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unassailable.
He has established supporters in key positions. Zhao Ziyang (Premier) and Hu Yaobang (General Secretary of the Party) are fairly well placed to continue his policies after he
is gone.
He has had the main elements of his reform programme
unanimously endorsed at formal meetings of the Party. Furthermore, he can now point to a solid record of practical economic success. In agriculture, where the reforms have been going the longest, a record grain harvest has just been achieved for the fifth year running. Between 1978 and 1983, in industry, high rates of growth around 128/ Industrial wages have risen
/expected have also been achieved:
in 1984. by almost half since 1978 and the new emphasis on light industrial
production has allowed more consumer goods onto the market.
4. Some of the more remarkable changes have taken place in foreign economic relations. The four Special Economic Zones established in 1979 have been followed by the opening this year of a further fourteen coastal cities to preferential treatment for foreign investors. Since 1979 China has attracted US$8bn in foreign
China's foreign trade increased annually between 1978
and 1983 by 14.6%; in the first 9 months of this year it rose over 20% to US$37.37bn, with a favourable trade balance of $350m. China's foreign exchange reserves stand at $16.48bn.
investment.
5. The Third Plenum of the Central Committee held in October
1984 marked another important stage of reform. Following the acknowledged success in agriculture, the Plenum adopted a general programme for reform in the far more complex urban and industrial side of the economy. Much will depend on the concrete measures to be adopted to implement it. Nonetheless the Plenum document is a devastating indictment of the inefficiency of the industrial planned economy. The remedies it proposes include a limited introduction of market forces. Certain sectors will be
taken out of the central planning system altogether. Deng Xiaoping has said that the introduction of "some capitalism" under China's open door policy would be conducive to the development of socialist productive forces. Much greater powers of responsibility, including that to dismiss employees, will be given to enterprise managers. The acknowledged key to the package lies in the centrally controlled pricing structure. The Plenum suggested that this "irrational"
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