Zhu Rongji
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Leaders to lift living standards

Zhu Rongji

SENIOR cadres are trying to boost their popularity by making efforts to improve people's quality of life instead of market reforms.

And leaders have made concessions to local administrations and enterprises on tax and other issues.

During meetings with National People's Congress delegates from various provinces, the premier Li Peng and Vice-Premier Zhu Rongji made assurances that the people's standard of living would not be further undercut by inflation.

Mr Li told deputies from Hebei yesterday that Beijing would boost vegetable and foodstuffs production to alleviate inflation.

''There are 23 kinds of goods that are most closely related to people's livelihood,'' Xinhua (the New China News Agency) quoted Mr Li as saying.

Mr Li said to encourage cotton production, the Government had decided to raise its purchasing price by a ''proper'' margin.

''However, if purchasing prices are raised too high, I'm afraid the textile industry won't be able to bear [the costs],'' Mr Li said.

While discussing economic issues with Hunan delegates, Mr Zhu also laid emphasis on agriculture and the ''vegetable basket''.

Mr Zhu reiterated measures that the State Council had announced last week on reinstating price controls on about 20 essential foodstuffs, consumer items, and services.

''Even under conditions of market economics, the state cannot give up price controls,'' Mr Zhu said.

''Nor can it stop subsidising enterprises that are of benefit to the public.'' Mr Zhu, widely seen as an architect of market reforms, also defended himself by saying it was a ''gross misunderstanding'' to link reforms to inflation.

Instead, the economic tsar urged regions and enterprises to tighten control over investments as well as consumption, saying local leaders must ''take into consideration the overall situation of the nation''.

However, the central leadership has made major concessions to the localities and enterprises over policies in the past week.

For example, the ''dual tax system'' which is supposed to boost Beijing's share of national tax revenues to 60 per cent has been watered down and postponed.

The announcement of taxes on real-estate appreciation has also been put back, as regional leaders continue to defy Beijing by insisting on their authority to make local variations to the controversial levy.

Over the weekend, the chairman of the Securities Supervision and Administration Committee, Liu Hongru, indicated Beijing had decided not to impose a tax on profits made on stocks and shares.