Deng’s reforms gather pace

Press, 2 April 1985, Page 26

Deng’s reforms gather pace

NZPA-Reuter Shanghai China’s 80-year-old reforming leader, Deng Xiaoping, is changing the country so fast that what is unthinkable one day can become the norm the next. As an indication of how far things have gone, Shanghai, once a stronghold of the late Chairman’s Mao Tsetung’s ultra-Leftist ideas, is now considering selling off smaller State-owned businesses to private enterprise. “We haven’t done it so far, but it is one of the options we are considering,” says Tang Qusheng, head of Shanghai’s Reform Bureau. “If we did it, we would sell off High Street shops or small industries with profits of under 200,000 yuan ($157,500),” he said in an interview. About 30 commercial enterprises owned by the state in Shanghai have already been leased to individuals and a further 200 have been changed from state-owned to collective ownership. After the Communist take-over in 1949, all key industries became state owned and the socialist tide eventually engulfed even small traders and shopkeepers. Since Deng took over in 1978, he has reversed many of Mao’s policies, abolished rural communes and ordered a shake-up of industry. Ending China’s international isolation, he is opening up parts of China to foreign investment and has ushered in a High Street revolution by dramatically improving the supply of consumer goods such as bicycles, refrigerators, televisions and radios. But the stocky leader declared in a speech recently that his aim was to develop socialism, not to turn China into a free enterprise, capitalist economy. If his policies resulted in a new capitalist class emerging in China then, he said, “we have really taken to evil ways.” Some people, he said, were hoping that China would turn capitalist, while others feared that it would. In a surprising admission, he agreed this fear was not totally unfounded. But, Deng said, it should be countered by facts. The fact was that the public sector in China would always be the predominant force within the socialist economy, he said. The key to realising Deng’s aim of prosperity for all is his attempt to shake Chinese industry out of its lethargy.

A series of measures announced in October last year are now being implemented. In Shanghai, it is Tang’s job to oversee the changes. Factories have been given new decision-making powers and a ceiling on pay bonuses for workers has been removed. Factory directors can now manage their factory. Previously the local Communist Party secretary had the final say. Companies are being merged to increase efficiency. Companies showing losses can now even be closed, an event unheard of during Mao’s day. In the port, the gateway for China’s exports, two firms have been merged to form a new container handling company. Two new container terminals will double capacity by 1987 to 300,000 units. Tang says his office has drawn up four options for invigorating small Stateowned industries, employing under 500 people. These include changing to collective-style management, shifting ownership from the State to the collective system, leasing enterprises to individuals or selling shops or firms to private enterprise — either an individual or a group of shareholders. Collectives are run by local communities and give workers a bigger say in the way they are run, though they are still publicly owned.