G.F. 324
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China Economic and General
1.
Following the publication on
11 October of Li Peng's speech to the late September central work conference on the problems of state-run enterprises, a speech by Jiang Zemin to the same conference was published in the PRC press on 22 October.
2.
Jiang's speech was markedly reformist in tone, echoing recently reported comments by Deng on the central importance of economic development.
But he expressed agreement with Li Peng's view that the problems of state-run enterprises could not be solved quickly and indeed would require continuing efforts during the 1991-95 plan period. Jiang also called for gradual "rationalisation" (lishun) of the planning, pricing, financial and taxation systems.
Jiang emphasised the importance of combining revolutionary
revolutionary principles with flexibility, and called on propaganda cadres to pay particular attention to accuracy in interpreting the party's line.
3.
Li's speech used similar wording to that of the official communique on the meeting (published on 28 September) on the need to maintain the
"two guarantees" for backbone enterprises (i.e. guarantees of funding and of materials provided by the state), but he added that the system should be gradually curtailed. Li also called for the management system specified in the enterprise law to be more widely applied.
4.
Speaking in Guangzhou on 16 October, Li again took up the subject of state-run enterprises. He said that all such enterprises, whether under mandatory planning or market regulation, must themselves take on the marketing of their products, satisfy the demands of the market, and resolutely reduce and eventually eliminate their operating losses (see also para 44).
In line with the need, acknowledged by the leaders, to lighten
tax burden on large and medium enterprises, the State Administration of Taxation issued a notice on reducing income tax and limiting commodity tax levied on such enterprises, and introducing a value added tax (ED 28 Oct).
5.
The PRC press also published a speech by Li Peng dated 13 October (i.e. during his visit to Guangdong) on the importance of conserving grain.
6.
Tian Jiyun stayed on in Guangdong for a few days after Li Peng's return to Peking.
From 15 to 20 October Tian inspected three open areas western Zhuhai, Nansha in Guangzhou municipality and the Advanced Technology Zone in Zhongshan. He visited Nanshan in the company of Henry Fok who has made large
· investments there.
In Zhuhai he visited the old Sanzao airfield, among other places. He emphasised the need for the development of the open areas to be funded from local and overseas sources, in view of the difficulty of providing central
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