JPRS ID: 10261 CHINA REPORT ECONOMIC AFFAIRS

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• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000500020030-1
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 17
• Document Creation Date: November 1, 2016
• Sequence Number: 30
• Content Type: REPORTS

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- JPRS L/102~61
19 January 1982
- China Re ort
~
ECONOMIC AFFAIRS
_ CFOUO 1 /82)
FB~~ FOREIGN BROADCAST INFORMATIO~I SERVICE
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JPRS L/10261
19 January 1982
CHINA REPORT
ECONOMIC AFFAIRS
(FOUO 1/82)
CONTENTS
- PEOPI,E' S REPUB?,IC OF CH?:. A
1VATIONAI~ POLICY AND ISSUES
= Report on Japan-PRC Economic Cooperation
- (~ditorial; THE DAILY YOMIURI, 19 Dec 81) 1
- FI~IANCE AND BANKING
Necessit3r of Balancing Budget Discussed
(Y~shio Matsui; THE DAILY YOiMIURI, 21~ Nov $1) 3
Inflation Running Out of Control
_ (Yoshio Matsui; THE DAILY Y02~IIURI, 17 Nov 81)...~............ K
Banks Begin Bac king Business Investment
(Yoshio Matsui; THE DAILY YOMIURI, 27 Nov 81) 7
~ Growing Government Reliance on National Bonds Seen
(Yoshio Matsui; THE DAILY YOMIURI, 3 Dec 81) 9
FOREIGN TRADE
Japan-China Ministerial Meeting Viewed
- (Editorial; MAINICHI DAILY NEWS, 21 Dec 81) 11
LABOR AND WAGES
'Wenming~ Replacing Old Ideology
- (Masaxu Maruyama; THE DAILY YOMIURI, 6 Nov 81) 13
- a - (III - CC - 83 FOUO]
~nn nr,r.t~T ~ r n~n v
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NATIQNAL POLICY AND ISSUES
~
P.~PORT ON JAPAN-PRC ECONOMIC COOPERATION
_ OW220237 Tokyo THE DAILY YOMIURI in English 19 Dec 81 p 2
[YOMIURI SHIlKBUN 18 llecember editorial: "China Must Help Itself"]
[Text] r'rankly, the Japanese side was somewhat cool toward the seco,rid Japan-
China miaisterial conference held in Tokyo, not only because it was a structured
meeting, but chiefly bE~ause Cliina has tended to change its econom3c policy
drastically.
Chinese. eco~.~mic pol:icy shifts were particularly pronounced this year as the
country tried to cope with financial deficits and inflation. Emphasis shifted
~ back and for.th from heavy industry to light industry. As a result, China
canceled import order,s for large amounts of Japanese plant equipment.
The extensive Chinese policy changes not only stunned the Japanese business
community, bu* also jolted the Japanese public's general conf idence in China.
Sometime last summer, the Chinese got their economic program back into shape
and again placed importance on heavy industry. Meantime, the two countries
have reac:hed a settlement of the plant import cancellation problem. Japan
has agreed to provide yen 300 billion in credits.
Unstahle Factors
However, this agreement has not restored mutual confidence.
Although we have no intention of ineddling i.n China's domestic and international
e~.conomic affairs, we suggest that China itself has already realized that
o~~erabrupt changes in policy have a negative effect. In this connecti~n, we
must note that Ch ina must he deliberate in seeking Western partners i.n its
modernization program.
- TherF are several other unstable elements in Sino-Japanese economic relations.
One of them is the correctian of the trade imbalance in favor of Japan. A steady
- increase in Ghinese coal exports to Japan is essential to erase China's trade
- deficit. But prospects of this ha~pening do not look bright.
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Another problem is that China has not been making efficient use of Japanese
yen loans. Prior to the latest bilateral conference, the Suzuki administra-
tion decided to extend China yen 60 billion in yen loans for the current
fiscal year.
This step represented support for the present Chinese leadership from a political
standpoint. We endorse this move. But we regret tt?at China is not putting
these yen loans to good use.
Chinese vice-premier Gu Mu told a press meeting that Sino-Japanese relations
would progress well when Cr.ina's rich natural resources and Japan's money
and technology are combined.
Chinese leaders have often made such statements, but they reed to recognize
that th e main responsibility for China's economic development rests with China
itself. Japanese assistance is fruitless without proper Chinese economic
management.
We wish to see China make econom3c progress and for this purpose it must go
ahead with appropriate reforms.
COPYRIGHT: YOMIURI SHIMBUNSHA 1981
CSO: 4020/63
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FINANCE AND BANKING
~
NECESSITY OF BALANCING B'JDGET DISCUSSED
Tokyo THE DAILY YOMIURI ii? English 24 Nov 81 p 5
[Article by Yoshio Matsui]
[ T ex t] ~ere is no country in ~eame up with a plan to
the world wher~e people Sntroduce en income tau ,
iike to pay taxes. But the ior lndivldual citizene.
Chinese peoole especially There an lncome tax in
dislike taxes. Chlna but it is imposed
Zuo Chuntai, director of only on people with very
- the secretariat af the large incomes, including
Flnance Ministry, whom some fo:eigners living tn
thls reporter met at his the country. The govern-
offlce in Peking, ahrugged ment planned to levy a
and said: "We know well, lower income tax on cit!-'
that our prCsent taxaLlon zens of lower and middle
system does not 8t Lhe income bracketa.
actual conditions. But me ' gut this plan also xnet
can do nothing about it:' strang opposition irom
About three years ago citizens. "Some citizens
the FYnance juiinLstry hit went so iar as to say that
upon the idea of imposing they would rather forego
the registratton tax of two wage fncreases tYian pay
to three yuan (one yuan the tax," Zuo said. So the
equ~ls about ~13) on government . dropped the
bicycle owners. it is est!- plan.
mated that there are about ~e Chinese C~overn-
- 100 million bicycles in ~ent's revenue conaists� oi
China. its income from taxes and
1 ACOme T ax some of the pro8ts of en-
When the ministry's fdea terprises which go into the
- became k~own to the pub- government's exchequer.
lic, however, people opposed The government's revenue
it vel~emently, saying: "Ia !s equally divlded lato these
Lhe government lust talk- two categorles. Yt gets 50
ing about Etiving priority to ' btllioci yuan from the taxes
fmproved living conditlons and another 50 blllSon
nnd not really doing so?" yuan from the proflts of
and "Levying taxes on enterprises.
Ulcycles is a matter of llfe The major tax in China
or death to us." Stung by 1s a commodlty tttix called
the outcry, the F'lnance "lndustry and eommerce
Mlnlstry dropped the idea Lax.' If goods sell well, the
in no time. ' government's incnme from
Thrn the government the taX collection inereases.
8lnce goods are in short
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from a number oi factor~
supply, however, the gov- such as decrenses 1n the
ernment's income does not government's income and
increase as much us the Hasty Poiicy the execution �oi many new
- workers' lncome does. ' All Chinese government policies. The government,
Besides, the tax rate is leaders whom thls reporter however, covered up these
high for luxury goods and met sald tl-.at the deflclt 1n factors, except excesslve
low for goods classifled as the government's budget investments, and reduced
dally necessitles. '1'l:erefore, resulted from excessive in- funds for lnvestments in
an increase in consumer vesta~ents in faciori pquip- flscal 1981. The amount
spending does not result in ment, in the development corresponded to 45 percent
a co:responding rise in the of mir_es and civil engin~er- oi that in the previous
government's income. ing and construction proj- flscal year.
What about the proflts ects. They added: "We were $ut to say the govern-
of enterprlses which So too hasty !n modernlzing our ~ent made excessive in-
into the government's ex- country: ' vestments ir1 past yeara is
chequer? The proflts may Certainly, that is part of not fair at all.
increase over a long period the reason behlnd the fln-
ancial difficulty facing the Priority ~ro~eCta
of time. When seen irom
the short-range vtev~~point, government. Take the gov- . The . main road leading
however, they do not, ernment's flscal 1980 bud- irom Guangzhou to Mecao
Sharing Of Profits Bet, for example. The gov- !s rough and b{impy. And
The amouut irom proflts ernment origlnally planned there are no bridges over
given to the government !s to spend 50 billion yuan ior four rivers runnio Be a~ust
decreasinB . at present, be- lnvestments in various in- the road. So ' pe F
cause enterprlses are ex- dustrial projects. But it use ferries to crosa the
panding their riBhts and a lion yuan for tkia tpurpose. androt
er facalUt es in China
system under whtch theY The extra 4 billion yuan not only inconveniences
keep mnch of their proflts spent by the government people but also hampers
in their hands has beBun contributed to !ts deflcit. economic activity.
to take root. But this is not the only fac- Vice-Premier Wan Li said:
Under these circum- tor involved. "Although we are cutting
stances, the amount has not
been lncreasing during the Let us examine the new investment, we will glve
past several years. FiBures pollcies that the govern- priority to Proiects ior road
been dec ea
ing inst adh~ pa tt threee years aIti raised devel pment " a BW~e rietihe �
That !s not a1L Since the prices at ahich it buys total amount of invest~m~e~nt
1979, the government has agricultural products from has been cut greatly,
been carrying out many tarmers. The government ever, the govemment can-
new policies which require granted subsidies to the not spend much on those
much outlay. As a result, people's communes to en- proiects, ever~ if they are
the government has gat able them to reform them- given priority.
into the red. The amount selves. It ulso granted sub- The budBet of a govern-
oi the de!lcit in the gov- sldies to enterprlses in the ment is something which
ernment's budgeL was i7 light industries. And the must be balanced well. If
billion ynan in 1979 and 12 for ecity workers, aThe eaare and its exp nditure are ot
billion yuan in 19~30.
The de8cit ~orresponds to numerous such examples. balanced and the govern-
a little over 30 percent of The wage increases in- ment's money is nat spent
the budget. The rate ot de- cluded those called "pay- isirly, the budget would
Scit is lower than th~! ::cnts to retrieve the honor collapse. If the people do
the Japanese C3overnment's of persons who were de- not like to pay taxes, then
budget. But it can be said famed." These wcre made the govemment should alow
that the situetlon is much to people univstly criti- down its work to lmprove
more dlfticult !n China, cized or demoted during their 11v1ng conditions.
since the deflcit resulted the cultural revolutlon and The Chinese Ciovernment
lrota decreases fn the gov- amounted to more than 1 cannot expect to rehabili-
ernment's revenue. billion yuan-no: a small tate itseli flnancially and
In China there is a ten- sum. lower inflation if it 1s con-
dency to single out une The Chinese Govern- tent to regard investments
factor, whenever something ment's budget deflcit has for vartous projects as vil-
. gces wrong. This tendency resulted not only from ex- lninous.
is evident in the case of cesslve investments but ~ .
the So~~ent's deflcit.
COPYRIGHT: DAILY YOMIURI [1981J
CSO: 4020/62
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FINANCE AND BANKING
IN~'IATION RUNNING OUT OF CONTF.OL
Tokyo THE L1P,ILY YOMIURI in English 17 Nov 81 p 5
~Article by Yoshio Matsui~
~Textl Misleading Figures
There ~re four kluds of
prtces for consumers in The flgures show that
Chfiil tod:~y. The flrst ls prices went up conslderab-
' thP officlllly flxed prlce for ~y lnst yeur. But it seems
all goods. The second is that these fl~ures do not
thr pric:e w'htch Ls Set tell the whole truth. The
through bargaining beta~een statistics are based mostly
sellers and buyers as a re- on the oflicially fixed
sZ~lt of the demand-and- prices, with some iree mar-
supply situution. These get prices being added to
prices are for goods like them. The ordinary people
farm products which are are x~uying ~most goods at
� sold at free markets. the free market pr!ces,
- The third is the black- a.hicli are much higher
market prlce. The fourth is than the oPlScially fi;~ed �
the price for foreigners, prices. They fee: that prices
- a~hich is markedly high� rose bS Sar more than six
Bi~t the price for foreigners percent ]ast year.
has nothinK to do aith the ~ Lanlan, a 36-year old
cc,mmo� pcople !n China, of housewife and textile work- '
rourse. er of Chengdu, Beng YuKui,
There are t.hree kinds of a 56-year old retired worker
prices for the common peo- of Chongqing, said precise-
Ple and it 1s ~~Fry d!tfleult ~y the same thing about
to 4e11 wiiich prlce Ss the ~h~ im~~act of the prlce
mal one. R~~sides, thcre tipfral on thelr llves. They
_ nre marked reFfunal dlf- said: "Prlces certainly hnve
terences in the prices of Rone up. Two Yenrs ago
E:uods. In short, prlces in the monthly llvln~ expenses
Cl~ina ure 1n a E;rcnt denl of a person nmounted to
of roniusion. � only 20 yuan ione yuan
- Onc thin~ it however equals ubout 3~130) or 25
ccrt.nin Lhat pri~cs of all yuan at the most. Noa� a
Foocls are F:a1n~; up. In person needs at least 30
A~~rU this year the Nation- yuan a month to make both
nl St~ti~tics Aureau 1n- ends meet, no matter how
nounc~ed fiK~ires coi~cernl~~~; much he maY cut his ex-
F~r1c�r incrcuses for the flrst penses."
Llrne, saying t.hat prlr.es If this is r1Fht, it mcans
ruse bY 8.l percent li~ that prlces rose by 20-25
cities and Jumped by an pcrcent durlnF the past two
nveraKe of stx ~'~ercent in years. The two aforesaid
the entlre country in 1980. persons said that prices in-
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creased especially for pork, tween 1970 and 1978 the works mucn more than the
chicken, eggs and marine purchasing power of the Japanese people cun imag-
p;oducts which the Chinese. Chtnese people increased by ine. Price increases have
partake as side dishes in an average of 9 billion yuan begun to level oii since the .
eddition to rice. These are each year," the acndemy beglnning of this year.
_ the kinds of food that the said. "In ~979, howevcr, the Di~tCUlt TO Control
can~mon people need every- purchasing power increased But inflation is something
day. So the rise in prices by 32 b1111on yuan. And in Wp~ich 1s most diftlcult to
of daily necessities !s very 1980 it inereased by 35 bil- control. Even 1f the prlce
- hard on them. - ]lon yuan." spiral !s checked for some
F'actors Responsibfe Brsides issuing more time, prices wfll begin
It. used to be said that Paper nionep, the govern- ed;ing upward agatn !n due
- tliere ~~as no price spiral in ment took a seri~es of eco- course. ii the government
China. Why, then, has in- nomic liberalization mea- tries to control prices for-
flation started so suddenly sures. The governmerat lib- ~�~b~y, the price spiral sud-
in the country? It has eraltzed economic activit:as ~enly shoots upward once
- much to do with wage in- in order to make the p~�ople the w~ei~ht whlch !s put on
creases for city workers and more eager to work. Thls 1t is lif~ed.
the hike in the prices at resulted in the people not Xu Dixin, vice-president
which the government buys only becoming more ea~er of the Academy oi Social
agricultural products. : hese ~ work but also becoming gciences of China, said:
two developmcnts occurred ~ore anxlous to do things ~~After all, it is necessary
in 1979. Another factor is a'hlch pushed up prices. ~ eliminate the deficit in
thc bcx~m in investments ECOAOn'IiC ~edsuTea the government's bud~;et
v~~hich has been going oi~ Under these condltions, 1t and to increase the produc-
SincN 1978. is quite natural that black- tlon of Boo~ a'hich are in
All these developments marketing and tlie illegal ehort supply noa~." He is
resulted in a sharp increase sale of goods became apparently aR~are of the
in the government's ex- rampant. Nowadays there fact that forcihle tneasurrs
penditure and the govern- are many .newsnaper reporta alone cannot put an end to
ment ended up� developing on such matte: ~ as an old inflation.
a deflcit in its budget. On woman in Shar.ghai beine Xu also said that Y~e ex-
top of that, the government arrested aiter many im- perienced a very bad infla-
covered most of the deflcit Ported watches were found tfon a~hile living in Chong-
by issuing more paper in her inside pocket and a quing during the 1930s a~hen
money. young man being arrested Cliina was under the rule
To begin with, Chlna is for trying to sell 212 sllver of the Nationalist Party.
colns hldden in h1s money "In Lhose days workers
u country R�here varlous belt. ran to a shoppinR district
~oods ure in short supply. gecoming impatient, the as soon s~s they got s~laries.
D' .turally, too much money qovernment � ordered the C}oods disappeared irom
being clrcula:;~ in the ireezing oi prices last De- store shelves in a matter of
coantry Lrlggered in!~ation. cember. The State Councll minutes;' he saYd. "People
J?Yan plugued by an "im- serit a notice to local gov- never saved money and
ported inflation' resulting ernments, saying that on they became dissolute . �
from increases in the Pri~e and after December 7 the Of course, the situation is
of crude o11. prices of certain goods better today than in those
The inflution in China is should not be raised. Tt~e years. But if we do nothing
of a different kinct. It is a p~ple could not laugh ofl Lo improve the situatlon, it
typical case ot "p1Per the move by saying tha: can become as bad as it
money inflution." the notice aas just a pfece v~~as before. We should not
Vl'ith much money in the;r of paper. allow the tnflatlon to be-
pocket.~. the Chinese are The Chlnese people ore come worse."
now~ very eager to buy ~ed t~ being controlled by There is no ~ioubt that
goods. This is evident irom the government. A notice the present price spiral and
a~hat the Academy of Social sent by the government the resultant confusion is
5clences of Chlna said. "Be- ~ the Achilles' heel oi China.
COPYRIGHT: Daily Yomiuri 1981
CSO : 4C~20 /41
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FINANCE AND BANKING
BANKS BEGIN BACKING BUSINESS INVESTMENT .
Tokyo THE DAILY YOMIURI in English 27 Nov 81 p 5
[Article by Yoshio Matsui]
[Text] . g~~ machines and other ,~ggreasiDeness oi "lnterest" on loans wa~
equipment' at China'a fac- ~at has made those left unexpiained ' tc the~
tories are mostly old- leSppnsible ior managinB Chineae people unL11 re-
_ fashioned, plant and equip- cently.
ment investr.ient campalgns Planta so aBBresslve Sor iti- At one time, Chines~ of-
vestment? flciala used to ask vlsitin
are in fuil swing in the , I~ ~ay ~ partly due to
light industry sector that the onBoing "autonomy ex-. Japanese buslneasmen auch
is being given hlgh priorlty pansion movement" ior. in- a 9ueatton in all serious-
in the tndustrial "read~ust- ~~dual enterpriaea. nees aa: "How can it hap-
ment" instead oi heavy in- gut it seemed tliat the Pen that money' is able to;
duatry, increased enthusiasm was beget money?, although'
i Xu Xlxlang, chief o1 the primarlly and directly re- t~s, of course, la never the
~ state-run First TV $et sultinB i~m recent im- !n today s China. ~
~ Manufacturing Factory in rovements in China'a C h 1 n e s e (~overnment'
i Chengdu, Sichuan Province, bank loan syatem" - ieadeis, !or thelr part. have~
j said: "Nem additi~ns to our ~ lact, both oi the two �O~~auy CO~ out ~with a'
~ production facilities are "switch in priorities irom~
plants mentioned above r~~ for publlc Snance to i
I ~now in progress. Given the have obtalned 440,000 YUan
new ~'~facifltles, our output ~ane yuan equgls about bant loans ior 8nancing;
I pro~ected lnvestments. '
I oi ~ s~t~~ Rrhich in 1980 ~130) and 1,000,000 yuan, ~~~ana should be prefer-
wea SS,000 units, wl11 iump respectively, fn bank loans
to 100,000 ' per year." red to government-granted
i for lnveatment purposes. I fu~ds;' said an o2~c1a1,
~ "In the innovative eSorts
I to improve our iactory, we MaOtst Dayi "because enterprlses are
' have learned a lot irom Although there dld ex1 bet~r motivated to raise
the latest plant of J~pan's ~t a bank loan system their productivity and ef-
~ Vlctor Company," he said. even in the Maoist days~ balck the~loans.eT ~~y
~ ~ Zeal for fnvestment was the amount of lbank loaz~ i
also evldent in a silk available was limite6 and Setup Improved
fubrica plant 1n the pro- industriea enWtled to getl In line wlth the govern-
vinclai caPltal, which ia bank loens were also re~ ment encouragement. the
not run by Lhe state but stricted to a handful. one-time heavily intricate
was establfshed through Under the too riB~d~Y 8etup of Chinese tlnancial
merger of ]ocal factories planned Chineae eeonom~ inetitutlons has recenLly~
ior jolnt management. before the adoption oi~ been streamlined remark-
The vice-director of the the read~ustment program~ sb1y.
plant, Wu Derong, said: there m.ight well have been~ Fallowing the slmpliSca-
"We are considering intro- little atimulus !or gi`?1ng~ tion of loan procedures,
ducing shortly Lhe latest rlse to the very idea quite~ publlc works-related loans.
models of machines aa well common to Free World~ from the Ministry oi Fl-
ss making subatantial in- countrles: borrowing money; nance, ior .example, are
vestments in a variety oi irom banka ior investmenL ~ng iunneled Lhrough
programs for dlverslfying purposei. ~ i the People'a Construction
designs of our products." Ia additton. the aotion g~k, ahile lndividual en-
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than 5.04 Percent tne bank
terprisea sre supposed to Fledgling Stste charBes for 1ts loans for
borrow irom the People's ~le Ctiina's money apeTational iunds, thus
Bank. ffiarket has thus been set ~~~g r~e tp the so-call-
Thanks to the procedural ~~otlon, it certatnly 1s ed ~�adverse spread:'
reform, banks themselves in a Sedgling state. ~S can hsrdl9 be con"
have become increasin8lY goth banks and bormw- sidered normal, although
willing to extend loans. ers are apparently behav-
A recent report by ~e ing cowardly, t,ending to ~u Yansun, director ot t e
Wuhan branch oi the p~- n.~.nimi2e Lhe smounta o! bank's savin8 department
ple's Bank on its follow- ~oans and the terms oi re- arBued that there fn fnct
up investigation of 4~ demption only for the safe- was no adverse gPxeBd ~~as
we set the deposit rate for
cases of its loaninB ~YS ty of thelr money. .
one of the enterprises Hanks have turned to enterprLses at 1.8 percenL
which are loaned by funds per annum, compured to
� what they call the "three- that ior individuals at 5.4
the bank made proflts at ~~t ~fety principle": ~~ent "
u rute of 10 yuan per one ~~g prio~ty ~ small- Ad~tting that Lhe ex-
yuan it borrowed, slmP~Y a~ount loans rather than i8~g money rate structu~re
becuuse the enterprise went large ones; ftlving prefer- could functlon as long as
nll-out to rept?Y the loan." ence to ahort-term loans ~e quantities of loans re- ~
A1th~uBh the report over long-term ones; and S~ll ~~ey pre-
should be taken wlth some loaning more for eQu1P- Sently are, it might even-
reservu~lon because ~t ment investment than for tuslly aSect serlouslY the
covers louns only for pro- operatlAnal purposes. bankfnB buaineas wlth in-
duction equipment invest- ~e pri;~ciple obviously ~~o~ in the
ments in the light-lndus- Shows Chinese banlcs~ P~�''-
try sector, there now is liarly cautious attltude to- ~p~~ a va~ety oi such
' littl~ doubt that bank a�ard lendtng: ~~g problems, it is evidenL that
loans in China have be- ioans to small amounts and ~e bank loan sYstem 1n
gun to move smoothly. drawing them 1n duri~?6 C~a h~ graduaUy been
With Lhe increase !n shortest possible periids =
i t~,~g ~t.
bank loans, a system for lending money maln Y IL ~y $aiely be aald that
"solvency screening" of solid investments !n equip- C~a y~ Weu advlsed
loan requests also has been ment. ~g~ good c~re of Lhe bur-i
put into pracLice. Because of Lhis safety- ge0~ng bank loaas.
According to Qiu Char.g- flrst principle. a great Be~ore the recent growth
yao, vlce-director in charge majority of bank loan bor- of bank loans, lnvestment
of loaning at the C3uangz- rowers are satd to be state- ~ pro~eC~ were mostiy fl'
hou ~Canton? branch of run enterprLses. nanced directly by the Bo~'-
the People's Bank, enter- For examPl~�~ ~'~rc ~11An ~n,.nent, so that thoseR~th
prl~es desiring to get loans 90 percent of lo:~ns beln~; te~~,~e8 and 8roups
are asked withovt excep- extended by the puu~~Fz' bigBer voices or connec-
tion to submit written ap- hou brnnch of the p~~p~~'~s tions 'avith Ba~~'nment
plications, with trie htgh- gank are for state-run en- leaders, irrespecUve o~
est importance in Lha terprises, according to @~u� their business ahowln~:s.
~ screening glven to purposes Under the clrcumstances, ~nded to Brab unreason-
ior which the .enterprLses the avovred poUcy of thlnk- ~b~y larBe ��portlons of
are Roing to use the bor- ing m~~ch o1 "enterprlses t~~ available.
roaed funds. under collectlve mena~~- ~e more banlc loans are
'~Needless to say, the ment or tlioae run by in- u8ed ior raisin6 lunds for
would-be borrowers' repny- dividuats" !a no better than investxaents, ~e ~On �p
ment plan.~ as well as their a slogan which hns YeL port~ities maY be B~ven
business showings and in- ~ be echieved. , ~ place the bustness Pef-
ventory-sales ratios are MpnEy fjate formencR of each enter �
taken fnto consideration," prise undes imParW~l and
he said. Furthermore, the money ~1 ~e~~ent by bnnkers. ,
In case of borrowera rate structure of the Peo- w~ch in turn would great-
fatling to pay back the ple's Bank is something ly help enterprlsc~ and
loans when due, a 20 per- irreBular, aa the inLerest a~eT productlon untts 1m-
cent surcharge is levied, on one-year flxed deposits prove thetr ettlcienc~ . �
Qiu added. with the bank ls se: at 5.4
percent per annum. 3afBher.
COPYRIGHT: DAILY YOMIURI [1981]
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FINANCE AND BANKING
_ GROWING GOVERNMENT RELIANCE ON NATIONAL BONDS SEEN
Tokyo THE DAILY YOMIURI in English 3 Dec 81 p 5 _
[Article by Yoshio Matsui]
[ Text ] ~is year the Chinese underWriting of the bonds only four percent per an-.
Government issued nation- progressed qulte smoothly:' be~nsato red em them flve
ul bonds amounting to 5 Even the Wuhan steel e~rs after they are lssued.
billion yuan (one yuan plant, which !a having y
equals about ~i�1301. It waa ~ancial difficulty result- The government chooses by
the 8rst ttme in many ing from _ the goverfiment's lot the "bonds to be re-
~ years that the governrnent policy of adJusting steal deemed.
had talcen such an action. productlon, has underwrit- But the interest ratQ of
This was an epoch-making ~n national bonds amount- four percent is relatively
event because the previous ing to 30 million yuan by high in Chlna, considering
issuZng of national bonds using part oi its savings. that the interest rate on
had taken place in the part Of Assets citizens' ~deposits in the I
dist~ant past. . ~seople s banks ls extremely
There is no problem in Tang Zongze, director oi low-1.8 percent per an-
getting the boads under- the accounts o~ce ~of a num. So national bonds tn
written be~suse the gov- watch manufacturing cor- China are an "attractive
ernment practically allots Poration in ChongquinB, merchandise," so to speak.
them to various osganiza- said: "We eagerlq bought y~gue Details
tions. Zuo Chuntai, director naUonal. i~wnda tota11n8
- of the secretariat of Lhe 4~�~~ wan. We reaard Yet China, unlike Japan,;
F'inance Minlstry, said: them as part of our assets happens to ~th~ e Chiwnese
- "Almost all natlonal bonda He would not have sald Government's bonds which
have been underwritten by that the bonds were Part have been bought by vari-
local governments, enter- of the corporation s$~e~~ aus organizatlons? This re-
prises, maior people's com- !f he did not trust the rter asked an o81cia1 of
munes and other or~aniza- government at all. He said '~e Chiriese ' Finance Min-
tions. So far, no lndiviCUal so, because he trusted iatry.
has been allowed to buy governmerlt, even though
natlonal bonds." the bonda were allotted to Here are some oi the
For example, Shanghai the corporation by the questions and answers that
City wss aliotted national Bovernment. His statement we exch~nged.
bonds f,ot.alfng 400 million showed that natlonal bonds ~s the government
yuan. Of Lhia totai, 300 were being accepted well permit various organiza-
milllon yuan were allotted and Lhe Chir_ese peoole tions to resell national
to flrst-rate enterprises have begun, though Bra- ~nds?
and people's communes in dually, to trust their gov- ~~We are considering that
the clty and the remaining ernment. ~ now:'
_ amount was underwrftten Like nationst bonds in ~n't there the possibllity
- by Lhe munfcipal govern- Japan, nattonal ~n~ of an organizatione going
i ment. lssued bq the Chinese Cio~- bankrupt wlth natlonal
Zhang Feng, chairman oi erntnent are good ipr 10 bonds?
the municipal economic YealB� But nation~l bonds
commitLee, sald: "There in China are diSerenf, from "The situatlon has not
were almost no problems. those in Japan in that the yet reached that stage:'
The negotiations for the rate oi interest on them is Is there a system under
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which the governm?nt buys ~ eXpen
p ure, tt e eis will main caus s for in8 tion. e
up national bonds.
"Vtle are considering that be no problem. But that is ~erefore, it is ir'~eaninp
not likely. So the govern- 2u1 to lssue a ce~~`Q
too" ment must Snd a new a~ount of national bonao.
- In short, the details o! S~urce af income to operate ~ reporter expre.~sed
_ the national bond plan i~,budget. this view to faculty mem-
have not yet been worked , reporter feels that bers oi Fudan University in
out. The Chinese Govern- the government should in- Shanghai, which is one of
ment lssues national bonds troduce a normal national the famous instituttons of
without, declding what to ~nd plan. The govemment ~gher learning in China.
do with them in the ir:ture. shauld also consider Sssuing gut Wu Pailin, a proiessor
Small wonder the bonds bonds to raise money to at the unlveraity~s econo-
were issued no+, ior the fl.s- build roads and bridges, to depart~ment, disagreed
cal 1981 budget Lut to Smprove and ex~and port ~th the view. �
make up for the deflcit of ~d harbor facilities as �I! the government keeps
12 billion yuan which had well as rlvers, instead oi
developed in the ~scal 1980 ~guing bonds ~ust to make running !ts budget on a
budget. up a deflcit in its budget. deflcit, it will lead to !n-
flation;' he eald. "The
So the government de- It is said that blg floods C~nese people are stlll so
scribes the issutng of ns- in the areas along the poor that ttrey cannot cape
tior.al bonds as "a tem- Yangtze R1ver which occur- ~th lnflatlon. Econ.omist
porary measure." This de- red in 1980 and this year J~hn Maynard Reynea' ldea
scriptton ls correct. For the -resuTtcd irom thc fact that ~ of expanding the economy'
government d1d not issue mountalns ln Lhe areas hnd by strengthening the na-
any national bonds for the become treeless becuuse of ~onal flnance may hold
fiscal 1981 budget. The gov- the government's futlure to g~d !n Japan but it is not
ernment reduced the size c&rry out aPforestation pro- necessarilq good 1n our
of the budget iar the cur- ~eC~y, ~s means that the country. ~
rent flscal year by dras- government must make ~n- ~~Certainly, it may be
tically curtailing its invest- vestments !n aSorestatlon d~$erous for us to view
_ ments. and other slmllar pro~ecta. China as a country wlth a
~ Income ~Source Surplus Money population of 1 bilIIot~ ~n
Certainly, it w111 be good glnce the savings oi tre the same way we vlew Ja-,
if the government's budget Chlnese people are increas- pan, whlch haa a popula-
is balanced well and the ing eharply, it Sa qutte ~=^n of only 300 million," he ;
- government can do without possible ior the govern~ment added.
issuing national bonds.. But to issue about 5 billion yuan But thls reporter could
is that possible 1n China7 oi national bonds each ~not give up the idea that
China cannot stop its drive year the Chlnese (3overnment
for 11ber~lizsition. The pres- National bonds serve the should consider . ~ssuing a
sure for increases in the purpose of sbsorbing inW small amount of nattonal
- government's expendlture the national exchequer ~nde, because . China ~
- w111 grow lurther in the money which ia !n abun- lagging in investmenta in
future, even though China dance now. In China today ~~tructfon proiects~ the
is a country with a Rovern- are in short supplq Bovernment revenue 1s de-
ment which !s goad at con- although the people are creasing and inSatioiz ie
trolling the people. eaBer to buy goods� This tightening !ts grip on ~
If the government can means that there .is too the country because o! the
obtain an enough revenue much money fn �the coun- shortaRe of ~ooda _`-J
COPYRIGHT: DAILY YOMIURI [1981] ~
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FOREIGN TRADE
JAPAN-CHINA MINISTERIAL MEETING VIEWED
- OW231051 Tokyo MAINICHI DAILY NEWS in English 21 Dec 81 p 2
[Editorial: "~ino-Japanese Economic Ties"]
- [Text] Japan and China have concluded their second ministerial meetin~ in
Tokyo after reac~hing an agreement that Japan would extend 300 billion yen for
China's construc`ion of the Daqing petrochem3cal complPx and the Baoshan
steelworks, and also 60 billion yen in loans for the current fiscal year.
Regular ministerial meetings are essential for the deepening of mutual under-
standing between the two governments' leaders. Since the first� ministerial
meeting, the Sino-Japanese relations have been at a low ebb to some extent due
to the Chinese annulment of the export contracts of Japanese industrial plants
or its postponement of the plants.
The latest m2eting was expected to offer a good chance for the two countries
to restore a strong relationship. Th e signin~ of the Japanese extension of
funds for the construction of the i.ndustrial plants met such an expectation,
putting an end to the disputes resulting from the Chinese annulment or post-
ponement of the plans. Together with the 60 billion yen in credits, the agree-
ment is expected to open new prospects for bilateral economic c~operation in
the future.
During the two-day conference, the Chinese ministers repeated criticisms of the
Soviet hegemonism and reconfirmed their basic poltcy for Che impro~~.ment of
cooperative relations with Japan and the United States. They said that China
wanted to cover its shortage of funds with the introduction of foreign capital
for the promotion of its modernization programs.
The Japanese counterparts expressed their readiness to cooperate actively with
the Chinese economic policy. We believe it quite reasonable for Japan to
support China as long as China maintains an open economic system aimed at a
stable development.
It is too hasty to conclude that the two-day meeting could completely erase
mutual concerns and helped the two countries to take new steps for stronger
- relations. We cannot deny the existence among the Japanese economic circles
of a deep-rooted distrust tozaard the unstable Chinese economic policies.
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In his recent policy speech, Chinese Premier Zhao Ziyang said the Chinese
economy had overcome a crisis but added that a potential crisis still remained,
_ adding that China needed five or more years Co complete its economic adjustment
~rifi improve the managerial system.
Difficulties in the economic management are indicated by the fact that the
Chinese Government had been unable to disclose the blueprints of the current
Sixth Five-Year Plan (1981-1985) and the new 10-year program'(1981-1990).
Zhao also said in his report that China planned to triple agricultural produc-
- tion by the end of this century. Some have expressed skepticism concerning
this because, to attain such a target, Ciiina must realize an annual economic
growth of six percent.
Under such circumstances, the Japanese economic cooperation to China must
correspond to the reality of the Chinese economic situation. We do not support
- an idea that the more the Japanese financial aid, the stronger the Sino-Japanese
ties would become. We must remember that an excessively gigantic economic aid
to China would compel Southeast Asian nations to look suspic.iously at the f uture
Tokyo-Beij ing relations.
China and Japan will greet the lOth year in 1982 of the establishment of normal
diplomatic relations and we expect the mutual visits of prime ministers. During
thp past decade, the trade volume expanded from $700 million to $10,000 million
_ and the number of Japanese visitors to China increased from 9,000 to 90,000.
We must maintain this trend.
~
~ The ministers have agreed to have orficial talks, early next year if possible,
for the Japanese import of Chinese oil and coal from 1983 to 1985. The joint
press statement issued after the meeting said that the two countries must conclude
agreements on taxation and investors' protection, and the promotion of the opening
of a regular freight services.
We hope that the two countries will steadily solve pending problems one by one
to further strengthen the Sino-Japanese relationship.
COPYRIGHT: TOKYO MAINICHI DAILY NEWS ~981
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LABOR AND WAGES
- 'WENMING~ 3?.EPIACING OLD IDEOLOGY
Tokyo THE L1P,ILY YOMIURI in English 6 Nov 81 p 5
[Article by Masaru Maruyama~
[Text~
~e Wuhan No 1 cotton- who wea* their ha~r long "WenminB" ie an um-
spinning iactory? is a model or do their work with bare brella tbrm whlch refers to
plant, which was once in- feet loae pointa, thus be- many diserent thinBs, such
spected by the late chair- ~~g meligible ior receiv- as enrlching the communfst
man Mao Tse-tung. W1ien ing the payment in full. ideoloQy~. being reflned in
this reporter visited the , PTinciple Of speech, ob~ervinB sanltation
rules and etiquette. All these
factory, a stafter explained . $piTit First thSngs fall under the cate-
; to me about the achieve- TWp characters represent- ' goTy of "wenming."
~
I ments for which workers at ing wenming are now seen p8 ~~~~t be imaRined,
the iactory received apeclal everywhere at factories and however, the pxpression
allowances as incentlve3. large stOres in China. One sounds awkward. Talks
� of the main points of
One o! the achievements about "wenmfng" tend to
is "wenming . production. China's present economic become abstract.
The word "wenminB~~~ Pro" ppiicy is a sort oi ration- In recent years Chinese
nour.ced by the Japanese as , alism under which it is con- workers have been told that
"bunmei," means "civlliza- sidered silly for workers to the more they work, the
tion." march to their placea o! ~ore money they can earn,
When asked what wenm- employment, carrying . the and this was the principle
ing p~duction" meant, he g,~d Flag. Since the end oi ~ be maintained ~
said that !t meant "be1nB last year, however, the modernize the country. Noa
neatly dressed" or "having principle of spirit-comea-Srst they are being told that
the habit o! putting thinP:: has been . gradually taking spirit comes flrst. They are
in good order at a factory " root in the country again. flnding it difhcult to adapt
= The amount oi allowancea At factories, atorea and themselves to the change.
- patd to workers at the other facilittea where vari- geen from thls angle, the
~ Wuhan No 1 cotton-spinn- ous klnds oi service are Chinese authoritles' action
~ ing fACtory uccounts for 15 rendered, the principle of puttfng "wenming" on
~ percent of the total amount takes the form of "wenming the llst of good deeds by
' of speci~l allowances paid productlon." The prlncipl~e workers, !s qulte clever.
to them for their Bood calls for the promotton They say that apiritual civi-
actiona. Th1s mersna that ai "spiritual culture" as well lization irieana being neat-
eacYe worker judged to be as ~~material eivilization."
carrying out "wenming pro- ly dressed or keeping their
The expresaton bunmef- piaCea of work clean and in
duction" gets 28 yus+n !one k~~a~~ (civilization and ~d prder. Thlp 1s certaln-
yuan equals about 1.30) a enlightenment) was !n vogue ly easy to understand.
year. This is no small aum, in Japan during the early But "splritual civilization"
considering that the average years of the Mei~i era ~q ~~ething whlch is hard
basic monthly salary ot when the wave oi Westem ~ put in Sgures. Is it rlght
workers at ~.'he factory ~s civlllzation swept across ~~e a point syatem t~o
64 yuan. the coun~ry. But "wen- flnd out whether ear,h
Not all workers at the ~ng,' whSch the Chinese worker !s carryi.ng ~~ut
factory are paid the full ta~king about these ~~Wenming"?
amount of the apecial al- days, 1s di8erent Srom the
; lowance, however. Those Jnpanese expression.
- 13 .
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Confusion slogans wrltten on them, named f,he Committee ior
At Factories be~~ there are no Discipline at Stores, were
The wenming movement slogana to be wrltten. A~d keeping a sharp eye on
is apparently causing con- in aome places Wastebaekets staffers to aee if they were
are called ~`We~n~ speaking to a custoaaner as
~ fusion at iactories in vari- basketa ^ As far 8a tact�rles soon as they spotted h1sn.
ous cities which trhis report- are concerned the wenm- in the ~~se oi stores Loo,
_ er visited. It is something ing movement" apparently
the point system Ls used to
like a set of rules ior work- has not yet taken root. judge how iaithful each
era to follow in their daily gut ~~e areas of com- ~orger is ta "the wenming
lives. 8o it is diSerent irom ~el~ and seraices, the
the drive to propagate the ~ovement has been falrlY movement. And each work-
Mao Tse-tung ideology. It e~ective, because in these er gets a reaard in terms
- is also diSerent irom the oi money, or allowance, for
_ principle oi modernization, sectors things like B~d, his contribution to the
= which says that the more manners and good order, inovement.
a persoa~ morks, the richer Lhe virtues emphastzed 1n How well a staPfer serves
he becomes. the movement, can be pnt ~~~mers at the Wuhan
Here are examples o1 into practice, with emplr;ya~ Co~plex of Stores Sellt~
slogans that thia reporter improving the waY ~~h��Y Nl Kinds of Cioods 1s the
found written on posters trcat Lheir customers. equivalent of "Wenming
displayed at some iactories. Posters bearing slogans production" at iactories.
"Let us maintain salety calling on employes to be And the allo~ances paid to
by engaging in production polite to thelr customers, the sLaSers for their Bood
under the prineiple of which were wrltten in red service to customers account
wenming." (Baosan Steal letters, were pnsted on the ior 80 percent of all al-
Plant in Shanghai) walls !n all sections oi de- lowances glven Lhem The
"Observe etrictly the cus- partment stores in Wuhan ra~ ~ g3 perc~nt at the
tom .of aigning your name and Zhengfu, the capltal of 6hangha! No 1 department
when reporting to work or Sichuan Province, ahlch S~re, the largr~t drpart-
leaving the iactory ior the this reporter visited. merit store in thc cit}�.
day." (Shanghai Machine CertainlY, it aas strange _ How to eltminate materi-
Tools Factory) that these posters were dis- alism or money x~orshlp ~�til
~~Let us have great am- played conspicuously at g~adually become a b1g ts~sk
bitions and climb the high places where they could be that must be accomplished
~ peak of acience in the seen by customers as well n the Process of rehabill-
world." (Wuhan $teel Plantl as sta$ers. But I could see Lating China economically.
The slogans written on that the management of For ~nancial reusons, ft is
posters pasted on the walls the respective department becoming lmpossfb)e to P~Y
are a disorderly mixture of stores a�as eager to improve bpecia] sllowunces to w~ork-
raew things and old things. stafiers' service to custo- ers as incentives ior their
They are all abstract. In the mers. good work.
- bygone days there were pnpularity Moreover, tt~ere are siFns
_ "Quotations irom Chairmun Contest that workers aho do noi
Mao Tse-tung' and auch get such allow'ances are
adages as: "Lesm agricul- At a store comp:ex ~n seeking a vent for their
ture from Tachai and learn Wuhan labor unions and pent-up emotfons. �
industry iro~n Taching." communist youth organiza- Certainly, a sense of
(Both Tachai a~nd Taching tions aere holding a pop- ~~SyS promp~d the "aen-
are the numes .~f places.) ularity contest to choose a ~ng ~ovement." But there
Hut now there are no store whose stafters served are indfcations that the
models and idola :o take thefr customers better than movement wSll be incorpoT-
the place of thos~ old 8ny other store fn the com- ated into the system of gf~'-
adagea. plex. ing incentives in materiul
. SttCCess ~n Wang Jianan, vice-prest- termc or will end up becom-
dent of the complex called ing a mere formalism ahich
- seryiCe $eCtor the Wuhan Complex of won't do any ~ood.
There are bnlletln boards Stores Selling All Kinds of IL !s apparently not easr
- covered with cotton dust Goods, said that at each ior the movement 'to takc
- which stand idle with no store in the complex mem- root ~as a system oi apirf-
bers of a watchdog organ, _ tual incentive for aorkers. ~
COPYRIGHT: Daily Yomiuri 1981
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