China's Premier Calls for Stable Growth

PREMIER Li Peng yesterday mapped out a plan for the remainder of the century that bolsters one-party dictatorship in China and backs off from the bold economic reforms that enlivened the country during the last decade. In a three-hour speech opening the annual session of China's National People's Congress, Mr. Li pledged to lead China toward a doubling of its gross national product by the year 2000. But he avoided mentioning market-oriented reforms that foreign economists say China must carry out if it is to streamline its economy and achieve lasting prosperity.

"The task of bringing about 'small scale prosperity' in the next decade is undoubtedly grand and difficult," Li told the delegates.

In a rebuke to China's fallen reformist leadership, Li said such a campaign must be "sustained, stable, and coordinated." Economic growth should not exceed 6 percent a year, he said, a figure far below the annual, double-digit pace of the previous decade.

The basic criteria for judging future reform, Li said, is whether it "contributes to social stablility."

"Before we decide to take any reform measures, we must consider whether the country, the enterprises, and the people can bear them in order to avoid a violent shock in the community," the prime minister said.

Socialist training

As part of a battle against "bourgeois liberal thoughts" that could last many years, China must promote "persistent and intensive" training in socialism. Only through heavy indoctrination can China quash a conspiracy of foreign subversives, Li said.

In the next decade, "foreign hostile forces will continue their attempts to effect 'peaceful evolution' in China," Li said. "Peaceful evolution" is a catch phrase used by conservative leaders to refer to the West's alleged effort to subvert communism and goad China toward capitalism and democracy.

To further support continued one-party rule, Li says Beijing will raise funding for the police and military. How much the budget will be increased is still unclear, but Li indicated that much of the new spending will go toward high-tech equipment and weaponry. Hong Kong newspapers have reported that China will increase military spending by more than 10 percent, despite a budget deficit.

Li justified the higher budget by referring to the collapse of the "old international order" and the rise of "hegemonistic politics" in the past year.

He called on all foreign powers to withdraw their troops from the Persian Gulf.

"Each country should have its own right to choose its social, political, and economic system and road of development," Li said. "Countries, in particular the superpowers, should not interfere with the internal matters of other countries."

Sino-US trade

In a direct reference to the United States, Li said that Sino-US relations would be harmed if Washington revokes the preferential tariffs China enjoys in trade with the US.

Without most-favored-nation tariff treatment, Beijing would lose billions of dollars in foreign trade. It would also face the prospect of labor unrest, because thousands of exporting companies would have to close down, foreign economists say.

The Soviet-trained premier offered few concrete ways to solve China's most pressing economic problems.

Li issued a general call for austerity as a way to reduce the budget deficit.

He skirted the issue of whether China will reduce massive subsidies on basic foodstuffs and raw materials that Beijing considers a keystone to public order.

And while one out of three state-owned industries operates at a loss, Li announced that the state should merely merge them "on the basis of equality, mutual benefit, and voluntary participation."

Li indicated that Beijing still has not devised a plan for regaining powers from various regional blocs that threaten its control over the economy.

Under reform, various regions amassed powers in taxation that the central government has been unable to recapture. Regional officials have also erected barriers to the goods of outside companies in an effort to protect native industries.