CHINESE WEEKLY OF NEWS AND VIEWS Vol. 31,No.14 April 4-1 7th NPC & CPPCC in Session Beijing Review HIGHLIGHTS OF THE WEEK VOL. 31, N0.14 APRIL 4-10, 1988 LI Peng Reports to Seventh NPC CONTENTS NOTES FROM THE EDITORS 4 • In his report to the Seventh National People's Congress, Food Subsidies to Float With Acting Premier Li Peng sets out the principles, aims and tasks of Price Index economic development and reform for the next five years. He EVENTS/TRENDS S-9 calls for speeding up and extending the reform so that China's Li Peng Reports to Seventh gross national product can reach 1,550 billion yuan by 1992 (p. NPC 5). CPFCC Committee Opens First Session Scientific Work Must Get CPPCC Committee In Session Priority China Moves to Wipe Out • Highlighting the opening meeting of the first session of the Leprosy new committee, Vice-Chairman of the Chinese People's Weekly Chronicle (March 21-27) Political Consultative Conference Qain Xuesen's work report inT^KATiOtlAi 10-43 summarized the achievements of the Sixth CPPCC National Italy: Government's Resignation Committee over the past five years (p. 7). Accepted Africa; OAU Group Discusses Debt Conference Food Subsidies to Offset Price Rises Mauritius; Tiny Country Makes Economic Strides • Confirming its determination to pursue price reforms which Thailand: Investment, Exports: consider the interests of both producers and consumers, the Key to Success Chinese government has decided to offer subsidies for food to The Contract S^tem on the Ralls 14 urban dwellers in an effort to offset local price rises (p. 4). Discussions: Contraet Sy^st^ In CMNi's Enterprises IB Now tf$n6 tn Enterprise Reform 19 China's Tibetan Demographic Changes Tlbe«iR»^inhat>ited Areas: OMgrdphic Changes 21 • Demographic changes disqualify accusations against ResiMMfttuHng Maanshan's China's Tibetan population policy and expose as wild OdA^emment 2S exaggerations the claim by the Dalai Lama clique that there are tmtm figures: 1S87 Retaii more than 6 million Tibetans in Tibet (p. 21). i»riii Index Rises 7.3% 27 mtfiivm ^CokHiredi nctwial) Centrefold The Contract System on the Rails FROM THE CHINESE PRESS 28-29 BUSiNESSARADE 30>31 • The contract system granting more responsibility to local CUiTURE/SCIENCE 32-33 railway bureaus and linking remuneraUon with performance 5M 34 has been linked with China's railways for two years now. One of The Shenzhen North Station its success stories is the Guangzhou Railway Bureau (p. 14). (left). Duan Xiaosheng, head of the Guangzhou-Jiujiang passenger trans- porT-section (right). The Guangzhou Railway Station (lower). Subscription rates (1 year): USA.. US$24.00 Pubiish«W every Monday by General Editorial Office Tel: 8314318 Australia A.$24.00 Canada Can.$23.00 English Dept Tel; 831.5599 Ext 546 BEIJIffe REVIEW New Zealand NZ.$33.00 24 Bai^Bnzhuang Road, Distributed by China International Book UK £13.00 Beijing'100037 Trading Corporation (GUOJI SHUDIAN) The Peoples Republic of China P.O. Box 399, Beijing, China m NOTES FROM THE EDITORS Food Subsidies to Float With Price Index by Ling Bin ising prices have raised great by 10.1 percent. The price of meat, tural and sideline products are still R concern among the general poultry and eggs went up by 16.5 too low compared to those of public in recent years. In his report percent; that of vegetables, 17.7 processed goods, and they will to the Seventh National People's percent; and that of aquatic continue to rise. Offering some Congress delivered on March 25, products, 17 percent. Of the 7.3 compensation to urban residents Li Peng discussed policies related percent rise in the retail price for higher prices will reduce to this issue. He said that the index, price hikes on food resistance to the ongoing price government will continue to products accounted for 65 per• reforms. reform the irrational pricing cent, indicating a serious discrep• Third, of the total expenditure system and readjust the prices of ancy between the supply and of urban dwellers, about 60 agricultural and sideline products demand of agricultural and percent goes to food products. to promote the development of sideline products. Consumer de• Offering subsidies to cover price production. At the same time, he mands for variety and quality has rises for basic food products is continued, urban dwellers will be increased too rapidly and cannot conducive to social stability, and subsidized for the rationed part of possibly be met. As a result, many will provide some protection principal foodstuffs to offset local cities have been compelled to against declining living standards price rises. reintroduce the rationing of pork, in families with lower incomes. eggs and other food products. Subsidies will be granted for six The government is obviously The problem of food supply basic food products — grain, oil, not wavering in its determination shortages cannot be tackled by meat (including beef, mutton and to pursue price reforms while simply returning to the old system pork), common vegetables, fresh taking into account the interests of of state monopolized purchasing eggs and sugar. Of these, grain and both producers and consumers. and marketing. It can only be done oil have been rationed at low Since 1979, China has gradually by adopting appropriate pricing prices for quite some time. This relaxed government controls over measures, developing agricultural policy will remain unchanged. the prices of agricultural and production, stimulating commod• Price controls on the other four sideline products and of primary ity circulation and controlling items will be lifted and appropri• products from mining and other excessive consumer demand. Pric• ate subsidies issued on rations. industries, which have been ing is the most important factor The subsidies will be extended to remained relatively low for a long here since it is closely linked to the urban workers and office staff and time. This has. directly or interests of both producers and their families, retired Jjeople, indirectly, resulted in a series of consumers. The most feasible servicemen and women, and price rises for foodstuffs and approach to the problem is to students, but not to those who find processed goods as well as labour gradually raise the prices of temporary employment in the services. In the three years from agricultural and sideline products cities. 1985 to 1987, in particular, the so that farmers can make a profit, national price index rose by 8.8 Of course, even after the and to provide urban dwellers percent, 6 percent and 7.3 percent introduction of the policy, the with subsidies for rationed part of respectively, with more rapid price government will still have to principal foodstuffs adjusted to increases in the cities. During the improve the production and changes in the general price index. process of reform, a certain rise in supply of agricultural and sideline prices is inevitable ^ and is Several conditions lie behind goods, to keep the growth of the indispensable for promoting the the reasoning in this approach. retail price index within the reach development of a commodity First, China has large population of the community, and to economy. But, China has ex•but insufficient cultivated land. strengthen market control and perienced too rapid price rises in No dramatic changes in people's supervision. With the rapid the past few years. diet are likely in the near future, development of commodity pro• and no real increases in the output duction in the countryside, At present, the crux of China's of meat products are expected. So officials at various levels must price problem is the price of food subsidies should be issued to learn the importance of the law of products. According to statistics urban residents on rationed food value, and co-operate with provided by the State Statistics products. farmers in line with the principle Bureau, in 1987 food prices rose Second, the prices of agricul• of exchange of equal value. • 4- BWJING REVIEW, APRIL 4-10, 1988 an average annual increase of 8 million tons. Li Peng Reports to Seventh NPC The keys to strengthening basic industries and infrastructure — the weak links of the national cting Premier Li Peng has the foundation for sustained economy — are technological A stressed the importance of economic development of the transformation, renovation and stepping up agricukural produc• country." expansion, the improvement of tion, developing basic industries Investment in agriculture must rnanagement, full use of resources and infrastructure, and speedily be increased and efforts should be and funds and maximizing implementing a strategy of made to improve the physical and productivity, Li said. economic development for coastal technological standards of farm The development of the produc• regions. production to provide the basis for tive forces, the improvement of In his report on the work of the further development. economic results and the progress government to the first session of He set a production target for of the whole society depend on the the Seventh National People's grain of 500 million tons by the development of science, tech• Congress (NPC), which opened on end of the century, which means nology and education, he added. March 25 in Beijing, Li included these objectives among the 10 Li Peng reports on government work. XUE CHAO major tasks to be accomplished in the next five years. He told about 3,000 deputies at the Great Hall of the People that the coming five years would be "the most important period" for China in replacing its old political and economic structure. It would see the completion of the second step of the strategic plan for national economic development. By 1992 — the second year of the Eighth Five-Year Plan period, Li predicted gross national product (GNP) will reach 1,500 billion yuan at an average annual growth rate of 7.5 percent, which is almost the same as the rate set in the Seventh Five-Year Plan.