REMARKS MADE WHILE REPORTING TO YANG SHANGKUN1
FEBRUARY 2, 1990
We feel the current situation in Shanghai and across the nation is good—it would be absolutely wrong to say that the overall situation isn’t good. Why? Because the four major tasks laid out at the Fourth Plenary Session of the 13th Central Committee,2 the seven practical things decided upon by the Politburo,3 and the programs and tasks proposed at the Fifth Plenary Session of the 13th Central Committee are well suited to current needs. Although people are still somewhat lacking in confidence, their minds are more aligned than ever. That is the situation in Shanghai, and it is also the basic situation in the country as a whole.
This year we are focusing mainly on Party conduct. Although economic work is very important, without a change in Party conduct, it will be very hard to improve the economy. We are proposing to focus on both Party conduct and clean government—to put the emphasis on these and to implement them all the way down to the grassroots. As I understand it, the rural cadres in Shanghai generally follow the rules but there are also quite a few problems. Some cadres want special privileges; they take good land and use it to build homes for themselves. We’ve taken photos—these homes are like gardens. In addition, we find a lack of separation between government and enterprises, and between Party and government. We have villagers’ committees, but their leaders might also serve as heads of various economic entities, so people, money, and materials are all in their pockets. A township Party secretary might also be the board chairperson of a cooperative, and its bookkeeping might be flawed. Under a system that makes no distinctions between Party, government, and economic entities, it’s very hard to exercise supervision and very easy for nepotism and corruption to take place and for rules to be broken. I’d like to draft a document to address these issues.
On the subject of clean government, some people are complaining that we haven’t apprehended any bureau chiefs yet. It’s true—we haven’t apprehended a single bureau chief so far. Of course we can’t randomly apprehend those who haven’t done anything wrong; those who have done something wrong will be severely dealt with. For example, the secretary of a district procuratorate who stole over RMB 400,000 worth of confiscated gold jewelry being held for safekeeping by the procuratorate has been executed by firing squad.
In economic matters, we must focus hard on rectification. The current difficulties can be solved, but it will take at least five years. We can get by this year, but it won’t do to drag things out for too long—this would affect people’s confidence. It won’t do if workers hang their heads in dejection and don’t do their jobs. The central government has already issued a document on rectification. We have to make it more concrete and make the workers and farmers feel confident.
Although Shanghai can still keep going for a few years, we are already stretched to the limit. It will be very hard to carry on if things continue like this. We would still be able to keep things under control so that the people don’t rise up, but it would be hard to halt the decline and turn things around. Shanghai is a city of processing industries. Although our labor productivity, ratio of output to profits and taxes, and capital utilization rate still lead the nation, these are expected to decline from year to year. Because the raw materials and energy used by Shanghai all come from other places, because the price of raw materials is constantly increasing while the price of Shanghai’s goods cannot be raised correspondingly, and because the state hasn’t made large investments, it will be very difficult to sustain the current situation.
Inspecting the hull shop and the survey ship Yuanwang at the Jiangnan Shipyard on September 21, 1989.
Shanghai is already paying out RMB 5.6 billion in fiscal subsidies, of which RMB 1 billion consists of grain subsidies from the central government. Almost all the fiscal revenue retained after handing over [the amount due] to the central government is used for subsidies. These subsidies are increasing by the year: in 1987 they were RMB 200 million higher than in 1986; in 1988 they rose RMB 900 million over 1987; and in 1989 the increase was RMB 1.37 billion. It’s worth our while to give some thought to this situation. You must give Shanghai policy [support] if it is to make greater contributions, because it occupies a special position—Guangdong cannot compare with it. We handed over RMB 12.5 billion, or one-quarter of the total that local governments handed over to the central government. If you add to that the RMB 25 billion handed over by central government enterprises located in Shanghai, that’s one-fifth of all central revenues. Given Shanghai’s position, the central government would find it extremely disadvantageous if [Shanghai’s] economy were to decline.
Shanghai has the conditions needed to make greater contributions to the central government, and it also has the wherewithal to put these conditions to use. First of all, the political conditions in Shanghai are good. We are loyal to the Party Central Committee, we obey it, and are always aligned with it. Shanghai’s cadres also follow the rules and are manageable. Shanghai is very centralized—if there’s a problem with a factory director or a district head, we always learn about it and correct it in a timely way. Shanghai is relatively orthodox, and no major problems will occur here.
Second, in terms of economics, our conditions are far better than those in Guangdong, mainly because we are strong in sci-tech. Someone who arrived here just a day ago is C. C. Ting,4 who is overseeing construction of the world’s largest accelerator in the United States at a cost of US$7.9 billion. The 250-millimeter-long BGO5 it needs is made in Shanghai. Shanghai has a complete range of industries, everything from soup to nuts. Although Shanghai doesn’t have mining, the Ministry of Coal’s most important research institute—the Institute of Coal Mining Machinery—is located in Shanghai because of the range of industries here. Moreover, Shanghai has people of relatively high caliber who have experience in dealing with foreigners. Furthermore it has done quite well in using computers for statistical work and for monitoring and storage in infrastructure projects, so people can’t cheat even if they wanted to. Shanghai has also developed very quickly in telecommunications—over 100,000 telephone lines are added yearly. We already have over 500,000 lines now and will overtake Hong Kong in 10 years. The central government need not worry—you can give us greater autonomy. Shanghai will staunchly continue to open up, and it has definite appeal to foreign investment. It has already implemented a system of fiscal contracting for sums to be handed over. Giving us policy [support] won’t affect the central government’s fiscal revenues, and we’re willing to make greater contributions.
1. These are remarks made by Zhu Rongji during the presentation of a report by the Shanghai Municipal Party Committee to Yang Shangkun, then vice president of the People’s Republic of China, who was on an inspection tour of Shanghai.
2. The Fourth Plenary Session of the 13th Central Committee in June 1989 called for special attention to four things: (1) thoroughly put an end to disturbances, quell counterrevolutionary rioting, strictly differentiate between the two types of contradictions and further stabilize the situation in the entire country; (2) continue with rectification, firmly continue with reforms and opening up, and promote sustained, stable, and harmonized economic development; (3) strengthen ideological work, work hard to launch education that is patriotic and socialist, that advocates patriotism, socialism, [the importance of national] independence, and arduous endeavor, and soundly oppose bourgeois liberalization; and (4) forcefully strengthen Party building, the building of democracy and legal institutions, resolutely punish corruption, do several things effectively that the people are widely concerned about, and live up to the hopes people place in the Party.
3. This refers to the Decision of the Party Central Committee and the State Council of July 28, 1989, on doing several things the people are concerned about. The decision pointed out that seven things needed to be done in the near term to punish corruption and take the lead in establishing integrity and a spirit of arduous endeavor: (1) further clean up companies; (2) stop children of senior officials from engaging in business; (3) eliminate the special supplies of small quantities of foodstuffs for leaders; (4) strictly allocate vehicles according to the rules and forbid imports of cars (except when implementing long-term trade agreements signed between governments and state-approved technology trade contracts); (5) strictly forbid anyone from hosting banquets and presenting gifts; (6) strictly limit foreign travel by leading cadres; and (7) strictly and carefully investigate cases of corruption, bribe-taking, and profiteering, with a special emphasis on major and important cases.
4. Samuel C. C. Ting was a Chinese-American experimental physicist and winner of a Nobel Prize in physics.
5. BGO, or bismuth germanate (Bi4Ge3O12) was a new crystalline substance with applications in high-energy physics, space physics, and nuclear medicine.