bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

authorLocations

authors

paywallTypes

corrections

sponsorType

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

SCMP Reporter

THAT practically all of Communist China's economic blueprints have eventually been changed beyond recognition is little consolation for liberals grousing over the dearth of reformist elements in the Ninth Five-Year Plan.

  Nor does this detract from the triumph of conservative cadres or 'born-again' planners such as President Jiang Zemin, premier Li Peng and Vice-Premier Zhu Rongji.

  The blueprint for the years 1996-2000, which is expected to be endorsed by the fifth party Central Committee plenum next month, will also draw the curtain on the Deng Xiaoping era. The bulk of the goals of the Chief Architect of Reform have been rolled back.

  Contrary to reports in the Hong Kong and Taiwan press, the Jiang-Li-Zhu 'triumvirate' was largely able to impose a consensus during high-level deliberations on the plan held during the past two months.

  Mr Deng's famous 'high-growth model' has been consigned to history. As Mr Li said during a tour of factories in Liaoning province late last month, the 'key to national economic development is changing the way in which growth is achieved'.

  For the master planner, growth must be predicated upon 'developing existing productivity; progress in technology; and strengthening the management of enterprises'.

  Mr Li and Mr Zhu have savaged Mr Deng's famous dictum of 'crossing a major threshold every few years'.

  In their eyes, the high growth rate chalked up through the 1980s and early 1990s was based on a Great Leap Forward-style binge of investment and infrastructure building, the indiscriminate creation of economic zones, and speculation in the stock and real-estate markets.

  Prudence and stability are the watchword of the plan, which has settled on an average growth rate of 9.3 per cent.

  On the reform of enterprises, the economy's scourge, the plan endorses Mr Jiang's caveat about preventing the emergence of a 'capitalist market economy'.

  As the president put it in a major policy statement in July: 'The state-held economy and the entire publicly owned economy can only be made better and strengthened, not curtailed.'   For Mr Jiang, market reforms take a back seat to the ideological need of preserving socialism - and the practical need of preventing unemployed and under-employed workers from hitting the streets.

  The blueprint makes no provision for experiments in quasi-privatisation such as the large-scale formation of share-holding companies.

   The plan prescribes six methods for turning around the state enterprises: ensuring better government supervision of state property rights; a financial mechanism that is based on Western-style companies; an accounting system based on international norms; reforming areas of internal management such as personnel and the distribution of rewards; separation of the functions of government and enterprise; building up a mechanism of bankruptcy and merger to flush out the inefficient units.

  These recommendations confirm the trend of emphasis moving from structural overhauls favoured by reformers to the inward-looking tinkering with management methods, what Mr Li calls 'tapping the residual potential of enterprises'.

  In spite of recent promises by economic ministers that large numbers, perhaps thousands, of the money-losing dinosaurs will be declared bankrupt, the plan contains neither targets nor timetables for the radical measure .

  While addressing factory cadres last weekend, Vice-Premier Wu Bangguo, another born-again planner, pointed out that in the interest of cutting unemployment, 'we must insist upon [the policy of] less bankruptcies and more mergers'.

  In agriculture, the blueprint upholds Mr Deng's family-based household contract responsibility system.

  However, it points out that the future lies in different forms of collectivisation, including gigantic farms based on a rural shareholding system.

  'We must gradually regulate the change of land use in village plots, and encourage the villages to adequately expand their [collectivised] large-scale production,' a draft of the plan says. Elements of 'recentralisation' introduced in the past two years, such as imposing targets for grain and cotton production in provinces and counties, will be maintained.

  The same goes for heavy-handed government interference in the procurement and circulation of produce.

  Mr Zhu pointed out in a conference on cotton last week that 'the policy of 'no free cotton market, no free cotton business and no free cotton price' will remain intact'.

  In terms of regional balance, Mr Deng's policy of favouring the southeast coast and the Special Economic Zones (SEZs) is abandoned.

  'We must materialise the relatively balanced development of the west, central and eastern areas,' the plan says. 'We must particularly speed up the pace of development of the west.'   Fulminations of zone leaders could not sway the determination of Beijing to, in the words of the head of the State Council SEZ Office Hu Ping, 'restructure and re-adjust some of the zones' preferential policies'.

  The only exception of the policy of 'crimping the east to benefit the west' is Shanghai and Pudong, the power base of Shanghai Faction politicians such as Mr Jiang and Mr Zhu.

  Pudong is to benefit from 18 'special policies' during the 1996-2000 period, including the right to float loans overseas.

  THE upper hand enjoyed by Jiang, Li and Zhu is based upon signs that the austerity and recentralisation programme is working. They include an inflation rate of below 15 per cent in the cities, and depressed investment activities along the coast.

  These apparent achievements, however, should not blind the neo-conservatives to the pitfalls of planning. After all, the temporary drop in inflation is due to costly administrative fiats such as subsidies, which increased 78.6 per cent in the first half of this year compared with the same period last year.

  To justify the recommitment to the diktat economy, the blueprint claims that planning will henceforth be based on 'scientific' and 'democratic' procedures.

  Given China's closed political system, there is no guarantee that state directives in the last five years of the century will be more accurate than that during the Cultural Revolution.



Planning to upset the reformist apple cart