China leader pledges government cuts as parliament convenes
March 5, 1998
Web posted at: 9:38 a.m. EST (1438 GMT)
BEIJING (CNN) -- Premier Li Peng revealed an ambitious plan to pare down bureaucracy and spur economic growth, as he opened a two-week meeting of China's parliament on Thursday.
The proposed changes are the most sweeping since China began economic reforms nearly 20 years ago, Li told National People's Congress delegates gathered at the Great Hall of the People.
He pledged a massive government shakeup that will do away with 11 of 40 government ministries and commissions, and will move the 4 million bureaucrats currently employed there off of government payrolls and into private business.
Millions of industrial workers are also expected to lose their jobs, because in this new, deeper phase of reform, money-losing state enterprises will have to be bought out or shut down.
"We should also support laid-off workers in seeking new jobs on their own, and encourage them to become self-employed or to work in private sectors of the economy," Li said, sounding more like a hardened capitalist than the leader of the world's largest remaining Communist country.
Reforms could be slowed if they lead to unrest
Millions of industrial workers are expected to lose their jobs
However, acknowledging that the reforms would raise already high unemployment, Li said the breakneck pace would be moderated if unrest mounts.
Government restructuring -- certain to face opposition from powerful bureaucrats -- also needs to be handled "persistently, prudently, patiently and carefully," Li said.
"Stability is the prerequisite of reform and development," he told the 2,944 delegates. "We must balance the intensity of reform, the speed of development and our people's ability to sustain these."
Li also suggested stimulating the economy through more housing construction and stepped-up public works, and backed making the central bank less susceptible to political interference and strengthening assets of state-run commercial banks, virtually bankrupt from forced lending to state industries.
Li was also frank about other problems that may be difficult to solve, like crime, corruption, and growing economic inequality.
Trappings of Communism remain
His speech may have tasted of capitalism, but the performance itself held true to the ruling Communist Party's preference for orchestrated public rituals. His speech -- before a backdrop of red flags and the red and gold state seal -- ran nearly two hours. Communist Party General-Secretary Jiang Zemin and other Politburo members sat on the stage behind Li.
Most delegates agreed that, in the long run, the payoffs of these tough new reforms will outweigh the short-term economic pain.
"This is something that every country that changes from a planned economy to a market economy has to go through," one delegate remarked. "It's the price you have to pay."
Now, the delegates will discuss the ideas in the premier's speech. Then in 14 days, they will most likely approve them. Senior party leaders made most of the decisions last week at a two-day closed-door meeting. Their agenda is assured of passage, given that 70 percent of Congress deputies are party members.
Correspondent Rebecca MacKinnon contributed to this report.