Most big state firms in China slated for privatization by 2000 Communist Party chief says reforms will cost many people their jobs

September 13, 1997|By Frank Langfitt | Frank Langfitt,SUN FOREIGN STAFF

BEIJING -- Sounding more like the chairman of General Motors than the general secretary of the Chinese Communist Party, Jiang Zemin called yesterday for the speeding up of China's capitalist-style economic reforms, including the sale of some of the nation's lumbering state-owned enterprises.

In an address on the opening day of the China's 15th Party Congress, the 71-year-old leader strongly endorsed the reforms of his predecessor, the late Deng Xiaoping, and seemed to assure that the world's largest country would continue its rapid march toward a market economy.

Although he peppered his speech with references to Karl Marx and Mao Tse-tung -- as Communist Party politics still require -- his words served to further distance China from what is fast becoming its socialist past.

Modern enterprise system

"By the end of this century most of the large and medium-sized state-owned key enterprises will have initially established a modern enterprise system and markedly improved their operation," Jiang said in a 59-page speech that was broadcast live on national television and ran nearly 2 1/2 hours.

"We shall also quicken the pace in relaxing the control over small state-owned enterprises and invigorating them by way of reorganization, association, merger, leasing, contract operation, joint stock partnership or sell-off."

The 15th Communist Party Congress, which is expected to last a week, is a combination political convention/national election in which the party crafts policy and chooses its leaders into the 21st century. One of the main focuses of this congress is reforming China's massive state-run enterprises, which employ

more than 100 million people.

Of the nation's approximately 300,000 state-owned companies, many are money losers -- creaking relics from the days of central economic planning. Some make products that appeal to few buyers, while paying workers to stay at home instead of laying them off. Jiang, who also serves as China's president, essentially gave the go-ahead yesterday for state-run enterprises to expand and speed current reforms, such as selling stock to employees and private investors, while merging failing companies with more successful ones.

Overhauling the system, though, is fraught with peril as massive layoffs could lead to widespread political unrest.

Still, Jiang acknowledged that reform will cost people jobs and that the gravy train is slowly coming to an end.

Hard to avoid layoffs

"With the deepening of enterprise reforms, technological progress and readjustment of the economic structure, it would be hard to avoid the flow of personnel and layoffs," he said.

"All workers should change their ideas about employment and improve their own quality to meet the new requirements of reform and development."

When the congress opened yesterday morning in the Great Hall of the People, China's hulking Stalinist-style parliament building on Tiananmen Square, the gathering seemed more like a field trip than a serious policy meeting.

Hundreds of delegates from across the country poured across the pink marble floor of the foyer, chatting and laughing. Flashbulbs lighted up the room as many shot pictures of each other inside the national landmark.

Jiang addressed the 2,048 delegates from a podium on the stage of the Great Hall, which -- except for the hammer-and-sickle behind the rostrum and the huge, illuminated red star overhead -- resembles a giant old-style movie theater.

Although it's officially known as the Great Hall of the People, much of the first balcony and all of the second were empty. The general public is not invited to party congresses, which occur once every five years.

Army to lose 500,000

While most of Jiang's speech focused on domestic policy, he did touch on national defense and foreign relations. The general secretary pledged to rely more on high technology weapons and reduce China's approximately 3-million-man People's Liberation Army by 500,000 over the next three years.

He also offered veiled criticism of the United States.

"Expanding military blocs and strengthening military alliances will not be conducive to safeguarding peace and security," Jiang said, in an apparent reference to the U.S. security agreement with Japan.

Alluding to U.S. criticism of China's human rights and religious policies, he said: "We do not impose our social system and ideology upon others, nor will we allow other countries to force theirs upon us."

As for those holding out hope for major democratic political reform in this authoritarian country, the general secretary offered little encouragement. "It is imperative that we should uphold and improve [China's] fundamental political system, instead of copying any Western models," he said.

Pub Date: 9/13/97

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