Zhu Rongji

Zhu orders rethink on economy

PUBLISHED : Friday, 26 December, 1997, 12:00am
UPDATED : Friday, 26 December, 1997, 12:00am


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Executive Vice-Premier Zhu Rongji has ordered a reassessment of the mainland's economic strategy in view of the South Korean financial crisis.

This reappraisal will be reflected in the government work report to be delivered to the Ninth National People's Congress on March 5.

Beijing sources said yesterday Mr Zhu and his advisers had expressed alarm at the severity of the economic situation in South Korea, which had served as a model for China's industrial policy.

They said the leadership had in particular followed Seoul's approach in developing large conglomerates, which benefit from close government support.

'Zhu and his aides will re-examine strategies such as pumping extra resources into nearly 1,000 enterprises with a view to nurturing them into Chinese Samsungs or Hyundais,' an economic source said.

'Also to be reappraised are plans to convert a number of industrial ministries and departments into state corporations.' While the government work report will be delivered by outgoing premier Li Peng, Mr Zhu is in charge of putting together the final drafts.

It is believed the report will give the first indication of the philosophy and policies of the Zhu administration.

The economic tsar will, for example, urge a stronger programme to restructure state enterprises or transform them into shareholding and quasi-private entities.

Mr Zhu is also busy expanding his policy think-tanks in preparation for a more advanced phase of economic and administrative restructuring.

He will reportedly send some of his young advisers on fact-finding trips to countries hard hit by financial turmoil, such as Malaysia and South Korea.

Meanwhile, Mr Zhu's expected successor as executive vice-premier, Li Lanqing, has been putting together his own brains trusts.

A former minister of foreign trade, Mr Li has recruited professors who are teaching at institutes specialising in foreign economic relations.

The Chinese media yesterday quoted Mr Zhu as telling 3,200 senior officials in Beijing that the Chinese economy had entered its 'best period' in recent memory. He said the mainland had entered into a 'new model' of high growth with low inflation.

Mr Zhu also called on the nation to follow the party leadership with President Jiang Zemin at its 'core'.

The official media has made no reference to senior cadres' remarks on the Asian financial crisis.