Li issues cautious note on reforms

PREMIER Li Peng struck a cautious note on the detailed work plan to be undertaken next year as the first step in the second stage of China's economic reforms.

While emphasising the need to maintain the ''sustained, high-speed and healthy'' growth of the economy, he said macro-control measures should be strengthened and improved.

Speaking at the opening of a national economic work conference, Mr Li reiterated the official stance that the four-month-old austerity programme had been proved to be ''necessary and correct''.

Noting that China was faced with a golden opportunity for reform and development, he said: ''We have to keep a sober mind to see that there are a lot of contradictions and difficulty . . . that can only be solved through the deepening of reform.'' He warned that fresh reforms such as the revamping of the ailing state-owned enterprises and the building up of a modern enterprise system would also bring about new problems.

Although the change of ''exterior environment'' for enterprises would have a positive impact on firms, he said they would also encounter fresh difficulties.

''There would be a need for relevant government departments to co-ordinate the country's macro-economic operations better and improve the work to monitor and forecast economic trends,'' he said.

''The shortage of funds would be alleviated gradually.'' But, he expected that problems concerning the market might stand out.

The premier also called for continued efforts to make the size of capital investment ''appropriate'' and in line with the growth of the economy.

He said that regions and departments should reschedule the priority of projects to ensure adequate funds would be available to key projects such as infrastructure, education and technology.

On the politically-sensitive issue of price reform, the premier said the lifting of price controls should continue next year, but in a prudent manner.

He said any changes should only be made after fully taking into account whether the people would be able to accept it.

Xinhua (the New China News Agency) said the premier had drawn attention to the importance of showing concern for the people's livelihood ''at a time when reform would surge ahead in big strides and prices would rise sharply''.

Mr Li called on senior cadres to make an effort to improve the well-being of people who might suffer under the sweeping changes.

These included people who still did not have enough food and clothing as well as workers and retired workers whose inefficient factories would have to close under the reforms.