TNAG-2293-FCO40-3305-Official-visits-from-Hong-Kong-to-China-1991 — Page 91

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-

specifying the

kind

of

produce it required. It would

also draft, in parallel, contracts regarding prices with

-the relevant shops and stores.

9.

The

started in 1979. Thirdly, pricing reforms

first step was to fix and then to increase the price of

agricultural products from the rural areas in order to

encourage the,

the farmers. The second step was to stop the

control of market prices, except those of important goods

which continued to be guided

guided by the state, and the

became self-adjusting according to market

selling price became

forces.

10.

Fourthly,

encouragement

was

to given

the

establishment of more and more enterprises in the rural

areas,

which

served to

increase living standards.

For

example, in Jiangsu Province, one village was organized

into a factory. In 1979, 200 million farmers experienced

a sub-standard standard of living, but this figure had

been reduced to 8.3 million by the end of the 1980s and

was still decreasing. A total of 110,000 farmers had

moved to non-agricultural production with a consequential

strengthening of the commercial economy.

11.

Economic reform in the rural areas had been

praised by not only

Chinese but also foreign experts.

Two months ago,

a

United Nations delegation had

investigated the results of this reform and agreed that