REMARKS MADE WHILE REPORTING TO QIAO SHI1
FEBRUARY 26, 1990
On the question of stability—which is the big picture—I ask you to assure the Party Central Committee that we are determined to keep Shanghai stable, and we can keep it stable. Politically, we think that the current situation in Shanghai is good. There are some elements of instability, but it can be kept stable. The three months of March, April, and May will be key. If we can keep Shanghai stable during these three months and if there are no major incidents, then nothing will happen this year, and there will also be no major incidents in the future.
We are preparing to convene a plenary session of the Municipal Party Committee as soon as the Sixth Plenary Session of the 13th Central Committee concludes, in order to put its spirit into practice. We will start acting immediately, and the first priority will be the various schools. The secretary, deputy secretaries, and Standing Committee members of the Municipal Party Committee and our vice mayors will spread out in over 10 directions to do ideological work at schools—that’s what we did in 1988. I believe that we can keep things stable politically. We handle many things cautiously, and, in particular, we are asking retired veterans to act as our gatekeepers, to deal with things strictly yet cautiously, so that we can keep the situation in Shanghai stable.
I agree with [Wang] Daohan’s2 view that the economy won’t be too good. That’s the situation all over the country, and I’m not too optimistic. I can’t say that the markets will turn around if we work on them for the remaining half of this year—I’m afraid it will take longer. It now appears that these measures to start up the economy won’t be enough to turn this situation around. We must be sufficiently prepared mentally; that is to say, things won’t become too good all at once. The conditions in Shanghai are very good: our coal inventory has gone from a three-day supply in the past to the current one-month and more, and the conditions for production are much better than they used to be. Provided we have the markets, Shanghai will be able to produce at full speed and raise our growth rate to over 10%—this is no boast.
The problem is that given the situation around the country, Shanghai can’t turn itself around all at once. With 40% of our products being sold across the country, if we can’t get our money back, if it’s just locked up there, how can it circulate? However, things can only get so bad. We can still keep things stable, the economy can still maintain a certain growth, and market prices can be kept stable.
Work stoppages or laid-off workers aren’t a major problem in Shanghai, either. We mainly have to work on industrial restructuring and not be afraid to shut [enterprises] down. We are sufficiently prepared mentally, so this isn’t a serious problem. Social order in Shanghai is still quite good, and most crimes are committed by transients. We can assure the Central Committee that we are determined to keep Shanghai stable. We have some measures [in place], we have the confidence and the determination—the Central Committee need not worry.
Another question to discuss is one that [Chen] Guodong3 and [Hu] Lijiao4 raised the last time we were reporting to [Vice President] Yang Shangkun: which direction should Shanghai take? They were asking about the further opening up of Shanghai. To tell you the truth, as the municipal Party secretary, I didn’t dare raise this subject. I said that I’ll do whatever the Central Committee tells me to do—that’s all I’m thinking about now. If I can keep things stable, if I can maintain the status quo, I’ll feel that I’ve done quite decently. Later, when Guodong raised this question, it attracted the attention and concern of people from Yang Shangkun all the way to Deng Xiaoping, and we were very pleased.
There are three increases of RMB 1 billion each in Shanghai’s fiscal subsidies. The first billion is for subsidizing grain, oil, and non-staples—these subsidies are increasing by a billion a year, and they are in fact flowing to other provinces and municipalities. When they raise prices, Shanghai has no choice but to pay more. The second billion is the burden of our enterprises. There is a net price increase of RMB 1 billion a year for the raw materials and energy supplied to us by other places. Although we’ve also raised our prices a little, it’s not enough to keep up. The third billion is what we hand over to the central government—that has also increased by a billion a year. Our fiscal contract stipulates RMB 10.5 billion, but in fact we have to hand over RMB 12.9 billion this year. That is RMB 3 billion more a year—where are we supposed to find this money? The state hasn’t invested much, it hasn’t located many large projects in Shanghai. Of course I’m not saying that there are none—the 300,000-ton ethylene project was originally put in place by the central government—but there aren’t many. It will be hard to sustain ourselves if we go on like this.
In conversation with Qiao Shi, member of the Politburo Standing Committee of the Chinese Communist Party’s Central Committee and secretary of the Central Discipline Commission, during a discussion with the Shanghai delegation at the Fourth Session of the Seventh National People’s Congress, March 30, 1991. (Photograph by Liu Jiansheng, Xinhua News Agency)
It’s not an issue of taking off: it’s that if we don’t go forward, we will go backward; we will go downward. We’re very worried. So what should we do? We truly can only take the path of opening up and developing an externally oriented economy—this is the only way out. Otherwise, it will be impossible to solve a whole series of problems we face, such as housing, traffic, and pollution, and people’s grievances will grow greater and greater. Over the past few years, the mood of the people changed in the wake of work on urban infrastructure such as the railway station and the cross-river tunnel, which began during the terms of [Wang] Daohan and Jiang Zemin, plus the current Huangpu River Bridge. We cannot do without some urban construction.
That’s why we are raising the question of further opening up. Daohan has always said that the crucial factor is the degree of opening. Guodong described three options just now, but in listening, I feel there is actually only one option, namely the policies used in the Shenzhen Special Economic Zone, but I didn’t dare say so in my report. As I was sending Deng Xiaoping off, he said a few words in the car that greatly encouraged us: “I’ve always advocated being bolder. For the past 10 years, I’ve been constantly touting opening up. Be a bit bolder—there’s nothing to be afraid of, it’s not a big deal. That’s why I’m in favor of your developing Pudong.” The other thing he said was, “You’re late in doing this, you’re late.” Then, “It can still be done quickly now, Shanghainese have the smartest brains. It can definitely be done faster than in Guangdong.” This was tremendously encouraging to us.
Deng Xiaoping also said, “You should give Jiang Zemin frequent updates.” I mentioned that Jiang Zemin is also from Shanghai! It would be awkward for us to speak to him too often. So Deng Xiaoping spoke up later. After receiving members of the committee drafting the Basic Law of the Hong Kong Special Autonomous Region, and while Jiang Zemin and Li Peng were present, Deng Xiaoping said, “Jiang Zemin comes from Shanghai so it’s awkward for him to speak. I have not been involved in [day-to-day] matters, but I want to say something today. Shanghai must open up.”
That very afternoon, Li Peng asked He Chunlin5 to telephone us and discuss some issues that we need to pay attention to when reforming and opening up. He offered some thoughts and at the same time asked, “Do you have anything [you can show me]?” I said, “We’ve been discussing our report for two or three months now, but never feel quite satisfied with it. If you want us to rush it out, I can work overtime tonight and send it over to you.” We finished revising it that night and sent it over the next day. This is the report you’ve already seen. What we hope for now is to reinforce the central government’s determination so that they approve this report of ours.
We promise to work to our very last breath, to contribute to the big picture, and to enable Shanghai to truly make the contribution that it ought to on the chessboard of the whole country—we have the determination to do this. Although I’m old now, the members of our team are quite young. They have a lot of room to grow, and they are full of energy. I believe that with the help of retired colleagues, they’ll be able to do a good job.
1. Zhu Rongji made these remarks during the presentation of a report by the Shanghai Municipal Party Committee to Qiao Shi, then a member of the Politburo Standing Committee and secretary of the Central Discipline Commission, who was on an inspection tour of Shanghai.
4. Hu Lijiao was the former chairman of the Standing Committee of the Shanghai People’s Congress.
5. He Chunlin was then deputy secretary-general of the State Council and also director of the State Council’s Office of Special Economic Zones.