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10.
Another noteworthy development revealed by
the 1986 Budget was the decline in state revenue as a
proportion of national income over the past few years, in line with the decentralization of economic power to lower levels. Comparing 1979 with 1986,
this ratio fell from 31.9% to 25%. As regards the prospects for further reforms and decentralization in the economic system, the outlook is uncertain at
present. In the National Economic and Social
Development Plan for 1987, a brief reference was made
to the need to reduce the scope of mandatory planning
and the number of materials (referring to raw
materials and machines) under unified state
distribution. It was also stated that the scope of
guidance planning and market regulation would be
broadened. However, no concrete reform measures have
been put forward. On the contrary, reforms in some
areas have apparently slowed down. The draft enterprise law, which would give enterprises more autonomy in decision making, was not taken to the National People's Congress (NPC) meeting held in late March for approval. This was widely regarded as signaling that the debate over enterprise reform is still in deadlock. Apparently, there is still a lot
of controversy over the separation of enterprises from the government and over the desirability of granting enterprises more autonomy in the absence of
a rational price structure. Also related to these problems, the experiment on the issue of stocks by
state enterprises has met some setbacks. The State
Council has recently decided that stock issues should
be restricted to a few collective enterprises with
state approvals. State enterprises, on the other hand, are allowed to float bonds, but not to issue
shares.
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