Beijing steps up 'economic revolution'

Chris Yeung

CHINA is to launch a new wave of reform by taking bolder steps towards building a socialist market economy, the Communist Party mouthpiece People's Daily said yesterday.

Declaring ''the fundamental way out for China lies in deepening the reform [process]'', the leading newspaper said intensifying reform was the only way to seek a ''sustained, speedy and healthy'' development of the economy.

In a frank admission, it said the reform drive would inevitably meet opposition and resistance because of the obsession with old concepts and conflicts of interest.

''But the difficulty and resistance cannot be avoided. There's no backtrack for reform,'' it said in a front-page commentary.

The bold call for no-holds-barred reform sets the stage for the upcoming Communist Party Central Committee Third Plenum, which has been seen as a watershed conference since the policy of reform was adopted in 1978.

A set of blueprints revamping the finance, taxation, investment, banking and market systems are expected to be approved at the plenum for full implementation next year.


Noting that the four-month-old austerity programme had achieved ''initial results'', the newspaper lamented that ''problems and contradictions'' in the economy had yet to be fundamentally solved.

It blamed the old economic structure for the recurrence of chronic problems, such as overheated investment and backward management, which have posed a ''hidden danger'' to the reform drive.

''In order to solve these problems and seek sustained, speedy and healthy economic development, we must go deeper into the system and intensify reform. There's no other way,'' the article said.

It focused on the theme of ''seeking development'', as championed by patriarch Deng Xiaoping, who reportedly spoke against a slower pace of economic growth at the expense of retrenchment.


''We must not only grasp the chance for development, but reform,'' the People's Daily said.

It warned against using ''old thinkings and methods'' and relying on the ''old structure'' to seek economic growth.


That would only result in more problems and ultimately the loss of the golden opportunity for development, the paper said.

It called on the nation to learn from the teachings of Mr Deng to move boldly forward and draw experience from practice.

''Reform is a revolution. It is an arduous exploration with no precedent case. Reform will encounter difficulty, twists and turns and risk. But they are unavoidable.'' It said reform would also intensify conflicts between the central Government and regions.


While assuring that any changes would take into account the needs of different interests, the newspaper urged regions to shoulder boldly the mission of reform and focus on the long term.

It called on people to emancipate themselves from outdated concepts, such as fears that reforms over ownership of property rights would undermine the central role of the public ownership system in the economy.

''Genuine Marxist style promotes the exploration of new ways to boost productivity,'' it said.


The commentary outlined three major areas of reform; the establishment of a market system, improvement of the mechanism for macro-economic regulation, and revamping the micro-economy.

It said the transition of state-owned enterprises towards modern enterprises would be speeded up.

It described enterprises as ''the cells of national economy'' and said reform of enterprises was crucial to the success of a combination of public ownership and a market economy.