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Chris Yeung

CHINESE President Jiang Zemin yesterday said accelerating the pace of reform was the solution to the economic problems.

  Mr Jiang emphasised the significance of strengthening ''macro supervision and regulation'' to maximise the function of markets in the distribution of resources.

  He also underscored the importance of cracking down on corruption.

  Mr Jiang was speaking at a Xian economic conference among leaders of five poor northeastern provinces - Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang.

  The Communist Party chief insisted the economy was in good shape.

  ''Reform has already entered a new stage. We must continue step by step,'' he said.

  Mr Jiang said reforms that had proved correct must be maintained.

  Those whose function remained uncertain and which were yet to be fully developed should be studied, he added.

  Mr Jiang again emphasised the importance of studying the thoughts of Deng Xiaoping.

  Stressing that the central leadership was concerned about the wide gap between the East and West in economic development, Mr Jiang told the provincial leaders to strive for a speedier pace of reform with efficiency and consideration of practicalities.

  A national craze for a quicker pace of reform has partly led to unregulated control over money supply and runaway inflation has surfaced in the past few months.

  However, the semi-official China News Service (CNS) yesterday said China would not suffer panic buying and social unrest, such as happened in 1988.

  Separately, the Hongkong China News Agency reported that the cost of living in Guangzhou soared by 19.2 per cent in the first five months of this year, compared with the same period last year.

  But it noted that the average total income of people had grown by about 32 per cent, thus their total income had an actual growth rate of about 11 per cent.

  The CNS said the state of the economy was similar to that of 1988 in that both investment and consumption had jumped.

  ''However, people in the bustling shopping arcades just do not feel the same panic which was prevalent in 1988.''   It argued that this was because the high speed of growth was progressing against a background of intensified market-orientated reforms, and the improving efficiency and financial situations of enterprises.

  Given the increase of supplies in the market, the report said it was unlikely another round of panic buying of goods would occur.

  The CNS also cited the fact that the gradual lifting of price controls over a wide range of daily commodities since last year had been ''received calmly'' by enterprises and the people.

        ''The establishment of a market economy might avoid a new round of sudden ups and downs so the economy will gradually develop in a stable and co-ordinated manner,'' it said.



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Jiang Zemin

Jiang urges faster pace for reforms