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CONFIDENTIAL
more would be spent on education, science and technology and
that intellectuals would receive a gradual increase in
remuneration for their work.
9. Yao Yilin announced targets for agricultural and industrial
production in 1983: both are planned to grow by 4%. Within the
industrial target, growth of light industry is planned to be
4.1% and heavy industry 3.9%. The industrial target was
relatively conservative, in order, he said, to discourage
the pursuit of increasing output value to the exclusion of
all other economic results. A small deficit, about the same
as that for 1982, is planned.
b) Problems in industry
10. The main problem highlighted by both Zhao and Yao, despite
Zhao's claim that the economy had achieved basic equilibrium
since 1978, was the renewed overexpansion of heavy industry in
both 1982 and the first four months of 1983. In 1982 it grew
by 9.9% and from January to April this year it was up 11.7%
on the equivalent period of 1982. This was almost entirely
due to a rapid expansion in unplanned capital construction at
the local level. Since 1981 the localities have been allowed
to keep a greater proportion of State income than previously
and individual enterprises have recently been allowed to retain
a portion of their profits. As a result enterprises have been
expanding their cosntruction without regard to the overall
CONFIDENTIAL
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