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DENG XIAOPING was wrong to advocate high-speed development without guarding against possible consequences such as inflation, economic imbalances, corruption and extravagance, according to a top Chinese economist.

  Hu Angang, adviser to President Jiang Zemin and Vice-Premier Zhu Rongji, also said the Special Economic Zone (SEZ) policies pioneered by Mr Deng should be scrapped to end unequal competition.

  The outspoken economist, of the Chinese Academy of Sciences, claimed Mr Deng would support his plan to narrow the gap between the rich and the poor if he realised how serious the disparity had become.

  'Developing the economy is not like fighting a war where we have to charge and kill . . . although [an accelerated rate of development] is not such a great mistake as the Great Leap Forward, it's still an error,' Mr Hu said, referring to Mr Deng's call for faster economic growth in 1992.

  The scholar said it was necessary to correct some misinterpretations of Mr Deng's theories so the economy could maintain sustained and healthy growth without exacerbating inflation.

  'Deng said development is the only way. But that doesn't mean high-speed development is the only way,' Mr Hu said.

  'In developing the economy, we also have to pay attention to issues like fairness, social stability and environmental protection.'   The leadership now puts more emphasis on stability than on high-speed growth due to the resulting social and economic problems.

  Mr Deng started the controversy in 1992 when he made his landmark south China tour and said China had to catch up with other Asian economies through high-speed growth.

  Mr Hu said he did not believe the current leadership should follow the patriarch's policies rigidly.

  The new generation of leaders will have their own plans for reform, he said.

  The scholar stressed that he did not mean the leadership should scrap Mr Deng's policies completely and that his plan to create an open economy had been an overall success, but that the privileges enjoyed by the SEZs should be abolished to encourage fair competition.

  Mr Hu said the SEZs should use their reformed economic structure, technological development and overseas contacts to maintain growth.

   He said Shenzhen Party Secretary Li Youwei, among others, had been resisting calls to scrap the SEZs' privileges by citing Mr Deng's support.

  In a recent interview with the Shenzhen Special Zone Daily, Mr Li denied the SEZs had helped create 'privileged cliques' in China.

  Under the SEZ policies, these zones - Shenzhen, Zhuhai, Shantou, Xiamen and Hainan - can offer special tax breaks and import tariffs to foreign investors.

  Another economist from Beijing, Lin Yifu, agreed that SEZ preferential policies should be scrapped.

  'As the market in China becomes more favourable, such special policies should gradually be lifted,' said Mr Lin, director of the China Centre for Economic Research at Beijing University.

  But he acknowledged Mr Deng had played a crucial role in changing the state's economic policy from rigid ideologically driven central planning.



Patriarch 'wrong' on fast-pace growth