SHANGHAI MAYOR. How a major Chinese city tackles the challenge of changing times. Mayor Jiang sees need for faster development - and a firm hand

The mayor of Shanghai was in an expansive mood. Relaxed and apparently unscathed by the political turmoil that befell his city with student demonstrations last December, he appeared confident about the future of Shanghai and his tenure as mayor.

``I'm doing some propaganda work with you,'' Jiang Zemin quipped to a group of Peking reporters. Mayor Jiang said this was his first meeting with the press since tens of thousands of students and workers took to the streets of Shanghai last winter as part of a wave of protests that eventually toppled the head of the Chinese Communist Party.

``At the beginning we underestimated the seriousness of `bourgeois liberalization' among the students,'' he said, alluding to how the the protests caught Shanghai off guard. It took five days to bring the protest under control. ``Bourgeois liberalism'' is the term for ideas that it sees as a threat to its leadership.

Asked about his meeting last December with students at his alma mater of Jiaotong University, where many of the protest leaders were from, Mr. Jiang said he told them why he was opposed to their taking to the streets. He described the atmosphere of the meeting as ``chaotic.'' Other observers have said some students openly debated with the mayor about the need for changes in the political system and the right to air their views freely.

Jiang said that in his talk at Jiaotong he warned the students that a few ruffians could easily become troublemakers when street demonstrations occur and reminded the students that there were still ``quite a few'' leftist elements in Shanghai left over from the days of the Cultural Revolution (1966-76). He also argued that the city was too congested for street protests and that they would interrupt economic activity.

Jiang recalled seeing excerpts from Abraham Lincoln's Gettysburg address, in Chinese, on posters on university bulletin boards, a speech he said he had to memorize as a middle (high) school student in the 1940s.

``I told the students they didn't understand the background and spirit of [Lincoln's] speech. And I think they knew little about the Western world, hence they used their imaginations,'' he said.

The mayor also discussed Shanghai's economy and his accomplishments since becoming mayor two years ago.

``I don't think the word `bankrupt' is the proper term to describe the situation of Shanghai,'' he said, replying to a question about his city's financial plight. ``At the beginning of last year, Shanghai met with some difficulties in obtaining raw materials and energy supplies, but we have slowed our speed of economic development and now the pace is steady.''

With 12 million people living in a city that has been starved for investment by the central government since 1949, Shanghai has miraculously kept afloat despite severe overcrowding, pollution, and a crumbling infrastructure. As China's largest industrial and commercial center, Shanghai contributes one-tenth of the country's total industrial output value and accounts for one-seventh of national revenues. Jiang said these proportions are less now than a few years ago, but that Shanghaians should not be jealous of the economic progress of other cities.

``We should quicken our pace to keep up with China's overall economic development,'' he said. Shanghai, once the most economically advanced region in China, is falling behind other rapidly growing areas, such as the neighboring provinces of Jiangsu and Zhejiang.

One of the biggest handicaps for Shanghai's development has been the percentage of revenue that it must turn over to the central government. When Jiang took over as mayor in 1985, the city was allowed to retain only 13 percent of its revenues, which last year totaled 18 billion yuan (about $5 billion). A decision by Premier Zhao Ziyang has let Shanghai keep 23.5 percent of its revenues.

``My proportion is lower than Peking and Tianjin,'' Jiang said, touching on the sensitive issue of how the central government apportions its scarce resources. Jiang estimated Shanghai's share was still 15 to 20 percent lower than other cities', but he gave Mr. Zhao credit for opening the way to Shanghai's renewal.

Despite this year's cutback in fixed investment, required of all local governments by Peking, Jiang said his long-term projects will not be affected.

The mayor's most challenging project has been the construction of a new train station to replace one that has served the city since the 1930s. The municipal people's congress insisted that unless the mayor personally led the construction team, the job could never be done.

``You cannot imagine how difficult this has been,'' Jiang said. It has required relocating 7,300 families and some 200 shops and factories in one of the most densely populated parts of the city.

Other projects include a new subway system and a cross-river tunnel, a water project to reduce pollution, the construction of a new shipping terminal on the Huangpu River, expansion of the airport, and improvement of the city's telephone system. The subway project has benefited from advice from Shanghai's sister city of San Francisco, and carries a price tag equivalent to $540 million.

``We have to do everything in our power to get money,'' said Jiang. This includes taking loans from the World Bank and foreign governments.