. disputes by means of war. in each other's internal affairs.

10 BpjING REVIEW, MARCH 11-17,1991 INTERNATIONAL equality and mutual benefit, and our opposition to the Iraqi inva• policies in this regard. peaceful coexistence. These prin• sion and annexation of Kuwait China has always put great ciples are also in keeping with the and called on Iraq to withdraw its weight on developing its relations purposes and principles enshrined troops from Kuwait immediately with the West European countries in the United Nations Charter. and unconditionally so as to res• and dedicated itself to this end. History and realities show that no tore the independence, sovereign• After the founding of the People's matter how different states may ty, territorial integrity and the Repubhc of China, our relations be in social system and ideology legitimate government of Kuwait. with these countries have moved and how many twists and turns At the same time, we have stood gradually from mutual isolation they may have gone through in for a peaceful settlement of the and estrangement towards normal their relations, they will see their Gulf crisis within the framework development. In the 1980s, in par• relations develop smoothly so long of the relevant UN resolutions. To ticular, state-to-state relations be• as both sides strictly abide by the this end, we have exerted all our tween China and West European above-mentioned Five Principles efforts. We have done a great deal countries expanded quite rapidly. of Peaceful Coexistence. A breach of useful work within the United Mutually beneficial bilateral co• of these principles would cause Nations. In addition, we have re• operation in the political, econo• frictions and conflicts among sorted to bilateral channels to per• mic, cultural, scientific and tech• states, leading to turbulences and suade the parties concerned. To nological fields reached a new chaos. Having stood the test of our deep regret, the possibility for high. That was the result of the time for several decades since a peaceful settlement of the Gulf long and concerted efforts of the they were initiated in the 1950s, crisis, which once emerged, has both sides and deserves to be cher• the five principles have demon• not become reality. At present, we ished. Over the past year and strated their strong vitality as remain hopeful that the parties more, some temporary difficulties they are in the fundamental in• concerned will demonstrate a will• cropped up in the relations be• terests of the people of all coun• ingness to resolve the conflict tween China and Western Europe. tries and conducive to world peacefully and bring the Gulf war It is gratifying, however, that peace and development. We consi• to an early conclusion, thus real• thanks to the common endeavour, der it feasible to shape the new izing peace within the framework marked improvement has been international order on the basis of of the relevant resolutions of the achieved in our relations. Last Oc• these principles. UN Security Council. tober, the EC foreign ministers' meeting made a wise decision to As a member of the intenation- Without a just and reasonable restore relations with China, and al community, China is ready to solution of the Palestine question, some West European countries work unremittingly with all other there can be no lasting peace and have begun to take positive steps countries for the establishment of tranquility in the Middle East re• to improve their relations with a just and reasonable internation• gion. We hope that following the China. We welcome these posi• al political and economic order. settlement of the Gulf crisis, the tive developments. It is especially As the old world pattern is giv• international community will worth mentioning that it was the ing way to a new one, China will promptly start working for a solu• foreign minister of Spain that all the more firmly pursue its in• tion to the Middle East question took the lead in visiting China, dependent foreign policy of peace. and especially the Palestine ques• thus making a valuable contribu• It is ready to establish and de• tion in compliance with the rele• tion to the development of Sino- velop friendly relations and co- vant UN resolutions. China seeks Spanish relations and to the im• operaion with all other countries no selfish interests in the Gulf provement of Western Europe's on the basis of the Five Princi• region. Its only concern is peace relations with China. Now, China ples of Peaceful Coexistence and and stability there. In our view, and Western Europe see a gradual to conduct various forms of eco• the question of security of a re• restoration of their political ex• nomic and technological co• gion should be mainly addressed changes and their co-operation operation and trade exchanges by the countries in that region. in trade and economic relations, with them on the basis of equality Foreign troops must withdraw science and technology as well as and mutual benefit. from the Gulf. We will, together culture and education. This is be• Now the attention of the world with other countries, keep up our neficial to both sides. Although public opinion is tightly held by unremitting efforts for a peace• there are still some problems that developments of the situation in ful settlement of the Middle East need to be resolved through our the Gulf. The Chinese govern• question. common efforts, relations be• ment has taken a responsible and I wish to take this opportunity tween China and Western Europe principled position vis-a-vis the to focus on China's relations with are on the whole moving in a Gulf crisis since its very begin• Western Europe and to brief you sound direction. ning. We have explicitly expressed on China's views, positions, and

BEIJING REVIEW, WOiCH 11-17,1991 11 INTERNATIONAL

Here, I wish to reaffirm once decisians and the courses of their stability. This is the only way to again that China is ready to de• economic development are like• ensure a smooth development of velop friendly relations and co• wise different. The two sides may our reform. China needs stabili• operation with Western Europe have different views, but that ty, and the world needs a stable on a long-term and stable basis. should serve to underscore the China. We have now formulated We believe that as China and need for greater exchange and bet• the Eighth Five-Year Plan for the Western Europe have no conflict ter understanding, instead of giv• years 1991-1995 and the Ten-Year of fundamental interests between ing reason for interference in the Development Programme for the them, and each side has an impor• internal affairs of the other side. 1990s, which is aimed at quadru• tant status in international affairs, 4. Equality and mutual benefit. pling the GNP of 1980 by the the proper handling of our rela• Western Europe comprises many end of this century. This ambi• tions not only is in the funda• economically developed countries. tious economic development plan mental interests of our respective It is very advanced in science and of China's means greater oppor• countries, but also helps bring technology and its experience in tunities for the further streng• about a new international order economic management is most thening of China's economic ex• and secure world peace and stabil• valuable for other countries. ity. Obviously, the realization of China is the largest developing changes and co-operation with such an objective calls for unre• country with rich human and na• other countries, including West lenting efforts from both sides, tural resources and a market that European countries. Our friends and their mutual adherence to has great potentials. Our two sides from Western Europe are wel• some fundamental principles. can complement each other and come to invest, open factories and These principles may be summar• co-operate on an equal footing to run enterprises in China, so as to ized as follows: mutual benefit. bring the economic and technol• 1. Seek common grounds while We are confident that as long as ogical co-operation between our putting aside differences. China China and Western Europe ob• two sides to an even higher level. and West European countries serve these principles, their rela• In the past 18 years since the have different social systems, his• tions will move forward along the establishment of diplomatic rela• torical traditions, cultural back• right track. tions, China and Spain have grounds and ideologies. Their At present, China enjoys politi• forged a rather stable relationship views on some issues may also cal and social stability at home of amity and co-operation. Lead• be quite different. However, the and sustained and co-ordinated ers of our two countries have common grounds shared by China economc development. In more frequently exchanged visits, our and West European countries than one decade since the begin• economc and technological co• outweigh their differences. It ning of the reform and opening- operation has been remarkably therefore serves the interests of up, remarkable results have been fruitful, and our exchanges in the both sides to seek common achieved in China. The objective cultural, educational and other grounds while rising above the ex• of doubling the gross national fields have been steadily increas• isting differences. product of 1980 in ten years was ing. China appreciates the positive realized two years ahead of sched• 2. Mutual respect. China and role played by Spain in working ule. Our people's living standards West European countries are all for the political and economic in• sovereign states. China cherishes have improved noticeably. The tegration of Western Europe, the its hard-won independence. Both policy of reform and opening-up relaxation of tension, stability in sides share a strong sense of na• has become our basic state policy. Europe, and the peaceful settle• tional dignity. China and West A policy which has brought tangi• European countries should res• ble benefits to our people will not ment of regional conflicts and pect each other and refrain from be changed, but will be adhered to other international disputes. The doing anything that might com• for a long time to come. While government of Spain has adopted promise the sovereignty, national continuing our economic reform, a wise and pragmatic approach to• unity and territorial integrity of we will press ahead with our pol• wards its relations with China, of the other side. itical reform. As China is a devel• which we express our apprecia• 3. Non-interference in each oth• oping country with a population tion. My current visit, like your er's internal affairs. Under the of more than 1.1 billion, we can• foreign minister's visit to China Charter of the United Nations, not copy mechanically any for• not long ago, is a complete suc• people of every nation have the eign models. Rather, we can only cess. We have every reason to be• right to choose their own road of carry out reform and construction lieve that with our joint efforts, development. As China and West in the light of China's actual con• Sino-Spanish friendship and co• European countries differ in na• ditions while paying utmost at• operation will have great pros• tional conditions, their political tention to maintaining its social pects in the yeat^ to come. •

BEIJING REVIEW, MARCH 11-17, 1991 INTERNATIOKAL

Pakistan Increases Oil Production

By Ren Liujun

n fiscal 1989-1990, the petro• and gas deposits rose quickly. has increased, too. In 1988, its leum and gas output of Pak• A number of larger foreign oil daily oil output was more than I istan's state-run Oil and Gas companies at this time invested 7,000 barrels, placing it third Development Corporation dou• in Pakistan, contributing to the among the country's five largest bled from the previous year, ris• rapid development of Pakistan's oil companies; production rose to ing from the third-ranking posi• oil and natural gas production over 14,000 barrels by 1989. The tion among the country's major in the 1980s. Recalling the past, figure doubled in 1990 to 28,000 oil and gas companies to the first. Pakistani people have observed barrels, making OGDC the top The company thus contributed that there would have been vir• oil company in Pakistan. Follow• greatly to the development of tually no oil and gas devel• ing eruption of the Gulf crisis, Pakistan's national economy. opment in Pakistan without OGDC was ordered to increase As early as in colonial times, OGDC's hard work in the early its oil output by 6,000 barrels per foreigners began to explore oil in 1960s. day. Although this has not fully Pakistani territory. Not long af• OGDC has now become a key compensated for Pakistan's oil ter the independence of Pakis• state enterprise engaged in both deficiency, OGDC has played its tan, rich gas deposits were dis• exploration and production. Its role at a crucial moment as a key covered in Baluchistan, luring resources include high-quality state enterprise should have. Last many foreign companies to ex• scientific research teams with year, OGDC handed in 1.5 bil• plore for oil. However, after no the most advanced equipment as lion rupees to the state treasury. lucrative discoveries were made well as a computer data base. After Mr. Nawaz Sharif as• in the 1950s, foreigners aban• The company's financial power sumed power as Pakistan's prime doned the apparently oil- minister, he put forward an deficient land. It was under Independence Memorial Tower in Lahore, Pakistan. Tang Min^zong industrial self-reliance pro• such circumstances that the gramme, especially stress• Pakistani government de• ing the exploration and cided to set up the Pakistan production of oil and na• Oil and Gas Development tural gas. Corporation (OGDC). This year, OGDC plans In the past 30 years, to drill 37 new oil wells and OGDC has exceeded the increase its output by 50 hopes of its founders. Pak• percent. istan's second largest natur• Recently, OGDC's presi• al gas field was discovered dent went to Manila to ne• by the company in 1965, gotiate with the Asian De• and in 1968 the country velopment Bank for a loan first struck oil in Tut Dou- of approximately US$60 dal. In the 1970s, OGDC's million aimed at develop• development efforts prod• uced further achievements, ing new oil and gas fields. changing Pakistan's image OGDC is also going to co• as an "oil-poor country." operate with Australia in From the mid-1970s on, oil exploration and produc• several foreign companies tion. It is planning to im• returned to Pakistan to set port advanced equipment up joint ventures, and ev• to set up its own oil refi• entually succeeded in dis• nery in order to guarantee covering several rich oil high-quality gasoline for fields. Optimism about Pakistan's aviation indus• Pakistan's underground oil try as soon as possible. •

BEIJING REVIEW, MAKCH 11-17,1991 13 INTERNATIONAL

Changes in Soviet-Japan Relations

by Sun Dongmin

ome noticeable changes ty was signed. However, the So• plies with strategical needs of have recently occurred in viet Union changed its mind af• both sides. The Soviet Union de• S the relations between the terwards because of some com• sires to improve its relations with Soviet Union and Japan. A dele• plicated reasons. It refused to ad• Japan with the aim of relying on gation from the Japanese House mit that there was a territorial the capital and technology of Ja• of Councillors visited the Soviet issue between the two countries. pan to explore its Siberia area, Union in January this year and Flexibility was shown in the So• thus promoting its economic re• was followed by the Japanese viet attitude last year when Mos• form. Japan wants to improve its foreign minister on a visit to cow began admitting that there relations with the Soviet Union Moscow. The Soviet Union sent was a territorial dispute between to enhance its position in the world. However, as the relations a large delegation to participate the two countries. In January of between the two countries have in the meeting of the Japan- this year, Soviet President Mik• remained cold for a long time, Soviet Combined Economic hail Gorbachev said that he improvements will be restricted Committee held in Tokyo in the wished to discuss with Japanese by many factors and tested by same month. There has been a Prime Minister Toshiki Kaifu time. Japan has been adhering to notable increase in reports in Ja• the issues related to the signing the principle that any fundamen• panese newspapers on the im• of a peace treaty, including the tal improvement in economic re• proved relations between the two territorial dispute. The change lations should follow that of pol• countries. Some of them even of the Soviet attitude was ac• itical relations, stressing that described the two countries' claimed by the Japanese govern• the progress of economic co• thawing relations as "the dawn• ment. Japan deleted the sentence operation should coordinate with ing light of a new era." in its defence White Paper which the settlement of territorial dis• The improvement of relations described the Soviet Union as pute. The Soviet Union has been between the Soviet Union and the "potential threat" to Japan maintaining the theory that ex• Japan is of great significance to and agreed, for the first time panding economic co-operation peace and stability in North• since World War II, to provide could create necessary conditions eastern Asia. Relations between two billion Japanese yen in eco• for the settlement of the issues existing in bilateral relations. It these two countries in the nomic assistance gratis to the So• asked Japan to provide economic postwar era had been abnormal• viet Union. A working commit• tee was established by the two assistance and proposed an ex• ly cold. The main barrier came tensive plan to strengthen eco• from their dispute over the sov• governments in December of 1988 to prepare the work for nomic co-operation between the ereignty of four islands (the two countries at a recent meeting signing a peace treaty. The com• "Northern Territories") north of of the Japan-Soviet Combined Japan which have been occupied mittee has held six rounds of Economic Committee. However, by the Soviet Union since the meetings to date. All the flexi• Japan's reaction to the plan was end of World War II. Japan has bilities showed by Moscow and prudent. It indicated that it been demanding the return of Tokyo have been seen as part of would not agree to provide eco• these islands by the Soviet their efforts to create a bet• nomic assistance to the Soviet Union, regarding it as a prere• ter environment for Gorbach• Union before it sees the results of quisite for signing a peace treaty ev's visit to Japan, scheduled for Gorbachev's visit and has an ev• and improving relations. The two April. Both want to see that the aluation on the prospects of the countries signed a joint declar• visit will achieve satisfied re• reform in the Soviet Union. Ob• ation on October 19, 1956 in sults. viously, although both Japan and the Soviet Union have adopted which the Soviet Union agreed The thawing of relations be• positive attitudes towards im• to return Habomai-shoto and tween the Soviet Union and Ja• Shikotan-to, two of the four is• proving their relations, they are pan is the result of the changes in cautious to take action. • lands, to Japan after a peace trea• the world situation. It also com•

14 BEIJING REVIEW, MAKCH 11-17, 1991 INTERNATIONAL

Western Pacific: A Dynamic Region

by Xue Mouhong fTphe Western Pacific region, years. In 1989, however, the av• also loosened up their quotas on I including Japan, South Ko- erage growth rate of these four imports in recent years. In South rea, Taiwan, Hong Kong ASEAN countries reached 7.8 Korea, 95 percent of its imported and countries of the Associa• percent, surpassing the 6.4 per• items are unlimited, and the tar• tion of Southeast Asian Nations cent rate of the "four little dra• iff rate for imported goods is in• (ASEAN), shows some^ notice• gons," and also higher than that creasingly being reduced. It is ex• able characteristics in its econo• of South Asia. This new situation pected that its average tariff rate mic development. continued in 1990. The ASEAN will drop to 7.9 percent by 1993. region is now experiencing the The change in Japan and the most rapid economic develop• "four little dragons" from an A Vital Region ment in the world. Thailand, for economy oriented towards exter• The region's economy has seen example, saw a growth rate of nal demand to one aimed at in• a rapid expansion and high more than 13 percent in 1988, ternal demand does not mean growth rate. The world economic more than 12 percent in 1989 that their economies have be• growth rate was 4.1 percent in and close to 10 percent in 1990. come import-oriented, but, on 1988, dropping to 3.2 percent in the contrary, that their export- 1989 and to a probable 2 percent oriented economies are entering in 1990. Yet in the Asian-Pacific Policy Adjustments a new stage. In fact, they are region, the economic growth rate In the past, Japan and the more open to the outside than is expected to have reached 5.4 "four little dragons" relied on ex• ever before. One of the goals to percent in 1990, basically the ternal demand to stimulate the import greatly is to strengthen same as in 1989. This is marked• development of their economies. exports. ly higher than that of other re• But now they have changed The four major ASEAN coun• gions. In 1989, the average eco• their economies to the internal- tries differ from the "four little nomic growth rate of developed demand model as they meet dragons." They are now at the capitalist countries was 3.7 per• stronger protectionism and com• peak of a transformation from cent, while Japan's growth rate petition in outside markets while import substitution to external- reached 4.9 percent and main• facing increasing internal de• demand-oriented economy. tained the same level in 1990. mand to improve living stan• As for developing Asian- dards. Even Hong Kong and Sin• Pacific countries or regions, the gapore, which possess very small Internal Co-operation average economic growth rate of local markets and rely heavily Many Asian-Pacific countries the "four little dragons" (South on foreign trade, have begun to and regions take the United Korea, Taiwan, Hong Kong and further promote economic de• States as their main export mar• Singapore), was higher than that velopment through internal de• ket. In recent years, however, of four major ASEAN countries mand. the trade volume between Asian- (the Philippines, Thailand, Ma• During such a transition per• Pacific countries and regions laysia and Indonesia) for many iod, Japan and South Korea have themselves has increased rapidly. BEIJING REVIEW, MAR^H 11-17,1991 15 INTERNATIONAL

reaching US$234 billion in 1988, 24 percent, and its exports to the cent. or US$193 billion more than that four major ASEAN countries by The reasons for their intra- between the Asian-Pacific region 35 percent; exports from the trade development are as fol• and North America. This marks "four little dragons" to Japan lows: the beginning of the Asian- were up by 36 percent, export First, Japan and the "four lit• Pacific economies decreasing re• trade among the "four little dra• tle dragons" stimulate the in• liance on the United States. gons" shot up by 46 percent, and crease of their internal demand. In the Asian-Pacific region, their exports to the four major In 1989, Japan's gross import the trade among Western Pacific' ASEAN countries by a whop• value reached US$210 billion countries and regions is increas• ping 50 percent; the four major and that of the "four Httle dra• ing most rapidly. According to ASEAN countries' exports to Ja• gons" topped US$230 billion. reports from the Asian Develop• pan increased by 17 percent, ex• The sum of the two numbers ap• ment Bank, comparing 1988 with ports to the "four little dragons" proached 90 percent of US gross 1987, Japan's exports to the were up by 29 percent and their import value in that year. "four little dragons" increased by mutual exports rose by 12 per• Second, protectionist pressure

A glimpse of Jakarta, capital of Indonesia. Tang Mfnglong

16 BEIJING REVIEW, MARCH 11-17, 1991 INTERNATIONAL

from the United States and Eu• land and Indonesia, 150 percent attracted worldwide attention, ropean countries is on the rise. in Malaysia and the Philippines. will probably become two more The United States has used the Of the direct investment flowing "httle dragons." Special 301 provisions in the into Thailand in 1988, a full 80 Although a kind of complex Omnibus Trade Act and can• percent came from Japan and the relationship — mutual competi• celled the generalized system of "four little dragons." As for di• tion mingled with mutual co• preference (GSP) for the "four rect investment into Malaysia, operation — still exists in the little dragons." Facing the heigh• the Philippines and Indonesia, Western Pacific region, the pre• tened clustering trend in the 66 percent, 56 percent and 42 sent situation is characterized world economy, Western Pacific percent respectively came from by co-operation. Whereas in the countries and regions worry that Japan and the "four little dra• past, countries in the region protectionist trade barriers from gons." The five countries set up could only co-operate in process• the United States and European plants in the four ASEAN coun• ing different grades of commod• countries will only increase. tries and carried equipment, ities, they are now dividing up Thus, they have paid more atten• parts and semifinished products their work for processing a single tion to developing regional trade. in. The finished products are commodity. Therefore, with the Third, the increasing mutual sold not only in the local market further development of interna• investment in the Western Pacif• or to other countries but are of• tional division of labour, their ic region promotes the interna• ten directed back to the investing mutual exchange of products has tional trade expansion. The Ja• countries or regions. Therefore, become more intimate. More im• the investment promotes trade. panese yen has risen sharply portantly, the circulation of cap• since 1985, with the exchange ital and technology has in• rate of the Singapore dollar and interdependence creased, resulting in progres• other currencies also increasing sively complementary and inter• to different degrees. Meanwhile, In recent years, Japan and the dependent economies. with rapid economic develop• "four little dragons" have been ment, the "four little dragons" promoting economic prosperity One reason for Western Pacif• are also encountering such con• in the ASEAN countries. In ic countries' and regions' rapid ditions as soaring land price, 1988 and 1989, the "four little economic development is their shortages of manpower and in• dragons" surpassed Japan and early assessment and immediate flated wages. As a result, the the United States, becoming the response to new opportunities in competitive export power of Ja• largest investors in the four ma• the face of the new global eco• pan and the "four little dragons" jor ASEAN countries. The 1960s nomic situation. With the ever has weakened, and they have had high tide of capital, technology quickening development of to transfer .labour-intensive in• and commodity circulation in science and technology, informa• dustries or processes to lower the Western Pacific region tion is of paramount importance, cost areas. The external invest• brought about the first- and the world economy operates ment of Japan and the "four lit• generation newly industrialized faster than before. Thus time tle dragons" in the Western Pa• economic communities. The cur• becomes more and more signifi• cific region has focused on rent trend of capital, technolo• cant. Some economists feel that the above-mentioned four ma• gy and commodity circulation, developing countries must speed jor ASEAN countries. In 1988, which began in the mid-1980s, up their responses in the eco• the volume of direct foreign in• is es^tablishing the second- nomic field, otherwise they will vestment approved by these generation newly industrialized lose international orders and countries was more than 200 per• economic communities. Thai• capital and fail in international cent higher than 1987 in Thai• land and Malaysia, which have economic competition. •

BEIJING REVIEW, MARCH H-17,1991 17 CHINA

Administrative Structural Reform

by Xing Zhen ince China started a reform various ministries and commis• money and price index as well of the government appara• sions under the State Council. as realistically evaluated such is• S tuses in 1988, it has scored In 1989, the State Organization sues as finance, loan lending and remarkable achievements. In the Committee inspected and exam• borrowing, foreign exchange and coming years, the structural re• ined the "three fixing" pro• the balance of goods and mater• form of administration, will be gramme in various departments. ials, augmented its monitoring deepened as an important aspect Over 80 percent of the depart• and forecast of the macro- of the reform of the political sys• ments have completed the work. economy and thus played an ap• tem. Currently, the State Council has propriate role in economic man• After China introduced the 68 departments, 20 less than dur• agement. poUcy of reform and opening up ing the period prior to the reform While carrying out reform of to the outside world in 1979, and, by the end of 1989, these the organizational structure of the • drawbacks of China's gov• departments had 44,800 employ• the State Council, close attention ernment organization became vi• ees, 7,900 less from the period has been paid to the reform of sible. Deng Xiaoping once point• prior to the reform. This reform local organizational structures at ed out, "In our economic man• has streamlined government de• selected points in the country. In agement, we have overstaffed partments and raised their effi• 1989, the Chinese government and overlapped organizations, ciency. decided that Hebei Province, complicated procedures and low These steps differ from the Harbin, Qingdao, Wuhan and efficiency. Without reform, our previous streamlining of the ad• Shenzhen, and nine counties modernization programme and ministrative structure. In accord• should launch a pilot reform of socialist cause would be ruined." ance with the principle of se• local organizational structures. After a conscientious investiga• parating the functions of the Efforts of the past year show tion early in 1988, the First Ses• government from those of enter• that the reform of organizational sion of the Seventh National prises and institutions, power is structure has been successful to Congress adopted a programme now delegated to enterprises and varying degrees in these locali• to re^vamp the State Council. institutions, given fairly high ties. They have also had prelimi• After deciding upon the re• technical service functions to re• nary success in streamlining ad• form programme, the State search institutes and transferred ministrative staff by changing Council organized the imple• those matters which should not functions and bringing relations mentation of the programme for or could not be managed to ap• into better balance. According to nine months. At the same propriate agencies, thus inten• statistics made in Harbin, the time, the principal administra• sifying the macro-control func• number of government organi• tive cadres of various ministries tions of the government. For zations at department level has and commissions under the State instance, the State Planning dropped from 69 to 53 and the Council studied the "three fix• Commission, set up after the re• number of staff members dwin• ing" programme, that is fixing form of the organizational struc• dled from 6,167 to 4,900. the functions, the setup and per• ture, has strengthened its macro- The successful reform of the sonnel quota. After many con• control functions of overall bal• administrative structure of the sultations and revisions, a State ancing, put forward realistic op• State Council and the reform of Council ad hoc committee final• inions of economic growth, in• the local political organizations ly examined and approved the vestment scale, consumption is just the beginning. As far as "three fixing" programme for the funds, budget deficit, issuance of the reform of the organizational

18 BEIJING REVIEW, MARCH 11-17,1991 CHINA

structure of the State Council is the central government and in adopted "counter-measures " to• concerned, the external relations accordance with the principle of wards the decisions taken by the of some departments should be identification of rights and res• central government and thus ser• further brought into better bal• ponsibilities, it is necessary to iously affected the implementa• ance, their work efficiency furth• handle properly the relations be• tion of some decisions. In the er enhanced and changes in their tween the central and local gov• future, reform will follow the functions further implemented. ernments. principle of identifying rights As far as the pilot reform of the — Perfect the decision-making and responsibilities, encourag- local organizational structure is system and assume a scientific ment of moderate management concerned, such problems as con• approach towards decision mak• in order to readjust the setup, flicts between the higher and ing. China's Constitution and streamline the staff, improve the lower levels, overstaffing and up• laws stipulate that administra• leading method of administra• grading of local organizations tive organizations implement the tive organizations, determine the and increase in the number of system of overall leadership responsibility of the administra• posts for leading cadres are be• through administrative cadres at tive cadres at various levels and yond its immediate scope. These various levels. While strengthen• conduct unified command and problems still exist and need to ing the system of overall leader• action so as to prevent a defor• be dealt with by further deepen• ship by leading cadres, it is also mation of policy. At the same ing the reform. necessary to further promote the time, a principle for handling af• administrative decisions at var• fairs, procedures and rules shall ious levels in a scientific and de• be established scientifically. A si• Tentative Ideas mocratic way and avoid as many tuation of disputing minor mat• During the Eighth Five-Year errors in decision-making as pos• ters and shifting responsibility Plan period (1991-1995), in or• sible. The reform is intended to onto others will be eliminated. It der to meet the need for social achieve the following: L Perfect is necessary to improve the work and economic development, the administrative decision-making efficiency of the executive or• structural reform of administra• procedures according to law, for• ganizations, strengthen co• tion will intensify decision• mulate procedural laws and re• ordination of various depart• making functions, perfect the gulations and ensure that major ments at all levels, and augment macro-control system, enhance decisions are based on scientific the ability of administrative or• the authority of administrative proof, wide consultation and de• ganizations to adapt. command, readjust the arrange• mocratic discussion. 2. Establish —Perfect the system of admin• ment of functions, impact local and perfect necessary decision• istrative supervision and streng• organizations and perfect the making auxiliary organizations, then supervision over violations of mechanism of administrative gradually set up a team of highly discipline. This reform will con• functions. Tentative ideas for the qualified staff officers, gradual• tain the following aspects: 1. Ad• reform are as follows: ly perfect decision-making and ministrative organizations at all — Continue to rationally de• non-governmental consultative levels should be clear about their ploy functions and bring relations organizations and attract the obligations, work out the rules of into better balance. On the one participation of influential and actions for administrative per• hand, functions should be ration• competent experts and scholars sonnel and cultivate an adminis• ally deployed in domestic politi• in the decision-making process. trative order for handling affairs cal affairs, foreign affairs and in — Expand executive adminis• according to law and regulations. the economy and culture and the trative organizations and intensi• 2. Establish a better administra• relevant organizations set up. On fy the authority of the administra• tive and supervisory system, par• the other hand, functions will be tive command. At present, there ticularly regarding the supervi• rationally deployed in the gov• exists a situation of overly inde• sion of government disciplines ernment at various levels. On the pendent action in some adminis• and formulate and perfect the premise of the unified decree of trative departments. They have laws and regulations of adminis-

BEIJING REVIEW, MAKCH 11-17,1991 19 CHINA

trative punishment. Through raise their quality. It is necessary levant laws and regulations and self-supervision by administra• to reform the existing cadre sys• implement established adminis• tive organizations, the inspection tem, implement the system of trative procedural law so as to and supervision by supervisory government functionaries and eliminate the unhealthy tenden• departments and the reporting bring up a contingent of govern• cy of bending power for person• system of the masses, it is neces• ment personnel having high pol• al interest and promote the con• sary to seriously and conscien• struction of a clean and in• itical performance and a strong dustrious government. It is ne• tiously investigate and deal with devotion to their work. cessary to simplify the proce• violations of disciplines. 3. Ex• — Improve the work of govern• dures that "forward organiza• pand the functions of superviso• ment at the grass-roots level and tions," go by in handling affairs, ry organizations, bring into bet• huild closer relations between the set rigorous rules on time limit ter balance the relations between government and the people. The for handling affairs and breaks the supervisory departments, lower levels of government de• away from the way of dillydally• particularly relations between partments are the direct "for• ing in handling affairs. It is also the Party and government disci• ward organizations" that main• necessary to make the work sys• plinary departments and the au• tain frequent contacts with the tem of the "forward organi• diting department and set up an masses and future reform will zations" known to the public and effective supervisory system. define their duties and their strengthen the construction of a — Implement the system of rules for handling affairs. It is legal system for administration. government functionaries and necessary to gradually perfect re•

Economic Restructuring in the 1990s

by Ni Jixiang hree noted Chinese econo• year Development Programme. prise reforms in the following mists recently aired their Taking large enterprises as the respects. First, it is conducive to Topinions about China's re• "core" and regrouping numerous the separation of the government form and opening to the outside enterprises around the core along and enterprises, long a basic tar• world in the 1990s. a specialized line in light of their get of China's economic restruc• Developing Enterprise Groups. A technological and economic rela• turing. Although progress has fundamental step is to continue tions. An enterprise group. Ma been made with the efforts to the reform in enterprises, says says, is better able to make full expand the autonomy of enter• Ma Hong, director of the Re• use of the advantages of group prises, it is far from satisfactory. search Centre to Advise on Eco• management and specialized co• Experience proves, however, that nomic, Technological and Social operation. Developing enterprise developing enterprise groups can Development under the State groups will contribute to the de• lead to a final separation of the Council. He points out that de• velopment and sales of new prod• government and enterprises and veloping enterprise groups is a ucts, specialized production and make enterprises responsible for significant way to further re• management of scale, thus re• its losses and profits. Allowing forming Chinese enterprises. Sig• ducing costs and increasing eco• large enterprises to take charge nificant, because it has been nomic returns. Developing en• of run-of-the-mill enterprises written into the 8th Five-Year terprise groups will prove to be and "milk-producing" enterpris• Plan (1991-96) and in the Ten- significant for deepening enter• es to proliferate will prove to be

20 BEUING REVIEVV, MARCH 11-17,1991 CHINA

a revolution for China's industri• exchanges between them can ample, the contract responsibili• al management system. make use of these advantages. ty system is a feasible form right Should the principles for de• The achievements China has now, but it is also transitional veloping enterprise groups be ad• made over the past decade under in nature due to its drawbacks. hered to in reorganizing China's the open policy are international• While the separation of profit industry, we would be able not ly recognized and continuation and tax is in itself not an enter• only to improve the relationship of the open policy makes sense to prise form, it represents a step between the government and en• the Chinese people. While sum• in the right direction—investors terprises but also improve the ming up the experiences of the harvest the profit, government management of Chinese enter• past decade, he says, it is neces• the tax. The adoption of this prises. sary to deal properly with the method is helpful for the trans• Second, developing enterprise relationship between the open formation of the contract res• groups will provide favourable policy and protection of China's ponsibility system into the joint- conditions for the steady devel• national economy. Mishandling stock system, the target of the opment of a joint-stock system in the relations in the past result• reform of large and medium- state-owned enterprises. This will ed in over-import of such non• sized enterprises." not bring about social unrest, productive products as cosmet• To achieve this transition, he like price reform, nor will it in• ics, electrical appliances and lux• says, three steps need to be crease financial pressures. It ury cars while urgently needed taken: First, state-owned assets will improve the management of funds and technology were not should be appropriately ap• state-owned assets and take the imported. These problems de• praised and evaluated in order to interests of the central and local serve close attention in the com• protect them from any erosion. governments and enterprises into ing years. Imports should be Second, laws concerning the proper consideration. carefully selected in order to pro• joint-stock companies in regard Open Wider to the Outside World. perly protect national industries. to conditions and procedures for China will open wider to the out• To protect "properly" does not establishing joint-stock compan• side world, says Dong Fureng, mean putting the national indus• ies, organization of joint-stock deputy director of the Financial try into a hothouse separate from companies and transfer of stocks and Economic Committee of the outside world. Rather, China should be formulated as soon as the National People's Congress should expose its industry to the possible so that the establishment (NPC). outside world in order to raise its of joint-stock enterprises will The world economy, he says, competitiveness on the interna• be standardized from the start. has become increasingly interre• tional market. Although many Third, the management system lated, mutually co-operative and products are already on the in• for state-owned assets should be interdependent. Economic co• ternational market, we should improved so as to protect the in• operation and trade are playing a expand the list." terests of state assets. If these more and more significant role The Joint-Stock System. It is en• three steps are taken gradually in developing the national econ• couraging, says professor Li Yin- and relevant measures worked omy of different countries. ing of Beijing University, that in out, a joint-stock system based China opening wider to the the 8th Five-Year Plan and the on public ownership will be esta• outside world and expanding its Ten-Year Development Pro• blished for a majority of large exchanges with other countries is gramme the joint-stock system and medium-sized enterprises in theoretically based on the fact based on public ownership has the 1990s, a solid micro- that different countries have dif• been taken as a way to further economic foundation for the op• ferent advantages. For example, reforming Chinese enterprises. eration of the socialist planned developed countries have tech• "In recent years I have always commodity economy will be in nological superiority while devel• advocated differentiating the tar• place, and the fundamental task oping countries are rich in la• get pattern of enterprises from for restructuring China's econo• bour resources. Co-operation and the present feasible form. For ex• my will thus be fulfilled. •

BEIJING REVIEW, MARCH 11-17,19»1 21 CHINA

Attuning Taxation to Investment Climate

by Our Staff Reporter Han Guojian

In the past two years, China has rectified its taxation concerning foreign-funded enterprises by improving its tax rules and regulations. This provides a balanced environment for foreign business investment.

hen taxation became investors that their investments tax rules and regulations of an outstanding issue in are safe and treated equally. In foreign-funded enterprises which Wdealing with foreign- the last two years, the Chinese were formulated without author• funded enterprises after the tax authorities have adopted ization. adoption of the policy of opening some measures to rectify local Su Xiaolu, an official from the to the outside world, China's tax tax rules and any unauthorized Department of Foreign Taxation authorities were confronted with regulations and to deal with tax Management under the State two problems. On the one hand, evaders. Such action has shown Administration of Taxation, said the local governments were prov• the determination of the Chinese that by the end of 1990, a total iding, without approval from government to improve the in• of 31 provinces, autonomous re• higher authorities, preferential vestment environment for for• gions and municipalities as well tax reduction and exemption in eign businessmen. as cities which plan separately, order to attract more foreign in• The current tax rectification including Anhui, Shandong, vestment, actions which threw work has guaranteed a solution Henan, Sichuan, Shanxi prov• China's taxation situation into to these two problems and streng• inces, the Guangxi Zhuang Au• confusion. On the other hand, thened management of tax col• tonomous Region as well as some foreign businessmen were lection over foreign-funded en• Shenyang, Harbin, Xiamen, taking advantage of loopholes in terprises. It has also provided an Qingdao and Chongqing, recti• China's imperfect tax laws and environment for equal competi• fied and revised their unauthor• enterprise management to evade tion among foreign businessmen ized tax preferential rules and taxes. and attracted increasing foreign regulations. The same action is According to a Beijing econo• investment for construction of being taken in Hebei, Liaoning, mist, the tax environment is factories. Guangdong and Jiangxi prov• a main criterion for judging inces, and in the cities of Wuhan whether the investment environ• and Guangzhou. ment is good or not. A good tax Local Regulations Since 1980, China has es• environment has a low tax rate Starting in 1988, the central tablished special economic zones and, most important, ensures government has rectified local and opened coastal cities and

22 BEIJING REVIEW, MARCH 11-17, 1991 DOCUMENTS

Statistical Communique of the State Statistical Bureau of the People's Republic Of China on National Economic and Social Development in 1990

(February 22,1991)

n 1990, people of all nationalities in China, plication of science and technology in agricul• under the leadership of the Party Central ture. A favourable climate also contributed to I Committee and the State Council, achieved the overall development of farm cultivation, significant progress in implementing the policy forestry, animal husbandry, fishery and sideline of economic rectification, improving the econo• production. The gross agricultural output value mic environment and deepening economic re• in 1990 was 738.2 billion yuan, up 6.9 percent forms. The gap between demand and supply was over 1989. The output value of farm cultivation narrowed, a bumper harvest was achieved, m,a- grew by 8.3 percent, forestry grew by 2.2 per• jor economic relations were adjusted, price in• cent, animal husbandry rose by 5.9 percent, creases were put under control and China im• sideline production rose by 3.4 percent, and proved its balance of payment. The favourable fishery was up 6.7 percent. development of the national economy has con• Production of all major farm products in• tributed to political and social stability of the creased. The total grain output reached a histor• country. Progress was also made in the fields ical record high ,of 435 million tons, or 6.7 of science and technology, education, culture, percent more than production in 1989. There public health and sports. Preliminary statistics was a notable increase in the output of cotton, indicate that the annual gross national product oil-bearing crops and sugar crops and the prod• (GNP) of China was 1,740 billion yuan, a 5 uction of vegetables and fruits registered good percent increase over 1989, and the national harvest. However, the good agricultural harvest income was 1,430 billion yuan, a 4.8 percent in 1990 did not mean that the comprehensive rise. The major problems in the economy were: production capacity of agriculture had taken a an increase in the stock of finished products, the new step forward. continued decline of economic efficiency, the deteriorating financial situation of the govern• The output of major cash crops was as follows; ment and the mounting inflationary pressure. 1990 Increase over (ton) 1989 (%) Cotton 4,470,000 18.1 I. Agriculture Oil-bearing crops 16,150,000 24.7 Of which: Rapeseed 6,930,000 27.5 In 1990, local governments at all levels at• Sugarcane 57,270,000 17.4 tached great importance to the development of Beetroot 14,530,000 57.2 Jute, ambary hemp 720,000 9.5 agriculture by organizing large-scale farm and Cured tobacco 2,260,000 -6.2 water conservancy projects and promoting ap• Silkworm cocosns 530,000 9.4 I DOCUMENTS Tea 530,000 -0.3 up 10.6 percent. Rural consumption of electric• Fruits 18,760,000 2.4 ity was 83.5 billion kwh, up 5.7 percent. Irriga• tion and water conservancy facilities in rural areas were further reinforced, resulting in ex• New achievements were made in forestry as panded acreage of irrigated farmland. the quality of afforestation further improved. The rural economy kept expanding. The total The construction of fast-growing and high-yield timber bases was accelerated. The second phase output value of rural society in 1990 was 1,625.3 of the project to build "shelter forest belts" in billion yuan, an 8.8 percent growth over the northern China progressed smoothly, the shelter previous year. Taking a 54.6 percent share in the forest project along the middle and upper reach• total output value of rural society, the output es of the Yangtze River was begun, and new value of rural industry, construction, transpor• progress was achieved in afforestation in plain tation, trade and catering rose by 9.9 percent. areas. Remarkable achievement was made in prevention of forest fire. The total consumption of forest resources began to drop while the forest II. Industry coverage rate rose. Plant diseases and insect The industrial production kept up its momen• pests were still a severe problem. tum of growth. The gross industrial output val• Steady progress was made in animal husban• ue in 1990 was 2,385.1 billion yuan, up 7.6 dry with the continued growth in the output of percent over 1989. If industrial enterprises at meat, poultry, egg and dairy products. and below the village level were excluded, the industrial output value would be 1,962.9 billion The output of major animal products and livestock was as yuan, up 6 percent over 1989. Of the total follows: industrial output value, that of the state-owned 1990 Increase over industry grew by 2.9 percent, collective enter• 1989 (%) prises grew by 9.1 percent (of which the town• Pork, beef and mutton 25,040,000 tons 7.7 ship industry increased by 12.5 percent), pri• Cow milk 4,130,000 tons 8.2 vate enterprises grew by 21.6 percent, and joint- Sheep wool 240,000 tons 1.8 venture enterprises and foreign enterprises rose Pigs slaughtered 310,000,000 head 6.2 by 56 percent. The output value of state and Pigs in stock collective enterprises accounted for 91.4 percent (year-end figure) 360,000,000 head 3.0 of total industrial output value. Sheep and goats in stock The output value of light industry in 1990 was (year-end figure) 210,000,000 head -0.8 1,179.9 billion yuan, up 9.1 percent, and the Large animals in stock (year-end figure) output value of heavy industry was 1,205.2 bil• 130,000,000 head 2.7 lion yuan, up 6 percent. Consumers had more choices as many new products were put into the The fishery industry continued to develop. market. The shortage in supply of key raw ma• The total output of aquatic products in 1990 was terials and energy products was alleviated as 12.18 million tons, up 5.7 percent over the pre• production increased. However, the changing vious year. Of this total, the output of fresh• market brought out a decline in the production water aquatic products was up 6 percent and of some electric and mechanical products used that of marine products was up 5.5 percent. for investment purpose and of the most expen• There was improvement in the general condi• sive consumer durables. The progress of adjust• tions for agricultural production. By the end of ment in the industrial structure was slow and 1990, the aggregate power of the nation's farm imbalances were still prominent. machinery was 285.4 billion watts, up 1.7 per• cent over 1989. There were 820,000 large and The output of major products was as follows: medium tractors, down 3.6 percent; 6.98 million 1990 Increase small and hand tractors, up 6.6 percent; 620,000 over trucks; down 1.3 percent; and irrigation and Million 1989 (%) drainage equipment with a total power capacity Yarn 4,5 tons -5.6 Cloth 18,000 metres -4.9 of 70.6 billion watts, up 3 percent. A total of Woollen fabrics 280 metres 0 26.07 million tons of chemical fertilizers (100 Machine-made paper percent effective content equivalertf) were used, and paperboard 13.3 tons -0.2

II DOCUMENTS

Sugar 5.71 tons 14.0 enterprises whose contract expired in 1990. For Salt 19.84 tons -29.9 the extended contracts, improvements were Cigarettes 32.9 cases 3.0 made with regard to the basis and contents of Synthetic detergents 1.484 tons 1.2 the contract. At the same time, experiments Daily aluminium ware 0.0727 tons -11.6 were carried out in selected areas on "separating Bicycles 31.41 -14.6 TV sets 26.62 • -3.8 taxes from profits, repaying loans and setting Of which: colour sets 10.23 8.8 the contractual basis after taxation." Tape recorders 29.7 26.4 Cameras 1.899 -22.6 Household washing III. Investment in Fixed Assets and machines 6.526 -20.9 Construction Household refrigerators 4.754 -29.2 Total energy production Investment in fixed assets rebounded in 1990 (standard fuel equivalent) 1.040 tons 2.4 after the State Council decided to expand in• Coal 1,080 tons 2.5 vestment demand to an appropriate level in Crude oil 138 tons 0 order to stimulate the market and promote Electricity 618,000 kwh 5.7 production. The completed investment in fixed Of which: assets of the country in 1990 was 445.1 billion Hydro-electricity 126,000 kwh 6.5 yuan, an increase of 18.5 billion yuan or 4.5 Steel 66.04 tons 7.2 percent over 1989. The investment of state- Rolled steel 51.21 tons 5.4 owned units was 292.7 billion yuan, up 10.5 Cement 203 tons -3.3 percent; that of collective units was 55 billion Timber 54 cub m -6.9 yuan, down 2.8 percent, and individual invest• Sulphuric acid 11.69 tons 1.4 Soda ash 3.746 tons 23.3 ment was 97.4 billion yuan, down 5.6 percent. Chemical fertilizers 19.12 tons • 6.1 Construction projects were put under control. Chemical insecticides 0.2293 tons 10.3 There were 123,000 capital construction projects Power-generating and technical updating and transformation pro• equipment 11.43 kilowatt -2.7 jects by the state-owned units which were under Machine tools 0.1178 -34.1 construction in 1990, or 3,536 projects less than Motor vehicles 0.5091 -12.8 the year before. These 123,000 projects had a Tractors 0.039 -1.5 total investment of 1,155.4 billion yuan, or 16 Locomotives 0.000655 -3.7 percent more than that in the previous year. Steel ships for civilian However, there was no significant change in the use 1.23 tons -13.4 poor investment return. The investment structure was adjusted. The The economic returns for enterprises contin• preferential investment policy of the govern• ued to fall. In 1990, state-owned industrial en• ment helped to reinforce construction projects terprises covered in the state budget turned over in agriculture, energy, transportation and posts a total of 127.1 billion yuan in profits and taxes, and telecommunications departments. Of the an 18.5 percent drop compared with the pre• total investment of state-owned units, the in• vious year. Of this the drop in profits was 58 vestment in agriculture took 8.1 billion yuan, up percent. The stock of finished products in• 31.2 percent; its share in total investment rose creased, with the turn-over time for circulating from 2.5 percent in 1989 to 3 percent; the in• funds increasing from 109 days in 1989 to 127 vestment in energy industry took 81.4 billion days. The ratio between capital and profit/tax yuan, up 15.6 percent, and its share rose from dropped from 100:19.39 to 100:13.76. There was 27.8 percent to 29.9 percent; and the investment a slight rise of 0.8 percent in overall labour in transportation, posts and telecommunications productivity. The quality of certain products took 39.3 billion yuan, up 46.1 percent, and its was unstable and production cost continued to share rose from 10.7 percent to 14.4 percent. rise. The number of losing enterprises increased In 1990, the investment in capital construc• with a readjusting overall expansion of losses. tion projects by state-owned units (including the The enterprise contract system was further purchase of motor vehicles and ships) was 170.3 improved. By the end of last year, 44,604 state- billion yuan, up 12.3 percent over 1989. Of this owned industrial enterprises extended their res• total, the investment in productive projects was ponsibility contracts, some 88.6 percent of all 123 billion yuan, with a share in capital con-

Ill DOCUMENTS struction investment rising from 68.6 percent highways, and 22.56 million tons of cargo- to 72.2 percent; and the investment in non• handling capacity of coastal harbours. productive projects was 47.3 billion yuan, and The economic returns of construction enter• its share dropped from 31.4 percent to 27.8 prises continued to drop. The gross output value percent. Construction of office buildings, hotels of state-owned construction enterprises was 90.3 and other non-productive projects was effective• billion yuan, down 3.9 percent compared with ly controlled. The investment in technical up• 1989, and the total floor space of buildings dating and transformation projects in 1990 was under construction was 197 million square 82.8 billion yuan, up 5.8 percent over 1989. Of metres, down 7.9 percent. Overall labour prod• this total, investment aimed at energy conserva• uctivity per person was 14,547 yuan, down 1.5 tion and at increasing the variety of products percent. Losses in the construction industry in• and improving the quality of products increased creased and the number of panprofitable Nen- by 14.1 percent, its share rising from 23.3 per• terprises expanded. cent in 1989 to 25.3 percent. New progress was made in geological surveys. The construction of key state projects made Two hundred and sixty-seven mineral deposits rapid progress with a number of projects com• were discovered or proven as industrial deposits, pleted and put into operation. An investment of and progress was reported in the survey of 102 42.6 billion yuan was put into 200 key projects mineral areas. Geological surveying units com• which were organized by the state to be com• pleted a total drilling of 9.05 million metres. pleted within a reasonably defined construction The number of verified reserves increased for span, more than meeting the annual plan. In 57 kinds of minerals. Important progress was 1990, a total of 95 large or medium-scale capital made in surveying oil and natural gas reserves construction projects were completed. Among in Tarim of the Xinjiang Uygur Autonomous the key projects that were completed in 1990 Region, in the East China Sea and in the south• were: Malan Coal Pit at Gujiao Mining Area in ern area of Songliao Basin. Shanxi Province with an annual mining capaci• ty of 4 million tons of coal, Shidongkou Pow• er Plant in Shanghai with an installed power- generating capacity of 1.2 million kw, Yangtze IV. Transport, Post and 300,000-ton ethylene project in Nanjing, Yizh- Telecommunications eng Chemical Fibre Complex which is the larg• est chemical fibre production base in China, The pressure on transportation relaxed and the first phase of 410-km Datong-Qinhuangdao transportation order improved as communica• Railway (an electrified double-track railway tions and transportation steadily developed. dedicated to the transportation of coal using Freight transported by various means increased. heavy-load trains), the 375-km Shenyang- Ocean shipping was encouraged under a fierce Dalian Express Highway, the gigantic construc• competitive situation in the world shipping in• tion projects for the Uth Asian Games, and dustry. China's first high-energy particle accelera• The volume of transportation by various means was as tor—the Beijing positive-negative electron colli• follows: sion set. 1990 Increase Newly increased production capacity in 1990 over through capital construction projects includes: (billion) 1989 (%) 20.16 million tons of coal mining, 9.12 million Volume of freight kw of power generation, 13.32 million tons of oil transport 2,632.2 ton-km 2.9 Railway 1,059.3 ton-km 2.1 extraction, 1.03 billion cubic metres of natural Highway 344.1 ton-km 2.0 gas extraction (all including capacity through Waterway 1,165 ton-km 4.1 technical updating projects and investment in Of which: Ocean other types of projects); 600,000 tons of soda shipping 819 ton-km 6.5 ash, 250,000 tons of chemical fertilizers, 260,000 Airway 0.8 ton-km 17.4 cubic metres of timber felling, 1.69 million tons Pipelines 64.2 ton-km 2.1 of cement, 2.5 million weight cases of plate Volume of passenger glass, 127 km of new railways put into opera• transport 561.2 person-km -7.6 tion, 349 kilometres of double-track railways, Railway 261.6 person-km -13.9 551 km of electrified railways, 2,141 km of new Highway 260 person-km -2.3 Waterway 17.8 person-km -5.3 IV DOCUMENTS Airway 21.8 person-km 17.1 fans were up 1.9 percent, whereas the sales of Cargo handled at major most other commodities declined by various coastal harbours 0.46 tons -1.7 margins, including cotton cloth, woollen fabrics, sewing-machines, bicycles, wrist-watches, tape Revenue from transport increased. The price recorders, black and white TV sets and washing increase in railway transport brought about a machines. 29.7 percent growth in revenue. However, there Of the total retail sales, that of the state- was no significant improvement in the economic owned retail units rose by 3.2 percent, the col• returns. The daily output of railway locomotive lective units dropped by 3.5 perce'nt (of which for freight transportation was 859,000 ton-km, the supply and marketing co-operatives were only a slight increase of 0.7 percent over the down 0.7 percent), joint-ownership units of var• previous year. The economic results of local ious types rose by 24.8 percent, and individual •highway and waterway transportation enterpris• units rose by 5.8 percent. Sales by farmers to es remained poor. non-agricultural residents increased by 7.9 per• Fairly rapid progress was made in post and cent. telecommunications service, with business tran• The economic results of commercial depart• sactions in 1990 totalling 8 billion yuan, up 24 ments dropped by large margins. In 1990, the percent over 1989. A growth of more than 20 profit and taxes of state-owned commercial en• percent was registered for fast postal services, terprises and supply and marketing co• express delivery service, faxes and international operatives were 85 percent less than in 1989, telephone calls.. By the end of 1990, urban tele• and the total losses by unprofitable enterprises phone subscribers reached 5.2 million, up 22 rose by 45.5 percent.' The turnover time for percent. Programme-controlled telephones ac• circulating funds was prolonged. counted for 43.5 percent of the total urban The market for the means of production rev• telephone capacity. ersed its trend of dechne in September of 1990. The total sales of means of production by ma• terial supply and marketing departments were V. Domestic Trade, Supply and 238.2 billion yuan, up 1.7 percent over 1989, of Marketing of IVIateriais which the rise in the fourth quarter of 1990 was 21.8 percent. Volume of rolled steel sold was Domestic market sales recovered gradually in 34.97 million tons, up 3.8 percent; coal 260 1990 and steadily developed. The total value of million tons, up 3.5 percent; timber 19.78 mil• retail sales was 825.5 billion yuan, up 1.9 per• lion cubic metres, down 10.2 percent; cement cent over 1989. The retail sales of consumer 27.56 million tons, down 10.7 percent; motor goods were 722 billion yuan, up 1.9 percent, of which 72.3 billion yuan worth of commodities vehicles 556,000, up 0.4 percent; and machinery were sold to institutions, up 4.3 percent. The and electric equipment 50.4 billion yuan, up 4.6 retail sales of the means of agricultural produc• percent. tion were 103.5 billion yuan, up 1.7 percent. The general level of market prices continued Analyzed according to urban and rural mar• to rise in 1990, though the margin of rise be• kets, the retail sales in cities rose by 6 percent came notably smaller. The general retail price for the whole year, with the growth rate ap• level for the whole year indicated a 2.1 percent proaching the level for a normal year of 13.4 rise over 1989, much lower than the 17.8 percent percent in the last quarter of 1990. On the other price increase of the year before. Retail prices at hand, sales on the rural market at and below the market in 1990 were characterized by the county level showed no sign of rising until Oc• following: 1) retail prices for most food items tober, with the annual sales dropping by 2.4 maintained stable; 2) prices for farm and side• percent. line products at free markets continued to go In terms of different category of commodities, down; and 3) prices for certain goods and ser• the sales of food items were stable, and the vice items were adjusted in most areas during volume of sales of edible vegetable oil, sugar, the last quarter of 1990 with the rate of increase pork and aquatic products rose as compared was fairly big in some large or medium-sized with the previous year. Among items of clothing cities. and items for household use, the sales of colour General costs of living of urban and rural TV sets rose by 39.9 percent and that of electric residents rose by 3.1 percent over 1989.

V DOCUMENTS

The changes in prices of commodities and services were as tracted by China with foreign countries totalled follows: US$2.5 billion, up 13 percent, and the accom• Price increase Urban increase plished operation revenue reached US$1.7 bil• in 1990 over in Dec. lion, up 0.8 percent. over International tourism began a gradual recov• 1989 (%) Dec. of ery. China received 27.46 million international 1989(%) tourists for sightseeing, visits or other activities, 12.1 percent more than the previous year. For• Food 0.3 1.8 eign exchange income from tourism was Grain -4.8 -6.3 US$2.22 billion, up 19.2 percent. Meat, poultry and eggs -2.1 -3.1 Of which: Pork -4.0 -4.3 Fresh vegetables -0.4 13.9 Aquatic products -0.7 5.7 VII. Science and Technology Tobacco, alcohol and tea 0.9 1.6 New successes were scored in science and Pastry and cakes 7.8 9.8 technology. In 1990, China gained 2,914 nation• Clothing 7.1 6.3 al scientific and technical results. The state ap• Articles for daily use 1.9 1.4 Medicine and medical proved 59 natural science prizes, 224 invention goods 2.4 1.7 prizes and 505 prizes for progress in science and Fuels 8.2 32.0 technology. Means of agricultural Various scientific and technical programmes production 5.5 initiated by the state continued progress Services ' 20.9 11.6 smoothly with notable results. Over 90 percent of the tasks embodied in the key state scientif• ic and technical contracts during the Seventh Five-Year Plan period were fulfilled, includ• ing some major breakthroughs, such as high- resolution seismic prospecting technology and VI. Foreign Economic batch production of 300,000-kw power generat• Relations—Trade and Tourism ing sets. Another 11 state key laboratories were China had a foreign trade surplus in 1990. accepted and opened to scientists at home and Customs statistics showed that the import and abroad. export of merchandise totalled US$115.41 bil• In 1990, the National Natural Science Foun• lion, an increase of 3.3 percent over 1989. The dation approved a total of 135 million yuan to value of exports were US$62.06 billion, up 18.1 support 3,531 scientific research projects, up 8.9 percent, and the value of import were US$53.35 percent and 11.4 percent respectively over the billion, down 9.8 percent. If import and export previous year. transactions involving no payment in foreign There were 9,156 full-time technical develop• exchange were excluded, China had a trade sur• ment institutions in large and medium industri• plus of US$13.1 billion, the first time since al enterprises in the previous year, 1,941 in• 1984. The foreign exchange reserves of China stitutions more than in 1989. Some 46,500 increased, hence strengthening its capacity for technical development projects were organized, payments to foreign countries. 11,500 projects more than in the previous year. Steady development was achieved in the util• By the end of 1990, there were 3,000 product ization of foreign capitals. In 1990, China inspection and supervision centres in China, of signed new agreements for the utilization of which 104 were state centres. A total of 853 state foreign capital worth US$12.3 billion, up 7.4 classifications of various types were formulated percent over 1989. Foreign capital actually util• or amended. Weather forecasting systems were ized during the year was US$10.1 billion, of established in over 1,000 weather stations and which US$3.4 billion was in the form of direct centres in China. There were 876 staffed seismo- foreign investment, both figures higher than graphic stations, 4,187 seismic measuring and 1989. reporting outlets and 20 regional or local There was new progress in economic and remote-measuring networks. The state approved technical co-operation with foreign countries. five national ocean environment preserves and Construction projects and labour service con• established 151 new ocean- monitoring and ob- VI DOCUMENTS servation stations. Mapping departments surv• ren was 97.9 percent, or 0.5 percentage point eyed and prepared 24,953 maps of varying higher than in 1989; and 74.6 percent of pri• scales, and 430 maps were published. mary school graduates continued their study in Rapid progress was made in patent work. Pa• secondary schools, 3.1 percentage points higher tent offices received 41,469 domestic and for• than the previous year, some 1,459 counties had eign patent applications, up 26 percent over universal primary education", 70 counties more 1989, of which applications from industrial and than the previous year. mining enterprises rose by 59.9 percent. A total Progress was made in the rectification of ad• of 22,588 patent applications were approved, up ult education. In 1990, institutions of adult 31.9 percent. higher education took in 492,000 new students, Scientific and technical personnel grew in a total student enrollment of 1,740,000, down number. By the end of 1990, China had 24.32 0.1 percent over 1989. There were 1,588,000 million professionals and technicians of various students in adult secondary specialized schools, categories, of whom 10.97 million were special• down 6.9 percent, 12.82 million students in ad• ized in the natural sciences, an increase of ult technical training schools, up 1.1 percent, 6 percent over 1989. There were 5,410 state- and 23.69 million students in adult junior secon• owned independent research and development dary schools and adult primary schools, up 15.7 (R&D) institutions and 410 scientific and percent. Remarkable achievement was made in technological information and documentation eliminating illiteracy, with 3,972,000 people be• centres above the county level in China with coming literate in 1990. 420,000 scientists and engineers. Some 780,000 By the end of 1990, there were 2,819 artistic people were engaged in scientific and technical groups, 3,000 cultural centres, 2,527 public li• activities in institutions of higher learning, of braries, 1,012 museums, 3,630 archives, 640 ra• whom 86.5 percent or 675,000 persons were dio broadcasting stations, 673 radio transmitting scientists or engineers. There were 7,600 scien• and relaying stations, 510 television stations, tific associations in industrial and mining enter• 938 television transmitting and relaying stations prises, which promoted public participation in with a capacity of over 1,000 watts, and 145,- scientific activities. 000 film-projection units throughout China. In 1990, China produced 100 feature movies and distributed 199.5 new, feature length movies. Eighteen Chinese movies were awarded prizes at VIII. Education and Culture international film festivals. National and prov• The size of general higher education was incial newspapers issued 15.87 billion copies; checked in order to improve the quality of edu• magazines, 1.91 billion copies; and books, 5.58 cation. In 1990, enrollment of new graduate billion copies. students was 30,000, up 3.9 percent over the previous year, and the total number of graduate students was 93,000, down 8.2 percent. Institu• IX. Public Health and Sports tions of higher learning took in 609,000 new undergraduate students in 1990, up 2 percent, The year 1990 saw continued development and the total number of undergraduate students of public health undertakings and further im• was 2,063,000, down 0.9 percent. provement of medical facilities. By the end of Secondary vocational and technical education 1990, there were 2,624,000 hospital beds in the steadily developed. There were 6,048,000 stu• country, up 2.2 percent over 1989; 3,898,000 dents studying in various types of secon• full-time health workers, up 2.3 percent, of dary vocational or technical schools (including whom 1,763,000 were doctors (including 1,303,- 1,332,000 students in technical workers' training 000 senior doctors of traditional Chinese and schools), accounting for 45.7 percent of the total Western medicine), up 2.6 percent; and 975,000 student enrollment of 13,220,000 at senior se• nurses, up 5.7 percent. condary school level. There was striking headway made in sports. The coverage of compulsory education pro• Last year 61 Chinese athletes won 54 champions gramme was further improved. In 1990, there in world championships or world cup contests, were 38.69 million students in junior secondary 8 athletes and 3 teams broke 14 world records schools and 122.42 million pupils in primary on 16 occasions, 34 athletes and 2 teams broke schools. The enrollment rate of school-age child• 40 Asian records on 49 occasions, and 131 ath-

VII DOCUMENTS letes and 30 teams broke 132 national records on 1990, there were 761,000 beds in social welfare 221 occasions. At the 11th Asian Games suc• institutions of various types in China, with 580,- cessfully hosted by China in 1990, Chinese' ath• 000 clients. Some 44.81 million people in need letes spared no efforts and wallked away with received relief aid from the state. A social secur• 183 gold medals. The Asian Games stimulated ity system was established in 25.1 percent of the mass participation in sport events. By the rural townships. In 1990, there was a rapid end of 1990, some 259 counties were chosen as development of urban community service net• advanced counties in sports, and 74.78 million work, with 88,000 community service facilities youths in the country reached the National established. Standards for Physical Exercises. In the pre• Progress was made in insurance services. The vious year, 21.88 million athletes participated in premium for property insurance of various 70,381 sports meets above the county level. kinds in 1990 totalled 2,574.9 billion yuan, up 12 percent over 1989. Some 540,000 enterprises participated in enterprise property insurance, 90.89 million households participated in house• X. Standard of living hold property insurance and 217.36 million per• The consumption demand of residents picked sons in life insurance programmes. The insur• up. Data from sample surveys showed that the ance companies took 2.78 million claims for per-capita cash income of urban residents that property losses and paid out 8.11 billion yuan. could be used for living expenses was 1,387 Another 2.6 billion yuan were paid to 9.25 mil• yuan, up 10 percent over the previous year, or lion persons for life insurance. a real growth of 8.6 percent if increases in prices were excluded. The per-capita net income of farmers was 630 yuan, up 4.7 percent, or a real growth of 1.8 percent if increases of commodity Xi. Population prices were excluded. However, economic devel• In 1990, the birth rate for China was 21.06 per opment in different areas was unbalanced, and thousand, and the death rate was 6.67 per thou• the actual income of some households declined. sand, resulting in a natural growth rate of 14.39 Employment kept increasing in urban areas. per thousand. The total population was 1,143.33 Some 4 million people were given jobs in cities million by the ehd of 1990, or 16.29 million and towns in 1990. By the end of the year, staff more than at the end of 1989. and workers in China numbered 139.89 million, or 2.47 million persons more than at the end of 1989. Of this total, the number of workers em• ployed on a contract basis by state-owned units was 13.52 million, or 1.62 million persons more than the previous year. There were 7 million individual workers in urban areas, 500,000 per• sons more than that at the end of 1989. The total wage bill for staff and workers in 1990 was 296 billion yuan, up 13 percent; the Notes: 1) All figures in this communique are preliminary, per-capita wage of urban employees was 2,150 it does not include data for Taiwan Province. yuan, a real increase of 9.7 percent if price hikes 2) Values of gross output quoted in the communique are were excluded. at current prices, whereas growth rates are at comparable Savings deposits scored large gains in both prices. 3) Base year (mainly 1989) figures are from the official urban and rural areas. By the end of 1990, the statistics of the Statistical Yearbook of China except for value of savings deposits by residents totalled population figures at the end of 1989, which were adjusted 703.4 billion yuan, 188.7 billion yuan or 36.7 according to 1990 population census data, and the figures percent more than at the end of 1989. for investment, which were adjusted according to new sta• tistics for commercial housing apartments. Urban and rural living conditions further im• 4) The figure of per-capita net income of 630 yuan for proved. A total of 180 million square metres of farmers was obtained with their own-consumed products new buildings was completed in urban areas and calculated at state prices, and were thus comparable with figures for previous years. If the own consumption of such 660 million square metres of new houses were products are calculated at contract/state-purchase mixed built in rural areas in 1990. average prices, the per-capita net income of farmers will be Social welfare work continued to develop. In 683 yuan. •

VIII CHINA

new technological development that, in addition to export- tion under the State Adminis• areas for attracting foreign in• oriented and technically adv• tration of Taxation, pointed out vestment. At the same time, anced enterprises which pay in• that the central government has China has promulgated a series come taxes according to the state a final say on tax collection from of preferential rules and regula• tax law, businessmen who invest foreign-funded enterprises. How• tions on taxes of foreign inves• in the development of energy ever, some local governments sti• tors. These rules and regulations and raw materials resources or pulated unauthorized rules and are strictly limited to certain the construction of undeveloped regulations of tax reduction and areas and industries. areas in the province shall enjoy exemption in total disregard of But some local governments income tax reduction and exemp• the seriousness of the tax laws. published even more preferential tion in accordance with the state Their actions do nothing to at• tax policies without the approval tax law in the first five years of tract foreign investment and of the central government in or• operation and enjoy a reduced advanced foreign technology but der to attract more foreign in• rate of 50 percent after approval instead cause confusion in tax vestment. Such steps were tak• beginning in the sixth year. State collection and, as a result, create en frequently between 1987 and tax law, however, stipulates that the impression in the minds of 1989 as local governments com• the income tax reduction and ex• foreign businessmen that China peted with each other for provid• emption are limited to a five- has unstable policies. Chen said ing even more preferential treat• year period. the rectification of the tax rules ments to foreign investors. Of the Moreover, some local govern• and regulations does not affect 30 provinces, municipalities and ments unauthorizedly increased the implementation of a series autonomous regions on the main• preferential treatment with re• of state preferential tax policies land, only the three municipali• gard to the reduction of and ex• but, on the contrary, helps stabil• ties of Beijing, Shanghai, Tian- emption from the industrial and ize the investment environment. jin, and Heilongjiang, Jiangsu, commercial consolidated tax and The rectification of local, Yunnan and Hainan provinces individual income tax, enlarged unauthorized tax rules and regu• and the Ningxia Hui Autonom• the scope of preferential treat• lations has progressed steadily. ous Region did not make any ment for Taiwan investment and Most areas have revised those unauthorized regulations for tax changed the tax rebate rate on rules and regulations which vio• reduction and exemption. reinvestment. Some areas also lated the state tax law. Of the 77 The State Administration of stipulated tax regulations in line unauthorized articles, 65 have Taxation examined and checked with those implemented in the been revised and corrected. local tax rules and regulations new technological development But a few local governments stipulated by 15 provinces and areas and coastal open cities. still emphasize their autonomous regions, and found Foreign businessmen were own needs and refuse to revise that 77 of their articles were confused by these locally stipu• the unauthorized articles, an of• against current state tax law. The lated tax reductions and exemp• ficial of a tax bureau said. The administration pronounced them tions. A businessman from Eu• central government will thus out of effect. Such articles had rope said that tax laws should be adopt necessary measures to deal extended the period and the unified in one country. The dif• with them. number of items for which ferent local tax policies puzzled foreign-funded enterprises could foreign investors and, in a long- enjoy preferential treatment of term view, would dampen the in• Tax Evasion reduction and exemption from terest of foreign investors. Tax evasion by foreign busi• enterprise income tax. Hunan Chen Lianbo, deputy director nessmen has occurred frequently Province, for example, stipulated of the department of tax collec• in south coastal areas which were

BEIJING REVIEW, MARCH 11-17,1991 23 CHINA

opened to the outside world ear• million. Most of its products are attempt to avoid taxes. lier than other areas of the coun• sold to a related company of A survey by the State Admin• try. An official of the State Ad• the transnational corporation in istration of Taxation on Guang• ministration of Taxation said Hong Kong which in turn prov• dong and Fujian provinces where that if the situation continues it ides 90 percent of the parts it tax evasion is a serious prob• will cause problems for those needs. The Shenzhen enterprise lem shows that many enterpris• who are honest and obey the law. was put into operation in 1983 es which listed a loss were in fact In fact, it offers an opportunity and enjoyed tax holiday in profitable. for unfair competition and al• 1984-85. After 1986, however, it In 1989, of the foreign-funded ready caused losses to state tax claimed losses for two years in a enterprises in Guangdong Prov• revenue. China therefore has list• row of up to HK$88,970. An in• ince, 35.14 percent declared loss• ed prevention of tax evasion as vestigation showed that the en• es and, in Fujian Province, the one of the main steps needed to terprise was using two price sys• percentage was 42.7. The figure strengthen administration of tax• tems. The products sold to its was still higher in certain enter• ation on foreign-funded enter• related company were 20 percent prises in Fujian Province—48 prises. to 40 percent cheaper than those percent in Quanzhou, 50 percent Tax evasion in this case re• sold to the companies with which in Sanmin and 60 percent in Pu- fers to those international cor• it had no relations. The mana• tian. porations or their related subsidi• ger of the Shenzhen enterprise Many of these enterprises aries which avoid taxes in one frankly told investigators that avoided taxes in the same way country by transferring their the profit margin was decided by as the Shenzhen enterprise did. profits and property to another. his overseas administrators. If Take the Fulu Shoes Co. Ltd. Su Xiaolu from the State Taxa• they decided to show a profit in of Fuzhou, for example, which tion Administration said that tax the Shenzhen company, it did. went into operation in 1989. It evasion by foreign businessmen Otherwise, it suffered losses. Ob• sells its shoes to the foreign in China is mainly seen in two viously the Shenzhen enterprise's investor for US$1,725 cheaper fields. First they raise the price declaration of profits or losses than it does on the international of imported raw materials and was not an indicator of whether market. In the first year of op• equipment to increase the prod• it was operated efficiently or not. eration, the foreign investor uction costs within the country Instead, the company did make a bought 380,000 pairs and and thus lower their listed prof• profit but reported a loss in order brought in US$650,000 from the its gained in China. Second, they to avoid taxes in China. price difference. In contrast, the sell the finished products at low As of now, China has ap• raw materials supplied to the •prices to decrease their income proved the establishment of 25,- company was 2.42 times higher within the country and lower 000 foreign-funded enterprises, than the market price. By the their profits. half of which have been put into end of the year, this enter• •An enterprise established in operation. The Chinese govern• prise still claimed a loss of Shenzhen exclusively by a trans• ment provides them with tax re• US$120,000. national corporation is one ex• duction and exemption for a Some foreign businessmen also ample of tax evasion. The en• certain period of time. Of the reduced their profit by listing terprise has more than 2,000 enterprises in operation, many higher overseas labour fees and employees and produces tape re• have declared losses. The 1989 extra service items and "cook• corders, colour TV sets, audio statistics show that 34 percent ing" their accounts according to amplifiers, motors and other of operating enterprises reported the difference between the offi• electronic goods. The annual losses of 680 million yuan. Clear• cial foreign exchange rate and sales volume reaches HK$400 ly, experts agree that there is an the market rate. The tax official

24 BEIJING REVIEW, MARCH 11-17,1991 CHINA

also discovered that some foreign being set up by the same share• sults. After a check by the tax businessmen establish branch holder, with the same operation bureau, those foreign-funded en• companies in name only and scope, methods and location; terprises in the zone which listed thus continue to enjoy tax re• —Strengthening market price lower profits for several years duction and exemption after the information and informing were found to have listed higher time for their enterprises' tax re• tax authorities which deal with profits since the introduction of duction and exemption expire. foreign-funded enterprises in a the regulations. The tax reven• Shao Minjun, director of the timely manner. ue thus increased. Enterprises Shenzhen Tax Bureau, said that In 1988, the Shenzhen Special which declared losses over sever• iax evasion by investors is com• Economic Zone published Chi• al years and did not pay any mon throughout the world but na's first local law against the tax taxes began to change their atti• that it is unusual in China be• evasion after a study of the laws tude towards taxation. In 1989, cause of the high incidence. in other countries. According to the zone collected a total of 200 As a country's rights and in• this law, foreign businessmen million yuan in tax revenue from terests suffer from tax evasion, should conclude transactions foreign-invested enterprises, a 22 most countries adopt measures to with their related companies ac• deal with the problem. The strug• cording to the principle of inde• percent increase over the year gle against tax evasion has a long pendence. If not, the Chinese tax before. history and measures to prevent bureaus may collect taxes on the The practice in the last two it have become stricter. Even the checked profits. If the enterprise years proves that the rectifi• United States, through the Inter• purchases raw materials and cation of taxation of foreign- nal Revenue Service, has includ• spare parts from its related com• funded enterprises did not ham• ed many articles to control tax pany at a price higher than the per foreign investment in China. evasion in its domestic tax code. market price or sells its products In 1989, China approved the es• The tax official pointed out to its related company at a price tablishment of 5,779 foreign- that tax evasion by foreign busi• lower than the market price, the funded enterprises and another nessmen not only encroaches on tax bureau will check its profits 6,254 in the first 11 months of China's rights and interests and and collect tax based on the prof• 1990. In 1989, Shenzhen still also runs against the internation• its it makes when it purchases signed 711 contracts with busi• al principle of equal taxation. raw materials and sells its prod• nessmen from 15 countries and Tax evasion thus requires the ucts at market price. regions, 24 percent more than most stringent measures. Chinese The publication of this law re• the previous year. Of this invest• tax authorities have adopted and ceived great attention abroad. A ment, US$458 million of foreign will continue to adopt a series of well-known accountants firm in investment was put to use, a 3.1 measures to effectively deal with Hong Kong issued a memoran• percent increase over 1988. Also, tax evasion. These measures in• dum to its clients in the main• 80 foreign-funded enterprises clude: land. It said the law is temporar• were established in 1989, equal —Including in a contract the ily carried out in the Shenzhen to the total in the three years price for purchasing raw materi• Special Economic Zone but is ap• before 1989. In the first six als and selling products and plicable throughout the country make them the basis for account• and will be implemented in other months of last year, the foreign ing checks; areas sooner or later. The office investment continued to increase —Strengthening examination required that its clients be pre• as a total of 338 foreign-funded and approval of new foreign- pared to follow the regulations. enterprises registered their esta• invested enterprises and prohi• The measures against tax eva• blishment, 18 percent more than biting new enterprises from sion in Shenzhen won good re• in the same period of 1989. •

BEIJING KEVIEW, MAKCH 11-17,1991 25 CHINA

Two decades of family planning efforts have reduced births by nearly 200 million in China, a reduction equal to the total population of the United States. Today, as China faces another baby boom, the government will persist in its national policy and try to lessen any surge in population growth.

Family Planning: the Way Out by Our Staff Reporter Cheng Gang

eng Peiyun, minister of Troubles and Worries on the nation's economic devel• the State Family Planning opment. She knows that it will be P Commission, is one of only At a national conference on more difficult to reduce the po• a few women ministers in China. family planning held by the end pulation growth by 100 million She is fond of tennis but has had of last year, Peng met Chen Yao- than to increase grain produc• to cut down her playing time be• bang, vice-minister of agricul• tion by 100 million tons because cause of her busy schedule. ture, and congratulated him on China is in the middle of its third The fourth national census, the 1990 bumper grain harvest of baby boom which began in 1986 taken on July 1, 1990, the last 420 million tons. Chen, howev• and will last until the end of the er, responded with a sobering re• century. year of the Seventh Five-Year mark, "If the present average an• Estimates indicate that 322 Plan for Economic and Social nual level of 400 kg per capita in million women will reach child- Development (1986-90), shows grain consumption remains un• bearing age (15-49 years old) ev• that the population in China's changed, by the year 2000 grain ery year during the Eighth Five- mainland is 1,133,682,501. The output should exceed 520 million Year Plan period (1991-95) and, figure indicates that the nation tons. This target will be difficult of these people, 121 million will had 20 million more people than to reach, however, and we are be 20-29 years old. They repre• was expected during the Seventh not overly optimistic." sent an 8.2 percent and 16.4 per• Five-Year Plan period. China Peng, who became China's top cent increase over the number of has set the goal of keeping the family planner in 1988, under• people in this age group during population within the 1.2 billion stands quite well the impact the previous five-year plan per• mark by the turn of the centu• which a large population, one iod. ry, but if the natural population which is twice that of the United Family planning is more diffi• growth rate in 1990 remains un• States and the Soviet Union and cult in rural areas because there changed, the target will have Japan's and one for which the is a larger gap between the farm• been exceeded no later than annual increase is equivalent to ers' family planning views and 1995. the Australian population, has government family planning pol-

26 BEIJING REVIEW, MABCH 11-17,1991 CHINA icy. It is still common for many couples to have a second or third child. Also, many farmers prefer to get married and have babies earlier than their counterparts in cities. One out of ten mothers with newborns is under 20. Giv• en such a situation, Peng knows her job is tough.

Appraisal Peng's concern does not mean China is making no progress in family planning. Manfred Kulesa of Germany, a UN official stationed in China, is very satisfied with China's pro• gress in its family planning pro• gramme. He said that China's family planning was one of the most successful examples in the Street posters in Shanghai explain the importance of family planning, WANG ZIJIN world and he attributed the 20 the State Family Planning Com• growth rate decreased from 17.1 percent thousand decrease in the mission show the great progress per thousand to 13.21 per thou• world population growth rate to China has made. sand (14.7 per thousand in 1989 China's family planning work. In comparison with the 1970s, compared with 25.83 per thou• His praise does not go far en• the average birthrate in the sand in 1970). The average births ough. Although China is con• 1980s dropped from 24.16 per per woman dropped from 4.01 to fronting a grim population situa• thousand to 19.73 per thousand 2.42. The average age for first tion, the country's achievements (the figure was 20.98 per thou• marriage of women rose from of the last two decades are re• sand in 1989 against 33.59 per 21.8 years old to 22.36 years old. markable. Statistics released by thousand in 1970). The natural The percentage of women of the child-bearing ages who use con• traceptives rose from about 50 A children's painting show held by family planners in Chengduo. percent to 80 percent. The first births to the newborns increased to 51.9 percent in 1989 from 20 percent in 1970 while the num• ber of third or more births de• creased to 18 percent from 62.2 percent. Even after the third baby boom began in 1986, the number of births per woman has contin• ued to drop. In 1989, the number of women of child-bearing age rose by 24.4 percent compared with 1981 and that of high child- bearing ages by 34.7 percent. Despite this, the birthrate in 1989 increased by only 12.5 per• cent over 1981. Peng Peiyun has noted that if the 1970 birthrate had stayed the same, the population in the mainland would now be 1.3 bil• lion. A total of 200 million less

BEIJING REVIEW, MASCH 11-17,1991 27 CHINA people were born in the last two fespan increased from 35 years untarily. Without the widely decades and that saved the na• old before the founding of New publicized family planning poli• tion a lot of child-care money, an China in 1949 to 69.05 years old cy and the use of contraceptives, amount equal to 2.15 times the in 1987. she noted, there would have been 1988 gross national product many more abortions in China. when calculated on the 1986 con• Stable Current Policy Some people worry that China, sumption level. faced with such a rigorous po• In addition, the country's av• Peng hopes to maintain and pulation situation, will adopt a expand on the good results stricter family planning policy. erage death rate dropped from achieved so far. She believes that Shen Guoxiang, a spokesman 14.77 per thousand in the 1950s so long as the current population from the State Family Planning to, 6.28 per thousand in 1990 policy is resolutely implemented Commission, said that facts indi• and the infant mortality rate de• and the ranks of population man• cate the current population poli• creased from 107.64 per thou• agement personnel, family plan• cy is effective. The governments sand in the 1950s to 38.28 per ning service workers and the peo• at various levels should imple• thousand in 1988. Individual li- ple who practise family planning ment the policy strictly but no on a voluntary basis continue more severe methods will be to grow, the average number of adopted. Any changes in work births per woman may drop to methods should be in the provi• two children and the population sion of better services for the fu• growth rate be reduced to the ture, emphasized the spokesman replacement level by the turn of of the State Family Planning this century. Commission. The current population pol• A 30-year-old woman living in icy is to control the population a village with poor communica• growth, improve the quality of tion facilities near the Three population, ensure the prod• Gorges on the Yangtze River uction of healthy children and complained about how hard it improve their upbringing. A cou• was to obtain contraceptives. Al• ple is generally encouraged to though married government have only one child while, in functionaries and enterprise em• sgme rural areas, couples can ployees get contraceptives free have the second child several from a nationwide contraceptive years after their first birth if distribution network manned by their first child is a girl or dis• 1 million workers at the grass• abled. roots levels, some people in re• To implement this policy, mote areas still find it difficult to there will continue to be an em• get contraception devices. To re• phasis on education and publici• medy this, the State Family ty, the use of contraceptives and Planning Commission is in con• regular systematic work. Given tinuous contact with family the fact that in the last few years, planning departments in various since China has had some 10 mil• places to ensure that all kinds of lion induced abortions a year, contraceptives for the women of some people believed China was child-bearing age are available relying on abortion to control its and instructions are given for population growth. This is not their safe and scientific use. the case however, as statistics In some places the people who show that 75 percent of married have induced abortions, sterili• women of child-bearing age zation operations and medical are using contraceptives. Fami• treatment resulting from misuse ly planning publicity is every• of contraceptive devices can re• where—on the streets, TV pro• WANG ZIJIN ceive the assistance of family A motor co-ordination test is given by a grammes, opera scenes and planning workers and other vol• doctor of the Paediatrics Hospital affi• songs. China's abortion rate is unteers for their house and farm- liated to the Shanghai Medical Univers• average, Peng said, and the ma• work. ity. jority of abortions are done vol• The State Family Planning

BEIJING REVIEW, MARCH 11-17,1991 CHINA Commission has also helped to explain the connection between an improved standard of living and family planning. The house• holds which limit their family size enjoy some priority in re• ceiving economic aid, loans, technical instructions and em• ployment. The family planning workers also show much consideration for the elderly and take it as one of their main jobs to change such traditional ideas as "more sons more happiness."

Sichuan Experience In the same way as China in• fluences the world population ^1 growth, the nation's big prov• The 37,000 babies born each day In China pose a dilemma for the country. inces greatly affect the nation's WANG CHENGXUAN total population. Of the 30 prov• an is two. These are a major Family Planning of Sichuan inces, municipalities and auton• achievement for Sichuan, a prov• Province at the provincial peo• omous regions in the mainland, ince with a big and youthful po• ple's congress in 1988 and the nine have a population exceeding pulation base. When calculated more than 2,000 stations serving 50 million and the situation in on the growth rate in the 1970s, couples of child-bearing age have five out of them is grim. The the province has had 20 million played major roles in bringing family planning work in Sichuan less people in the last two de• down the province's population Province, China's largest, how• cades. Zhong Kan, head of the growth rate. ever, is satisfactory. The fourth Sichuan Provincial Family Plan• Of the 30 provinces, munici• census shows that the province's ning Commission, said that in palities and autonomous regions population exceeds 100 million, addition to the wide publicity in the mainland, 26 have formu• but its natural population growth given to education about popula• lated their own rules and regu• rate is only 10.72 per thousand tion science and sex, the pro• lations for family planning. Si• and the average births per worn- mulgation of the Regulations on chuan Province was the earliest and did a lot of popularization work in the last three years. The A family planning poster on a Beijing street. BAl LIANSUO regulations have been publicized in every village and neighbour• hood. Posters to explain the regu• lations are everywhere and slide shows on the regulations are shown before opera perform• ances and film shows. Zhong said that people have taken the regu• lations as part of the law be• cause they are strict but reason• able. Although different areas have different provisions, the re• gulations stipulate that a couple in the densely populated areas is allowed to have only one child but those in the labour-intensive mountainous areas where prod• uctivity is low can have two children. Minority couples in the

BEIJING REVIEW, ^fARCM 11-17, 1991 CHINA province are allowed to have killed in a few minutes by abor• liberation days, a low death rate three children.. The regulations tion operations in Tibet. Cering and a high natural growth rate. thus conform to reality and are Zholma, a woman official of the Although family planning pol• accepted by the majority of the Public Health Bureau of the Ti• icy is implemented in Tibet, public, Zhong said. bet Autonomous Region, said, there are different rules for Han The work of family planning "Facts disprove this claim. and Tibetan people. The rules service stations is to deliver con• Maybe the American tourists are pertaining to Han people in the traceptives, give instructions on mistaken in their memory or region are the same as those their use, provide consulting ser• they have their own reasons for found in other parts of the coun• vices on birth control and give saying this." try while those followed by Tibe• pre-marital sex education. These The results of the fourth cen• tans are more relaxed. stations also have provided abor• sus tend to corroborate Cering The Tibetan couples in the tions and sterilization operations Zholma. Tibet has a population farm and pastoral areas can have and dealt with the aftereffects of of 2.196 million. Of this, 2.0963 as many children as they like. operations and infertility. Abor• million are Tibetans who ac• tions are done voluntarily with count for 95.46 percent of the But reality and family planning the majority within the first 42 total. In 1951, the year before the publicity for several years have days of pregnancy. Abortions on peaceful liberation of Tibet, the made the local people aware that women who are 4-5 months or figure was less than 1 million. In too many children will lower more pregnant are not encour• the country as a whole, the an• their quality of life. Therefore, aged. Some abortions on women nual natural growth rate of Tibe• most people are voluntarily ster• in the later stages of pregnancies tans in 1989-90 was 18.57 per ilized in the hospital after they do occur in remote areas because thousand, higher than the rate of have three or four children. family planning work is not good 10.8 per thousand of the Han Some villages have included but abortions of fetuses older people. birth control as part of their local than five months have been eli• The increase of Tibet's popula• rules. The rules of a village in the minated. tion is attributed to the devel• Nedong County, for example, sti• Zhong did not deny that there oped economy and improved pulate that the village govern• is a fee levied on couples who medical conditions in the region. ment will cover the communi• have more children than allowed Cering Zholma said that Tibet cation fee for women having by the regulations. Such local had a high birthrate, high death a sterilization operation in the rules have played a certain role rate and low natural growth rate hospital after they have their in birth control. Although some before its peaceful liberation. At third child and provide subsidy foreign friends do not under• that time, the region had only for a three-month holiday. stand the reasons behind this, it one hospital providing services to In the past, there was no dif• is done because of public re• the upper class people. Rampant ference in family planning policy quests. Children born outside of infectious diseases threatened between Tibetan urban residents, the life of the local people and the plan cause trouble for society farmers and herdsmen. In 1985, caused a high death rate in the and it is reasonable that their however, many local leaders said parents shoulder part of the cost region whose average life expec• it was the duty of all Chinese for bearing children. tancy was only 35 years old. A people, including Tibetans, to When infanticide of girl ba• woman gave birth to 18 child• ren before the peaceful libera• implement the family planning bies occurred in Sichuan prov• policy. Since then, the Tibet Au• ince, the criminal action was im• tion but only four survived. To• tonomous Region began to en• mediately dealt with in strong day, the region has more than courage urban couples to have measures by the government, 1,000 public health institutions, Zhong said. Now the sex ratio of hospitals, epidemic prevention two children each or three at the children born in the province is stations and maternity and child most should the health of the normal, 100 for female and 104 care centres. These organizations second be poor. for male. form a vast network and employ Cering Zholma said that it was 10,000 workers (including 6,200 easier to publicize the family minority workers). Infectious di• planning policy among Tibetan Population in Tibet seases have been brought under people because it is not so impor• An American tourist group control and the lifespan has ex• tant to Tibetans whether their claimed after its visit to Tibet tended to 65 years old. Now, child is a girl or a boy and they from Garze through Qinghai sev• the population has a birthrate as do not believe that to be happy eral years ago that a baby was high as that found in pre- one needs many children. •

30 BEIJING REVJEy, MARCH 11-17,1991 CHINA

PEOPLE Deputy Mayor Has a French Mother by Our Special Correspondent Luo Xiaolu The daughter of Chinese and French parents and a non-Communist, He Luli is a leader of the Beijing municipal people's government who won the trust of the public the hard way.

t present, two of the six planting project and taking the deputy mayors of Beijing, time to check the environmental China's capital with a po• sanitation on her own. The road Apulation of 12 million, are wom• was cleaned up within a year. To• en. He Luli is responsible for day, it is clean, tidy and lined public health, epidemic preven• with trees and flowers. Her cap• tion, social welfare, family plan• ability and her down-to-earth ning, culture and art, and matters work style quickly won her the concerning overseas Chinese, na• support of Xicheng District's tionalities and religion in the 800,000 citizens. city. At the election of the Beijing He Luli is the only high- municipal people's congress of ranking Chinese official of for• new leaders for the municipal eign lineage. Medium in height, government, the deputies to the she has inherited the white skin, people's congress from Xicheng curly hair and large eyes from District introduced He to the de• her European mother. She has puties from other districts. They SHI LI won the trust and respect of Bei• pointed out that she was a good He Luli at a civil affairs worlt confer• jing citizens not because of her leader, steadfast in her work and ence in 1991. unique family history but be• concerned herself in public af• cause of her own remarkable fairs. In early 1988 she was elect• percent and over 60 percent res• achievements since she assumed ed one of six deputy mayors from pectively from the rate three and the office of Beijing deputy may• among ten candidates at the com• five years prior to her assuming or three years ago. petitive election. office. A Woman of Action. In 1986, after The first day He became depu• After He Luli took charge of serving as a paediatrician for 27 ty mayor of Beijing, she pledged the affairs of overseas Chinese, years, He Luli was elected depu• to improve public health by her first step was to appoint a ty head of the Xicheng District. bringing health care within the highly capable returned overseas During her two-year tenure, she reach of every citizen. During the Chinese person to head the office helped resolve problems which past three years, she has never for overseas Chinese and encour• had been left unresolved for neglected in the slightest her age overseas Chinese and Hong many years. One, the thorny Kong and Macao compatriots problem of cleaning up" the 11.6- public health and epidemic prev• km Western Second Ring Road, ention work. After she took off• and their relatives at home to required the relocation of 513 ice, she urged the government to help promote the city's friend• families, the rebuilding of many increase appropriations for di• ship, co-operation and exchange dump sites and the planting of sease prevention and personally with the outside world. The off• trees on many streets. After she went to hotels, restaurants, gov• ice from that point onward took the office, she immediately ernment organizations and facto• quickly developed. The staff of devoted herself to the work, per• ries to check hygienic conditions the office does its best to help suading residents to relocate, par• in canteens. In her third year in returned overseas Chinese and ticipating in the planning for tree office, the city's incidence of ep• relatives of Chinese residing idemic diseases dropped by 40 abroad to solve their problems

BEIJING REVIEW, MARfcH 11-17,1991 31 CHINA

ZHENG SHUf U SHI LI left: He Luli (right) with kindergarten children; Right: He Lull (second left) delivers a speech at the meeting to mark Overseas Chinese and Hong Kong, Macao and Taiwan Compatriots Day during the Beijing Daxing County Watermelon Festival in 1990. and by doing so has won much Father Is a Doctor. He Luli has a her husband and children. trust and respect. They have at• legendary family history. During World War II, her only tracted more overseas Chinese Her father, He Siyuan, studied brother was killed in the front and Hong Kong and Macao com• at Paris University in his youth. while defending his own country. patriots to concern themselves After China's democratic revolu• In China, as the wife of an anti- with Beijing's development. Dur• tion broke out, he returned Japanese figure, she had to flee to ing the 11th Asian Games last to Guangzhou and joined the the inland area where life was year, for example, more than 400 Northern Expeditionary Army, extremely hard. Since she still overseas Chinese and foreign na• serving as deputy head of the held a French passport, many of tionals of Chinese descent visited army's political department. He her friends encouraged her to Beijing to sec the games and in• Luli was born in Shandong when take her children to the United creasing numbers are now seek• her father served there as the States but she stayed in China. ing economic opportunities in the head of the education depart• She did not want to leave her capital city. Many returned over• ment of the provincial people's husband and she didn't want her seas Chinese and family members government. He later became children to live in a foreign of the Chinese residing abroad mayor of Beiping (Beijing). On country. To the surprise of her are also actively participating in the eve of China's nationwide lib• friends, she decided lo give up the work of governments at dif• eration. He, willing to co-operate her French nationality and be• ferent levels. with the Communist Party, parti• come a Chinese citizen. He Luli is known for her frien• cipated in the liaison work for Life was also difficult during dliness, sincerity and honesty. the peaceful liberation of Beijing. the "cultural revolution" when She often pops into citizens' For this, the Kuomintang special her house was searched three homes in the small lanes typical agents planted a bomb in an at• times. Thanks to the concern of of Beijing and has a chat about tempt to kill him. In the explo• Premier Zhou Enlai, however, their problems and concerns. sion, He Lull's arm was hurt her family was protected and She frequently visits department while her only sister was killed. spared further persecution. stores, food stores and groceries He Lull's mother, Yeuonne Yeuonne was a kind mother. in downtown areas to help with James, a girl from Bordeaux with When her children were young, their work. On the eve of Spring dark brown hair and eyes, fell in she told them a story every Festival (China's New Year), she love with He Siyuan when she day after supper. Although she rushed around the city visiting was also studying at Paris Univ• taught them French (they all workers, farmers, doctors, nurses ersity. In 1928, a year before she spoke French), she herself could and the self-employed to bring was to graduate from the univers• understand Chinese but never them New Year greetings. On Fe• ity, she travelled all the way to speak it. bruary 10 (a Sunday), she trav• China and married He Siyuan in In late 1976, Yeuonne contract• elled to mountainous Yanqing Shanghai. Despite the fact that ed hemiplegia and she died in County in the northwest tip her life in China was difficult, 1978. She remained a Christian of Beijing to visit her country she never returned to her own during her 50 year stay in China, friends. country because she loved China, never regretting,the life she had

32 BEIJING REVIEW.'JMAHCH 11-17, 1991 CHINA chosen for herself and the road she had travelled. Women Today: A Force to Be Reckoned With None of He Siyuan's offspring ever thought they would inherit their father's profession and be• rr^oday, China has more than cadres at the top decision• come mayor of Beijing. One of I 51 million female workers, making stratum of the Party and Hu LuU's brothers teaches tradi• some 37 percent of the to• government. tional Chinese painting at a univ• tal workforce. In the light in• In recent years, remarkable ersity in Sichuan Province while dustry and service trades, wom• achievements have been scored the other two are senior electrical en make up 47.1 percent of the in work by the women federa• machinery engineers in Beijing. total payroll, and in joint ven• tions to eliminate illiteracy. In Varied Pursuits. He Lull first tures and foreign-financed enter• 1990, China saw the best results came to Beijing when her father prises and institutions, they ac• became the mayor of the city. To in its hteracy drive since 1981. count for more than 50 percent help her better understand life, The elimination of illiteracy of the workers and staff. her father sent her to a girl's among women is important be• school where most of the stu• Of the nation's scientists and cause women make up over 70 dents were children from com• technicians, one-third are wom• percent of the country's 180 mil• mon families. In 1952, He Lull en and more than 10 percent lion illiterate people. The major• graduated from the school and of them hold professional titles ity of the new-born illiterates (2 enrolled in the Beijing Medical such as professor, associate pro• million a year) are girls and of College. After graduation, she be• fessor and senior engineer. There the country's 2.73 million child• came a paediatrician at the Bei• are 17,087 professors engaged in ren unable to go to school in jing Children's Hospital and later teaching in China's institutions 1988, 83 percent were girls. Since at the Beijing No. 2 Hospital. of higher education and in re• the founding of the People's Re• He Lull is a lively and cheerful search establishments and 1,570, public, China has educated person. She liked to hike, moun• or 9.2 percent of all professors, 155.52 million people, 70 percent taineer and swim when she was a are women. Some 811 women, or of whom were women. By 1989, student in the medical college. In 52 percent of all female profes• 344,000 women had received ad• her younger days, although she sors, work in the medical field, ult education training in China but very few are in law. In 1989, always felt challenged by her and 12.70 million women were family background and foreign of the country's 445 state inven• educated in correspondence in• lineage, she never felt discour• tion prize winners, 68 were stitutions of higher learning. Of aged and could always find some• women. thing to cheer herself up. the nation's women employees, Today, China has more than 6.92 percent received a college or In college, she fell in love with 8.7 million women cadres and higher education. a schoolmate, Rong Guohuang, those who work in women's fed• and later married him. Their two erations can be found across the So far there are 37 newspapers sons have inherited their grand• country. By the end of 1988, a and magazines, including six for mother's dark brown eyes, curly total of 98,589 full-time female children, run by China's wom• hair and white skin. cadres worked with women's fed• en federation departments. The He Lull loves her mother and erations. At present, more than country has 19 colleges and univ• has cherished a deep affection for 35,000 women work committees ersities and vocational universi• her mother's country. In 1981, as have been established in Party ties for women cadres. All these a member of the China Medical and government organizations, establishments provide impor• Delegation, she went to France to and in education, scientific, cul• tant information on women to participate in an exchange pro• society and on society to women, gramme with her French col• tural and public health depart• and offer the best conditions for leagues. She also visited the univ• ments. Despite this, the propor• ersity where her parents studied. tion of female leading cadres is training women cadres. still small in China. According In 1990, China's women's fed• She speaks fluent French and to 1989 statistics, of the nation's erations cited 211 "March 8" (In• English and likes reading French cadres at and above the county ternational Women's Day) pace classics during her free time. Bal• (division) level, only 7.99 per• setters, including 93 women ath• zac's novel Song of the Valley is cent were women cadres; women letes who distinguished them• her favourite. She also loves mu• cadres accounted for 6.18 per• selves at the lllh Asian Games. sic, particularly the works of cent of the cadres at the pre- In addition, a number of "March Strauss. She and all the members fectural and bureau levels; and 8" outstanding collectives were of her family like.French food. • there were basically no women praised in 1990. •

BEIJING REVIEW, MAKCH 11>17, 1991 33 FROM THE CHINESE PRESS goods, prices should be allowed China will primarily be devoted China Deepens to float freely. to border trade. Commercial Reform (January 10, 1991) (Nov. 26, 1990) SHANGHAI SHANGBAO (Shanghai Commercial Daily) Strategies Drawn for Shanghai Conducts n a discussion about how Three Open Areas First Sex Survey best to deepen commercial XINXI RIBAO I reform, Tian Jiyun, vice- (Information Daily) LIAOWANG premier of the State Council, (Outlook Weekly, Overseas Edition) recently made the following uring the Eighth Five- Year Plan period eginning in early 1989 points: through the end of May Presently, control over state- D (1991-95), China will gradually implement strategies B 1990, China's first investi• owned stores is tight, that over especially for the coastal areas, gation on sexual education was collectively owned stores is Changjiang (Yangtze) River conducted by the Sexual Sociol• loose, while private stores are valley and border areas. ogy Research Centre of Shang• unregulated. This is a result of • The coastal areas. Current hai in co-ordination with 530 a hand-off policy and the fact strategies that have been im• people from various parts of the that workers in state-owned plemented during the past ten country. stores do not go out of their way years in the coastal areas. Involving 15 provinces, mun• to develop businesses. There• • The Changjiang River val• icipalities, autonomous regions fore, a policy of preferential ley. An economic corridor is and 24 other smaller areas, the treatment should be introduced forming along either side of the investigation covered such ques• in order to stimulate initia• Changjiang River, the longest tions as puberty, sexual know• tive of workers in state-owned in China. Thus far, six impor• ledge, people's concepts about stores. The problems in the tant areas in the valley have sex, the relationship between commercial departments, he been designated for expanded couples, family planning, and said, should be solved by a re• development. They are the sexual crimes. The 23,000 peo• form of the existing situation. Wujiang River hydropower sta• ple +hat participated in the sam• State-owned commercial de• tion on the upper reaches of the ple survey were middle school partments should concentrate Changjiang River and mineral and college students, couples in on wholesale business and those resource development areas on urban and rural areas, and industries which directly relate the upper reaches; the Pan Xi- those who had committed sex• to the state plan and people's Liupanshui development area; ual crimes. This type of investi• daily needs. Goods directly pur• the Chongqing-Yichang indus• gation is useful in understand• chased wholesale from factories trial and agricultural develop• ing and solving such problems should be under the control of ment area that will focus on as early puberty, sexual re• the state commercial depart• the development of hydropow• lationships between couples, ments. er; the development area on and sexual crimes. the middle reaches of the The investigation obviously Regulations should be pro• Changjiang River with Wuhan proved that China's youth are mulgated for those enterprises as the hub; border areas of maturing earlier than before. which produce and sell their Hunan, Hubei and Jiangxi Among the middle school stu• own products, because some provinces; and the Shanghai- dents surveyed, the percentage factories keep much-needed Ningbo-Hangzhou development of female to male students was goods for themselves and only area on the lower reaches. The equal. Male students experienc• sell surplus goods to commer• lower reaches of the Changjiang ing their first seminal emission cial departments. Industrial and River will be built into Chi• under the age of 14 account• agricultural as well as their na's largest economic, personnel ed for 54.2 percent of the to• side-line products should also be training and information tal surveyed. The first period of regulated. centre. female students under the age In order to revitalize retail • The border areas in Nor• of 14 accounted for 91.5 per• sales, commercial department theast China. The western Xin• cent of the total female students stores should form more busi• jiang, Yunnan, Guangxi and surveyed. Puberty in both sexes ness groups. Except for certain other portions of southern occurred 1.3-1.5 years earlier

34 BEIJING REVIEW, MARCH 11-17, 1991 FROM THE CHINESE PRESS than students living in the the Kunlun Hotel opened both 1950s. Night Life in Beijing's Japanese and Hong Kong- According to the investiga• Hotels Taiwan karaoke bars while the tion, 71.5 percent of middle karaoke bars in Heping and Tai• school students had received RENMINRIBAO wan Hotels are a major re• some form of sex education. creational site for many Hong The importance of scientific (People's Daily, Oyerseas Edition) Kong and Taiwan' travellers. sexual knowledge, ideological rrihe most fascinating places The Great Wall Sheraton Hotel and physiological education I in Beijing to visit these offered famous piano and trad• courses in middle schools has days are the city's 181 itional instrument perform• been stressed, although this may plushy hotels, which provide ances in its newly renovated differ greatly from region to re• their foreign guests from ar• atrium and recently introduced gion. Work in this area has been ound the world with de luxe musicals and dance parties in executed much better in Bei• accommodations. Many foreig• the hotel restaurant. jing, Shanghai, Chengdu, Qing- ners are used to evening enter• The night entertainment pro• dao, and some other larger ci• tainment and the night life in grammes were given boost when ties. Sex education in Shanghai the luxury hotels are geared to the hotel invited a variety of has been taught at hundreds of meet their needs. artists to play in the hotel. The schools comprising a total of Since China implemented the Qianmen Hotel invited the Bei• 82.7 percent of the student po• policy of reform and opening to jing Opera Troupe to play in its pulation. In 1987, Shanghai the outside world in 1978, the Liyuan Theatre, used captions promulgated Regulations on country's hotel business has to translate librettos and prov• Protecting Youth, which in• flourished. For many years, ided brilliant acrobatic per• cludes sex education during though, travellers complained formances. Foreign guests like adolescence. The investigation, about monotomous stays with such entertainment and, in ad• however, reflected the imbal• visits during the day and no• dition to Beijing Opera history ance in the aspects of sex educa• thing to do in the evening. and art handicrafts exhibitions, tion stressed, for example, 71.28 The situation caused staff can have them photo taken with percent emphasized education members of the tourist business stage costumes and facial mak• on puberty while only 2.88 per• to consider how to meet the eup. The Great Wall Sheraton cent on sexual morality. needs Of foreign tourists. The Hotel has co-operated with This investigation, which was upper echelons in Beijing Ad• many film studios to introduce conducted for the first time in ministration of Tourism famous Chinese movies, direc• China, touched upon couples' acknowledged that although the tors and artists in the hotel's lives and revealed some prob• accommodation for travellers cinema. Their move aroused the lems with a close relationship had improved, entertaining interest of many travellers and with society. Among the 8,000 night life had not been placed attracted many foreign students sample surveys taken in urban on the agenda. In 1988, officials and businessmen from around and rural areas, only 2-3 per• decided to put some spice into Beijing. cent of the married couples the guests' evenings, they be• The Beijing-Toronto Hotel surveyed are not satisfied with gan to show in-house movies, held an Oriental Festival, fa• their sexual lives. Upon further domestic and martial art films, shion and puppet shows, and ac• analyses, however, it was dis• American westerns, prize win• robatic performances. One Bri• covered that 6-7 percent of ning movies and documentaries. tish guest was so moved by a them were not satisfied with All hotels above three star level performance of traditional mu• their sexual lives. In urban and were then equipped with satel• sic that he treated all of the rural areas, 27-50 percent cou• lite television systems, so that artists to drinks. ples separately indicated indif• dwellers can easily keep abreast ferent attitudes towards their of international and domestic Fashion shows and exhibi• dissatisfaction. Which influence news. tions of Chinese picture and cal• couples' feelings and a stable More recently, 54 hotels esta• ligraphy, flour figurines fabri• marriage. Because of this, it is blished karaoke bars and ball• cating as well as seal cutting said, that 25-33 percent of cou• rooms offering high-quality have also been presented at the ples divorced their spouses. musical performances and gra• Yanxiang, Jianguo and Capital cious surroundings. Since guests hotels. (August 6, 1990) come from different regions. (Dec.7, 1990)

BEIJING REVIEW, MARCH ll-lYAlW 35 BUSINESS/TRADE production. The biggest of the 16 pro• Bonded Market to The regulations also stipu• jects planned for the five-year Open in Shenzhen late that enterprises dealing in period beginning in 1988 is bonded means of production the milk processing project. China's first bonded market are limited to state-owned en• The EEC will provide 20 ma• for means of production was terprises with an import and jor Chinese cities with 15,000 opened for a trial run in Shen• export power during the mar• tons of butter and 45,000 tons zhen, Guangdong Province, ket's trial run. The enterprises of milk powder, having a total early this year. Already, the must have a strong profession• value of US$100 million. The Regulations Concerning Man• al management ability and a cities are required to use the agement Over Bonded Market sound commercial reputation, butter and milk powder to for Means of Production of and can provide special bond• produce milk for the resi• the Shenzhen Special Econo• ed warehouses approved by dents. In addition, the EEC mic Zone has been approved the Customs. also provided US$5 million in by the State Council. The bonded market for fees for foreign experts who According to regulations, means of production has sim• come to China for technical bonded means of production plified formalities for import• guidance. enterprises can engage in such ing. And the Shenzhen local Having made an inspection business as machinery and government has reportedly tour on these projects, Mr. equipment, raw materials, started work on the bonded Schellerup, an official in components and spare parts, market and begun to examine charge of the EEC aid to fuel, packaging materials 23 enterprises which applied China, remarked, "The EEC used, and vehicles for produc• for permission to deal in is satisfied with the implemen• tive purposes as well as spare bonded means of production. tation of all the projects." parts for maintenance and by Yao Jianguo The 16 projects, begun in supply of the local enterprises 1985, were proposed by the as they undertake the produc• Chinese Ministry of Foreign tion and construction projects EEC-Funds China's Economic Relations and in the Shenzhen Special Eco• Agricultural Projects Trade and selected by the nomic Zone. Good progress has been EEC. The regulations also point made in 16 agricultural pro• by Kou Zhengling out that of the imported jects funded by the European means of production supplied Economic Community (EEC) Co-Manufacturing by the bonded market, raw for a total of over US$150 materials, spare parts and million. Music Instruments packaging materials used for These projects mainly in• To meet the needs of for• producing export products in clude shrimp cultivation in eign musicians, musicologists enterprises within the special sea water in Dalian, rural wat• and music lovers, the Beijing zone shall be given bond• er supply networks and ve• National Musical Instrument ed treatment. The follow• getable production in Beijing, Factory will further expand ing means of production shall water and soil conservation its contact and co-operation be exempt from tax with the projects in Sichuan Province, with foreign countries. approval of the relevant state farmland irrigation and beet Director Yu Bingru said departments. production in Gansu Prov• that his factory's co-operation —Mechanical and electrical ince, fruit production and mainly consists of the follow• equipment, building materials storage in Xian, orange culti• ing: and goods necessary for in- vation in Chongqing City and —Establish joint ventures frastructural construction in Hunan Province and cashew or co-operative enterprises for the zone; planting and rubber produc• producing traditional Chinese —Building materials, prod• tion in Hainan as well as fish musical instruments; uction equipment, fuel, ma• fodderprocessing and produc• —Process traditional terials, vehicles required in tion in the city of Tianjin and Chinese musical instruments production and scientific re• Zhejiang Province. Construc• with supplied design and ma• search and spare parts for tion of three or four of these terials; maintenance; projects is expected to be com• —Send technicians and —Agricultural means of pleted within the year. players abroad to manufac-

36 MlJING REVIEW, MARCH 11-17, 1991 BUSINESS/TRADE

ture and play traditional from exports. China had am• nomic Relations and Trade, Chinese musical instruments, ple resources of export goods foreign-funded enterprises in carry out technical exchanges in 1990 and improved its for• the city operated well and eco• and hold sale exhibitions of eign trade business. In 1989 nomic returns were remark• traditional Chinese musical and 1990 the Renminbi was able last year. instruments. devalued twice, which helped Statistics reveal that of the Yu also said that his factory boost exports to a great extent. 382 enterprises which went will provide foreign investors At the same time China had into operation in 1990, the to• and co-operating parties with strengthened its control on tal output value reached 5.125 preferential treatment and foreign exchange earned from billion yuan, shooting up 42 tourism and other non-trade other conveniences. percent over the previous industries. The factory is a well- year; sales income was 5.823 established maker of tradi• Last year registered no in• billion yuan, a 45.3 percent tional musical instruments crease in foreign exchange ex• hike over 1989; and the total with a modern production penditure for imports due to amount of profits earned was line. Apart from its research economic rectification and re• 574 million yuan and US$103 sultant reduction in market institutes, it also has more million, a jump of 67.4 per• demand. Western economic than ten famous Chinese mu• cent over the previous year. sanctions played a role, too, sicians as advisors and consul• Apart from a few ventures tants. At present, it prod• by making it difficult for China to buy high technology. which were in the red, most uces bowed, plucking, strik• were profitable and had a sur• ing, pipe and beating musical In the second half of last year, China adopted measures plus after their foreign ex• instruments in addition to in• change was balanced. struments used by Chinese to stimulate the domestic mar• The Beijing Jeep Co. Ltd., a minority nationalities. Alto• ket and control imports on an Sino-US joint venture, earned gether there are over 500 spe• appropriate scale. This forced 138 million yuan in profit last cifications and over more than the Western economic restric• 130 types of instruments. It tion to loose and brought an year. Its sales shot up to 1.538 has exported instruments to upturn in China's imports. billion yuan. The 1990 output nearly 70 countries and re• This year, China will still value for the Beijing Matsush• gions worldwide. emphasize imports of things ita Electrical Appliances Co., which will facilitate technical a Sino-Japanese joint venture, The kinds and number of upgrading, boost the ability was 670 million yuan and its traditional Chinese musical to earn foreign exchange and profit 166 million yuan. instruments for export greatly minimize the use of foreign With growing profits, the increased in 1990, the value of exchange. With limited for• which exceed 1.2 million yuan. capital's foreign-funded enter• eign exchange, China will im• prises are playing a greater The new-generation 402 dul• port advanced technology and cimers manufactured in 1990 role economically. In 1990, the key equipment as well as ma• total industrial output value were all sold to Taiwan. terials and equipment needed • of foreign-funded enterprises by the state key construction in Beijing increased from 7 projects. The imports of lux• percent in 1989 to 9 percent as Foreign Exchange uries, high-grade consumer goods, cigarettes, wines and proportion of the city's total. Revenue Increases fruits are strictly controlled. The labour productivity in The production and develop• these enterprises was obvious• By the end of 1990 China ment of goods which replace ly higher than that of similar had a total of US$45.05 bil• their imported ones should be state-owned enterprises. • lion in spot exchange ear• supported and their replace• nings, a 10.7 percent increase ment should be speeded up. over the previous year. The Chongqing Lures spot exchange disbursement by Han Guojian Foreign Investment totalled US$39.5 billion, up 2.6 percent, and foreign ex• Joint Ventures During the Eighth Five- change surplus reached Year Plan period (1991-95) US$11.09 billion. lilialce Profits and within the next ten years, The increase is mainly attri• According to the Beijing Chongqing plans to use over buted to the growing earnings Commission for Foreign Eco• US$1.6 billion of foreign capi-

BEIJING REVIEW, MARCH 11-I7,,<9S4 37 BUSINESS/TRADE

tal, of which some US$800 licensee in China for the prod• United States, Canada, the So• million to US$1 billion will be uction, sale and distribution viet Union, Singapore, Tai• used during the Eighth Five- of Carlsberg beer within the wan and Hong Kong have Year Plan period. mainland, excluding Hong visited the zone to discuss During this period, Chongq• Kong, Macao and Taiwan. possible investment and have ing will still emphasize the use This is the first time that signed six contracts for of foreign capital for energy Carlsberg has appointed a li• tourism, food-processing and resources, transportation, tele• censee to brew Carlsberg building materials and other communications, and infras• products in China. projects. tructure, but will also use The Huizhou brewery is In August 1990, an econo• foreign funds for technical a Sino-foreign joint venture mic delegation of overseas transformation and to under• company that started produc• Chinese from Thailand signed take structural readjustments tion in May 1987. Equipped an agreement with the Hainan of the machine-building, elec• with modern brewing equip• tronics, chemical, pharma• ment of the highest interna• provincial government to ceutical, light and textile in• tional standard imported from lease 80 hectares of land. The dustries so as to upgrade Germany and the United 70-year agreement calls for its old Chongqing industrial States, the company currently the construction of tourist ho• base. The city has initially produces "China Beer" and tels, a golf course and other mapped out 26 key projects, "Dragon 8," which have be• facilities. Investment for the including the Huatanzi Hy• come increasingly popular in first phase of the project, now droelectric Power Plant, the southern China. under construction, amounts No. 2 Changjiang (Yangtze) In addition to brewing, to more than 10 million yuan River Bridge, Liangtuo Water Huizhou brewery also op• or about US$2 million. Works, urban railway tracks, erates a ring-pull can man• The Qinglan Economic De• public transport, as well as ufacturing plant with a de• velopment Zone, one of the 200,000-channel programme- signed production capacity of five major economic zones on controlled telephones and in• 130 million cans per year. It the island, encompasses vast tensive processing of silk. is one of eight can plants stretches of mangrove forest In addition, Chongqing granted operating permits by and coconut trees. The zone's plans to set up over 500 the Chinese authorities after a silvery sand, well-protected foreign-funded businesses and nationwide inspection in 1990. bathing beaches, internation• sign agreements for foreign The agreement was promot• ally famous Huashan moun• investment of US$300 mil• ed by Bond Corporation Inter• tain scenery and convenient lion. The city will attract for• national Limited, an invest• transportation system provide eign capital by more flexible ment holding company regis• a solid foundation for tour• policies. At the same time, it tered in Hong Kong, which ism. In addition, Qinglan Har• will pay special attention to purchased an 85 percent of bour's proximity to inter• attracting investment from the Huizhou brewery's stocks Hong Kong, Macao and Tai• in July 1989. national navigation routes makes it ideal for import and wan compatriots as well as ov• by Han Baocheng erseas Chinese. • export trade, and the coastal area's rich marine and agricul• Hainan Courts tural products are favourable Carlsberg Beer Made Foreign Investors for development of processing in China industries. The Qinglan Economic De• Huizhou Brewing Co. Ltd., velopment Zone in Wenchang Today, Qinglan Harbour in Huizhou city, Guangdong County, Hainan Province is has one 5,000-ton and four Province, has recently signed attracting increasing invest• 500-ton berths in its wharf dis• a long-term technical service ment from foreign business• trict, and 300 automatic te• and trademark license agree• men because it has made a lephone channels. The first ment with the Carlsberg Inter• determined effort to improve phase of a water supply pro• national A/S of Denmark. its investment environment. ject to provide 5,000 tons of Under the agreement, the A zone official noted that tap water daily is under con• Huizhou brewery has been ap• since early 1990, a stream of struction and will soon be put pointed Carlsberg's exclusive businessmen from Japan, the into service. •

38 BEIJING REVIEW, MARCH 11-17,1991 TOURISM a natural preserve. They en• 'One-Day Tour' on the Sino-Soviet Border joyed the charming scenery and the quality mineral water ith the development The host side needs to prov• of the area as well as de• of Sino-Soviet border ide communication services, monstrations of traditional trade, tourism along lunch and supper, interpreters Wthe border is getting busier and guides. Generally, travell• Chinese acupuncture aid day by day. In Heihe City, ers are allowed to stay for a qigong (deep breathing exer• Heilongjiang Province, the maximum of 12 hours abroad. cise). The convalescent tour number of cross-border tour Since the "one-day tour" be• involved a new form of barter groups from both sides gan, many people from the trade in which the Soviet side reached 875, some 35,407 peo• two cities have taken advan• paid tourist charges in com• ple in 1990, twice than that of tage of the opportunities. In modities needed by the 1989. the beginning, there were two Chinese side. Both sides are Situated in the middle sec• groups (40 people per group) now actively preparing a tion of the Sino-Soviet bor• exchanged weekly. Current• "three-day tour," "five-day der in Heilongjiang Province, ly, even though some twenty tour" and "seven-day tour." Heihe City looks to the So• groups are exchanged weekly, Tours allowing nationals viet Far East city of Blago• more people want to take part. from a third country are now veshchensk right opposite Among the "one-day tour" being tried. During the first the Heilongjiang River. The there are many business peo• economic and trade talks be• "Heihe-Blagoveshchensk One ple because the procedures are tween China and the Soviet Day Tour," begun in Septem• relatively simple. Union and East European ber 1988, is organized by the Through the "one-day countries held in Harbin City, China International Travel tour," many people from the 100 or so business people from Service, Heihe Branch and the two sides are actively expand• Eastern Europe entered China Soviet Amur Prefecture Tour• ing into new fields of co• by way of Heihe City as tour• ist Corporation. Since the operation. In 1990 the Chinese ists. An official of the travel tourists from both countries side received the first Soviet service in Heihe Prefecture lack hard currency, those on tour group to come for conva• noted that the multi-national the "one-day tour" are al• lescence. The 30 people had a. tourism would continue to de• lowed to exchange their cur• tour of 24 days at five large velop in the future. rency on a one-to-one basis. volcano lakes which make up by Li Ping

International Tea Culture Festival in Hangzhou ecently the director of cent of the nation's total. It is seminars; the Zhejiang Provincial reported that the first interna• • A special tour to the Tourism Bureau an• tional tea culture festival will Rnounced that the '91 China In• focus on tea, but will integrate hometown of tea; ternational Tea Culture Festi• it with tourism, culture and • Arranging exhibitions val will be held from April trade. Main events of the and business talks on tea cul• 24 to 30, 1991 in Hangzhou, week include: ture, particularly focusing on a scenic tourist city and the • Famous tea and teaset ex• porcelain teaware, silk, fa• hometown of the famous hibitions of past ages; shion and tourist products. longjing, green tea. • Tea-making demonstra• The festival will be joint• China is the birthplace of tions and tasting famous tea; ly sponsored by the National tea, and Zhejiang Province is • Demonstration of tea well known for its tea. Its out• picking and processing; Tourism Administration and put of tea production ranks • Calligraphy and painting the people's government of first among all provinces in exhibition on "tea culture," Zhejiang Province. China, accounting for 25 per• including artists' concerts and by Yao Jianguo

BEIJING REVIEW, MARCH 11-17;JSI« Vice-chairman of the NPC Standing Committee Ni Zhifu and others visit the exhibition. Tibetan IMonastic Art in Beijing A scene from Princess Wencheng Enters eople in Beijing were able Tibetan and Han styles. At the Tibet. to feast their eyes on the height of Buddhist popularity, va, Buddha warrior attendants, P unique butter art of the there were as many as 3,600 la• birds, animals, flowers, insects, Qinghai Tar Monastery at the mas. fish, rivers, mountains, trees, Butter Art Exhibition held re• Each year four grand religious pavilions, terraces and towers, cently at the Beijing Cultural Pa• ceremonies are held, when lamas etc. These butter flower sculp• lace of Nationalities. create butter sculptures, frescoes tures can measure anywhere The Tar Monastery, situated and relief embroidery—three ex• from one or two metres for the in Huangzhong County, in nor• quisite traditional works of art largest to 10 or 20 millimetres thwest China's Qinghai Province, —to express religious tales and for the smallest, and are bright is the largest Tibetan Buddhist legends. and lively in colour. temple in Qinghai. It was built to There are many enchanting le• For the past several hundred commemorate Zongkapa, foun• gends about the origin of butter years, owing to the endless ef• der of the Dge-lugs-pa sect of art work. A story has it that forts made by generation after Tibetan Buddhism. Zongkapa once dreamt that generation of Tibetan artisans, Zongkapa, born into a Buddh• fields of grass and fragrant wild this craft has been gradually per• ist family in 1357, was tonsured flowers all changed into a sea of fected and reached reaching its at the age of seven and went to butter lanterns. Fairy towers and present state of exquisiteness. Tibet for further studies at 16. jade pavilions emerged amidst The butter work Princess Wen• When he was 31 he initiated reli• the sea of brilliant lanterns and cheng Enters Tibet displayed at gious reform and was a strict dis• numerous strange birds and ani• the exhibition depicts the story ciplinarian. He restored celibacy mals danced together to music. of Princess Wencheng, daughter and prohibited the consumption Zongkapa's devout Buddhist dis• of the Tang Dynasty emperor of of wine and meat, thus forming ciples then sculpted a work of art the 7th century, married King a new generation of religious consisting of a huge array of but• Songtsan Gambo of Tibet. With practice. He founded the Dge- ter flowers according to those the Tang capital Changan and lugs-pa sect and was publicly re• he had dreamt of and displayed Lhasa as its background, the but• cognized as leader of Tibetan them at an exhibition on his ter sculpture has over 200 fi• Buddhism. This Buddhist sect birthday. This practice has been gures. Princess Wencheng is par• became the first large religious carried on ever since. ticularly graceful and dignified, sect in Tibet. Butter flower art is a three- yet pining for her home, while The monastery, built in the dimensional art form requiring King Songtsan Gambo is magni• 16th century, was a large archi• great skill. The rich sculptures ficent and overjoyed with hap• tectural complex that consisted depict various tales, mainly piness and expectation. When of groups of buildings in both the about Buddha, fairies, Bodhisatt- viewing these butter art works.

40 BtSJING REVIEW, MARCH 11-17, 1991 CULTURE / SCIENCE

shapes of Buddhas, fi• majority Tar Monastery collec• gures, birds, animals, tion of paintings. rivers, mountains, flow• Also on display at the exhibi• ers, grass, etc. and em• tion were masks worn by lamas broidered onto a cotton when they perform dances in the backing in which wool monastery at ceremonies to drive or cotton has been away devils every year. In these stuffed to give it a relief striking and extremely impres• effect. It is dazzlingly sive masks, they dance to gorgeous and the sub• rhythms in an unusual and myst• jects chosen are usually ical manner. well-known and highly It is said that in 1989, it was the appreciated. An out• wish of the late Tibetan Buddhist PholM hii YU NJNG standing piece of this is A Tar Monastery artisan giving a final touch to a the 20-metre-wide and Master Bainqen Erdini that Ti• butter art piece. 30-metre-high portrait betan butter art work be put on of dignified Sakyamuni display one day in Beijing. The one can appreciate the artistic displayed in the Tar Monastery. recent exhibition in Beijing has height attained by these Tibetan Frescoes and Tangkar paint• made his long-cherished wish be artists and their attention to de• ings, Tibetan religious paintings realized, and will help promote tail in these historical stories. on silk scrolls done in splendid mutual understanding and ap• Relief patchwork embroidery, green and gold colours using fine preciation for various nationali• where multi-coloured silk bro• brush strokes and rich in nation- ties' cultural achievements. cade pieces are cut into various aUty characteristics, make up the by Yn Ning

So far, Wang has cured 11 cas• es of advanced cancer. Except Marrow Treatment Cures Cancer for two patients who died due to ix months ago, Yang Wen- Routine chemotherapy and excessive metastasis and delayed jie of the Beijing Electrical nursing followed. At the end of treatment, the others (among S Machinery Plant was diag• one month, a miracle seemed to them eight lung cancer patients) nosed as having advanced lung have happened. All Yang's med• had tumours that shrunk to var• cancer. H coughed blood, had a ical test were normal and 'all ious degrees and symptoms that high fever and felt congestion in his symptoms disappeared, in• became less severe or disap• his chest. It was at this stage that cluding the shadow of phyma in peared. Yang received the new marrow- his chest. Why is the therapy so effec• transplant therapy from doctor "Yang is not the first patient to tive? According to Wang, while the double dose of chemotherapy Wang Liangxu, director of the receive the therapy, although he forcefully kills the cancer cells, blood disease section of the No. 3 has made the best recovery," said the retained marrow helps the Hospital of the Beijing Medical Professor Wang. Prof. Wang's patient recover quickly from the University. first case was a 72-year-old man. side effects brought on by the After three weeks of prepara• By the end of 1989, the old man chemotherapy. tion, Yang, wholly disinfected, had had three comas in addition When Wang visited the United was taken to an aseptic emergen• to chest congestion, abdominal States for an academic exchange cy ward. Wang and his assistants hydrops and anemia. The blood in the early 1980s, he found took 1,000 cc of marrow from disease section of the hospital his American colleagues study• Yang and preserved it. Then they diagnosed the case as lung cancer ing marrow therapy. After he re• carried out collision chemothera• at an advanced stage. Beginning turned to China, he carried out py on Yang with twice the usual last February, Wang gave the research in marrow therapy him• dosage for three consecutive above treatment to the old man. self, accumulating information days. Seventy-two hours later, at One month later, the abdomin• for seven years before his first the end of the chemotherapy, al hydrops disappeared and the clinical success in China last Fe• Yang received his bone marrow tumour shadow diminished in bruary. back again. size. by Cui Lili

BEIJING REVIEW, MABCH 11-17, WM 41 CULTURE/SCIENCE of them have been collected by Drawing Inspiration From Folk Art Chinese and foreign museums. Zeng's early paintings contain eng Xiaofeng, a young demy of Yunnan Province and elements of the rich minority Z painter from Yunnan created a large number of works cultures and arts in Yunnan Province, southwestern which are diversified both in Province. Yunnan is populat• China, has distinguished him• subject matter and technique. ed by a great variety of eth• self as a promising artist with nic groups and is abundant in His work gradually developed folk culture. Zeng has devoted his original and creative paint• into a simple and mystic style. much time and energy to the ings. During this period, Zeng won investigation and study of this Zeng aroused public attention many awards. His woodcut folk art. The ancient mythology, as a painter in 1981. That year, print. The Lake of the Stone cliff paintings, bronze wares and Zeng, a self-taught amateur Forest, won an award from the the century-old customs now painter, won the second award magazine, The World of Wood• still practiced by some ethnic in the Second National Arts Ex• cuts; his oil work, Land of groups inspired his imagination hibition for his oil painting, Top Peace, won third prize at an ex• and nourished his creativity. of the Mountain, which vivid• hibition marking the Interna• During this period, Zengis ly and accurately presents the tional Year of Peace; his wood• paintings focused on two main splendid and overwhelming cut, Night, and oil work. The themes: the first reflects the life stone forest in Yunnan Prov• Forgotten Illusion, won bronze of the Wa and Yi nationalities, ince. This work won high ac• medals at the Seventh Nation• simple and robust in composi• claim from well-known painters al Art Exhibition. Some of his tion and rich in national fla• and art critics throughout the works have been exhibited in vour; the second borrows some country. the United States, Japan, Aus• techniques used in cliff paint• Zeng later joined the Art Aca- tralia and Hong Kong, and some ings and bronze wares. Zeng also created several Woodcut print series, i^ight. painting series, such as Night and Tables. In these works he penetrates even deeper into the evolution and representation of the cultural sources of the arts. Human feelings and natural mystery are combined to prod• uce an artistic whole. Zeng has grasped the essence of the local arts from a historical view. He always strives to trace the roots of life and create har• mony between the primitive and the modern. "I draw my inspiration from religion, the black mountains, the deep forest, the vast land and the stary night as well the living souls in this land, " said Zeng. "Modern culture has been spoiled by commercialization and materialism. As a result, art begins to repeat itself over and over, getting further away from the essence of life. Real art must be rooted in the rich land under one's feet," concluded the artist. by Qi Yao

42 BHJING REVIEW, MARCH 11-17,1991 Snow-Clad Mountain Peaks.

Chinese Paintings by Sun Ying

Sun Ying, born in Gaotang County, Shandong Province in 1919, returned to live in Beijing in 1982 after residing in Taiwan and the United States. He is now a professional painter with the Chinese Painting Research Institute. While devoting much attention to the outstanding tradition of Chinese painting, he focuses on the use of calligraphy with the Western genre of realistic paintings, an effort which has led him to create a unique style of modern Chinese art.

An Ink-Splash Landscape.

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