Reforms cut back for social stability

BEIJING has decided to hold back or scale down a number of radical market reforms to minimise social-political instability.

And provincial leaders among members of the National People's Congress (NPC) will this week discuss with the central leadership new ways to contain mass dissatisfaction over inflation, unemployment and other undesirable by-products of reform.

Informed sources said the leadership had decided to put a moratorium on a number of economic liberalisation measures unveiled at the Communist Party's third plenum last November.

Foremost among these was transforming state enterprises into shareholding companies and laying off redundant workers to promote productivity.

The sources said Beijing's new priority was to temporarily shore up government-run business units and to cut unemployment.

In a dispatch yesterday, the Beijing-run Hong Kong daily, Wen Wei Po, confirmed that ''in the interest of maintaining stability, the Party Centre had decided to temporarily slow down the introduction of some reforms''.

The newspaper quoted an ''authoritative figure'' as saying that only reforms in finance, banking, prices, foreign trade and investment would be executed as planned.

The figure did not disclose what reforms had been put on the back burner.

However, Wen Wei Po said that the leadership had set two criteria for determining which reform measures should be introduced.

It said even if the reform policies were correct, they would be held up if they would lead to ''a drop in economic benefits for the majority of people'', or if society could not cushion the shock.

''After deliberations, we can postpone [reform measures] for which there are real worries . . . or for which there is a lack of unanimity of perspectives,'' the newspaper quoted the ''authoritative figure'' as saying.

Political sources said the new concern for stability was reflected in some of the amendments that premier Li Peng yesterday made to the Government Work Report that he tabled to the NPC on March 10.

For example, on the re-structuring of state enterprises, Mr Li added Beijing would ''actively sum up experience and gradually put together standardised measures for implementation in order to facilitate the expansion [of the reform]''.

This, the sources said, was a roundabout way of saying that Beijing would exercise caution in overhauling government firms.

The premier also amended the report to provide for ''specialised treatments'' to lighten the burden of farmers, another potential source of political instability.

Remarks by Mr Li at the NPC closing ceremony showed the leadership was more concerned with preserving stability than bold reforms.

Speaking to reporters yesterday, Mr Li pledged that the Government would take thorough-going measures to keep down prices.

He indicated that while price reform would continue, measures would be introduced to stabilise the prices of about 20 commodities.

Chinese sources said there was disagreement between State Council leaders and provincial cadres over the extent to which Beijing should shelve or tone down the reforms.

They said leaders from the coastal provinces were eager that the momentum of reform be maintained because they feared local interests would suffer if it was rolled back.