China's Premier Orders Curbs on Economic Growth

CHINESE communists opened the national parliament yesterday, struggling with the threat of roaring inflation and worrying about social unrest and regional rebellions.

In his address inaugurating the annual session at the Great Hall of the People, Prime Minister Li Peng ordered a slowdown in economic growth, enlisted local officials to cap inflation and pay more central taxes, and pledged higher incomes for restive farmers nationwide and more help for laid-off workers.

In a message stressing that social order takes priority over economic reform, Mr. Li told the almost 3,000 delegates in the rubber-stamp National People's Congress that stability ``is an indispensable prerequisite for economic development and smooth progress in reform.

``Currently, the government is in financial straits,'' Li said. With inflation at 20 percent in the cities, corruption, and a recent political reawakening, the government is feeling pressure to take concrete steps to dissipate popular unrest. ``State revenues will increase steadily with economic growth and the reform of the financial and tax systems, but it will take a certain amount of time to alleviate our difficulties.''

In the foreign policy sphere, Li also indicated that China is ready to include human rights in its diplomacy. But, speaking just a day before the arrival of US Secretary of State Warren Christopher, the premier cautioned that China would not tolerate pressure on human rights. ``China values human rights and is willing to discuss the matter ... on the basis of mutual equality. However, it will never allow anyone to interfere in its internal affairs.''

Mr. Christopher will make a four-day visit to Beijing starting today to discuss the future of China's trading privileges in the United States amid mounting tensions over the recent roundup of about a dozen Chinese dissidents. The Clinton administration must decide by June if China has taken enough steps to improve its human rights record and warrants extension of its unrestricted trading status in the US market.

But the most compelling focus of the two-week session will be the threat posed by roaring inflation to economic and political stability. Earlier this week, China cautioned that the double-digit inflation was running dangerously high and ordered price ceilings on key goods.

Economic chaos worries the leaders who blame high inflation for the 1989 Tiananmen Square democracy protests. In the last year, China has also been hit with a series of farmer's protests against skyrocketing prices and has watched a resurgence of political dissent. The leadership is split, as factions jockey for position anticipating the death of leader Deng Xiaoping.

Li, a political conservative, set out the near-impossible targets of slowing 13 percent annual economic growth during the last two years down to 9 percent and enlisted officials to help hold inflation at no more than 10 percent. ``It will be an outstanding achievement if we can keep [gross domestic product] growing at 8 or 9 percent for a few more years,'' the premier said.

But that will depend on prodding China's increasingly defiant provinces to restrict growth and cap new construction projects and development zones, lucrative sources of corruption and bribery. Chinese economists say that according to press reports, the fast-growing coastal provinces have set growth targets at about 15 percent.

People's Daily, the Communist Party organ, scolded regional leaders yesterday. ``Leaders at different levels should regard safeguarding social stability as their own obligation.''