SPEECH AT THE FIRST PLENARY SESSION OF THE NINTH SHANGHAI PEOPLE’S CONGRESS1
APRIL 25, 1988
The meeting agenda calls for some personal information, so better for me to “come clean” at the outset. I’ll begin by saying I joined the Revolution relatively late, and my experiences have been rather straightforward.
Background
I was born in Changsha in October 1928 and attended school in Hunan Province, graduating from Hunan Provincial High School No. 1 in 1947. That same year in Shanghai I passed the admissions test of Tsinghua University and entered its Department of Electrical Engineering. During my college years, I joined the student movement, and in the winter of 1948, I joined the New Democratic Youth League of China, which was under the leadership of the underground Chinese Communist Party. In 1949 I joined the Chinese Communist Party.
After graduating from Tsinghua University in 1951, I was assigned to the planning section of the Department of Industry of the Northeast China People’s Government, where I was deputy head of its Production Planning Office. The head of the Planning Bureau at the time was Chai Shufan, who was succeeded by Yuan Baohua.
After the Northeast China People’s Government was dissolved in 1952, I went with Ma Hong2 and An Zhiwen3 to the State Planning Commission—this was in November 1952. At the State Planning Commission, I was initially in charge of electricity. In 1954 I moved to the commission’s General Industrial Bureau, where I was in charge of the General Department. Subsequently I served as secretary to Zhang Xi, a vice minister of the commission. When Zhang Xi later fell ill with cancer, I also became head of the General Department of the commission’s Machine Industries Planning Bureau. I remained there until 1957, when the “Speaking Out Freely and Airing One’s View Fully” campaign and the Anti-Rightist Movement took place in May–June.
Speaking at the Fourth Plenary Session of the First Session of the Ninth Shanghai People’s Congress, April 25, 1988.
During the “Speaking Out Freely and Airing One’s View Fully” campaign, colleagues said to me, “You’re the secretary of the Party Group leadership. If you don’t voice criticisms and comments to the Party Group, who will?” They insisted that I speak out so I did say a few words at the bureau, but I chose my words carelessly. Before October, everyone felt I had expressed my criticisms quite well; afterward, they said you need to rethink your criticism; and by January 1958 I was designated a Rightist. However, I was treated very leniently—I guess that was because my leaders and colleagues at the Planning Commission knew me very well. As a result, although I was relieved of my duties as a deputy section chief, demoted two administrative grades, and expelled from the Party, I still continued to work at the State Planning Commission.
During the first year or two, I taught science and math to the Planning Commission’s retired cadres in my spare time. Later, I was given work at the industrial section of the commission’s General Bureau of the National Economy. I was very grateful that the commission’s Party Group was showing such concern for me—they never had me sent down and gave me a chance to continue working for the Party. During the Cultural Revolution I was sent to the commission’s farm, where I spent five years. Those five years were a very great education for me. Despite being cadres of the State Planning Commission and working at a collective farm, we were situated in a village, so I learned a good deal about villages and labor. During those five years, I did everything: I planted wheat, rice, and cotton; I raised cattle, sheep, and pigs; I was a cook.
I returned to Beijing in 1975. Although my personal files were still at the State Planning Commission, I was assigned to work at the Electrical Communications Engineering Company, a branch of the Ministry of Petrochemicals’ Pipeline Bureau. Leading a team of apprentices, I began training by climbing electrical utility poles and eventually learning to install 220,000-volt power cables and 110,000-volt transformers. This phase lasted a little over two years and was also very educational for me, as it gave me some experience working at the grass roots.
In 1978 Ma Hong4 asked me to head the research office of the Institute of Industrial Economics at the Chinese Academy of Social Sciences. Shortly thereafter, on the eve of the Third Plenary Session of the 11th National Party Congress, my institute corrected the erroneous designation of me as a Rightist and restored my Party membership and my job. At this time Yuan Baohua was a vice minister of the State Economic Commission and Kang Shi’en was the minister. They wanted me to return to the State Economic Commission because it was in fact carved out of the State Planning Commission. After the new State Economic Commission was established in 1982, I began to serve as a commission member as well as director of the Bureau of Technological Upgrading. In 1983 I became a vice minister of the Economic Commission; in 1985 I became deputy secretary of its Party Group and executive vice minister. This continued until the beginning of this year, when I came to Shanghai. That, in brief, is my background.
Political Record
This record is really hard to talk about! Of course, during the 30-odd years I have been working, in spite of the many setbacks I met with after 1957, my work unit still evaluated my work quite highly. My basic trait, my “creed,” is independent thinking. And if I think a certain way, then that’s what I feel I should say.
I’m an orphan. My parents died when I was very young—I never knew my father, and I have no siblings—so when I discovered the Party in 1947, it felt like a mother to me. With all my heart, I consider the Party my mother. That’s why I don’t hold back whenever I speak. As long as it’s something I feel is good for the Party, I will speak up, and even if I’m mistakenly dealt with, I don’t let it bother me. I can also say that when I resumed my political life on the eve of the Third Plenary Session of the 11th National Party Congress, it made me feel politically young again. I always believed that our Party would treat me correctly. This is my special trait, or, should I say, this is what I try hard to be.
Self-Evaluation
I feel I’m not the best candidate for mayor of Shanghai. I have many shortcomings, and in many areas I’m not nearly as good as my predecessors, especially Jiang Zemin. Let me point out three particular concerns.
First, my experience is concentrated at leadership agencies, with little work at the grassroots level. I said just now that I worked at the State Planning Commission for 25 years and at the State Economic Commission for 10 years. My only experience at the grassroots level consists of the very short time I spent at the Pipeline Bureau. I’ve never been a factory director, nor have I ever been the head of a district or county. Jiang Zemin became a factory director very early on, and what’s more he headed a very large factory. Nor did I come up the ranks from the village level so I have limited knowledge of the hardships of ordinary people. This is a very great weakness of mine, and I’m afraid that in this area, I may still make some policy mistakes.
Second, I have only worked in the central government and not at all in local governments. I’ve never worked locally—instead, I’ve always been sitting in Beijing. That’s why after coming to Shanghai, I have more gray hair than at any other point in my life. Jiang Zemin predicted that my hair would turn completely white within a year. That was his experience, and I’m already beginning to feel it. The work is indeed complex and difficult—that’s why Jiang Zemin often says that his nerves are always on edge, and now I feel this way too.
Third, I have the wrong temperament. I am very impatient, I lack the reserve that a leader should have, and I am overeager to see results in my work. I am too impatient with my subordinates and criticize them too harshly. In this regard, I should really follow Jiang Zemin’s example. Before I came to Shanghai, Song Ping5 had some advice for me. He said it’s not a shortcoming to make rigorous demands of cadres, but you mustn’t hurt people when you criticize them, nor should your words be too sharp. These were very thoughtful comments. He also said I should learn from [late premier] Zhou Enlai—after being criticized, people should feel you were right to criticize them and feel that this shows your concern for them. I really do lack this leadership quality and hope you will supervise me and help me correct it. It’s easier to change the course of a river than to change one’s character. This won’t be easy, but I will work very hard to correct my flaws.
My Administrative Plan
It’s really very awkward for me to discuss this! So far, the goals of our administrative program have been clearly laid out in Jiang Zemin’s work report,6 and my task is to creatively complete and achieve these, so I can’t say much more about these things at the moment. If you want specifics, you’ll have to wait until the entire leadership team of the municipal government has been elected, discussed this in earnest, and studied concrete implementation measures. I really can’t give you any more information at the moment. However, it seems that if I don’t say anything at all, I won’t pass this test. I haven’t discussed this with Jiang Zemin, but I worked overtime last night thinking about this matter and feel I can at least share some of my personal views.
Holding a press conference on April 30, 1988, at the closing of the First Session of the Ninth Shanghai People’s Congress, after being elected mayor of Shanghai. From the left, Vice Mayor Ni Hongfu, Vice Mayor Gu Chuanxun, and Gong Xinhan, deputy director of the Publicity Department of the Shanghai Municipal Party Committee.
I think that what Shanghai needs most is to do a sound job of implementation. We must be able to do what we say, rather than keep proposing many programs and many expectations. The tasks and expectations in Jiang Zemin’s work report are based on facts, and it is possible for us to achieve them, and even to achieve them ahead of schedule.
A retired comrade once telephoned me to say, “You claim you’ll change Shanghai’s appearance within three years. If you don’t, you should take responsibility and resign.” I said I would never be so brash as to even suggest anything of the sort, and this was a misunderstanding. What did I actually say? It had to do with Shanghai Volkswagen’s Santana. At the moment the Santana is extremely profitable—we can make tens of thousands of renminbi on each car. But this year’s plan only allows us to produce 10,000 cars. Why is that? Because the level of indigenous production is very low just now. Producing in large quantities means buying more parts from others to assemble. This costs a lot of forex, which is why the State Council’s policy is to hold up production here. But Shanghai is currently experiencing such difficulties that if we don’t make a few more Santanas and earn a little more money, it will be very hard to get by. That’s why I wrote a position paper7 addressed to Li Peng. Jiang Zemin signed off on it, and this is what I said:
First, I noted that we held a meeting last year on indigenous production of the Santana and drew up a plan, which is being implemented in earnest. I said the indigenization rate last year reached 12.7%; this year it will reach 25%; by 1990 the verifiable indigenization rate can reach 80% or more, so we will have basically indigenized within three years. I also said that producing a few more and assembling a few more wouldn’t affect indigenization. The plan has been worked out and is being implemented.
Second, I explained that Shanghai currently has the capacity to produce and there is also great demand in the domestic market. Although the indigenization rate is still a bit low, it’s better than importing complete vehicles. Besides, raw materials are very problematic in Shanghai just now. We must rely on exchanging the Santana for raw materials; otherwise we’ll have to halt production. That’s why no matter what, we asked permission to produce 15,000 vehicles. By adding 5,000 cars, our fiscal revenues will increase by several hundred million renminbi!
Although our present situation is very difficult, I felt that producing 15,000 Santanas would be an entirely correct move, and we indeed gained the support of Li Peng and other central government leaders—they permitted us to produce 15,000. If we cannot achieve indigenization within three years, how will I answer to the central authorities? That’s why I added this phrase to the petition: “If we do not achieve indigenization within three years, I will take the blame and assume the responsibility.” I did not dare mention resigning. I used that term when I spoke to Shanghai Volkswagen, to the Municipal Economic Commission and Planning Commission, saying: “If you don’t focus well on indigenizing, then I’ll have to resign, as my fate is bound up with yours.” I used that term hoping it would have an effect on them.
But when word of what I said spread around, it became I would resign and take responsibility if I failed to transform Shanghai’s appearance within three years. I would never dare say something like that, and I absolutely never said such a thing. It would be very hard to solve the problems that have accumulated in Shanghai over decades within three or five years, and I’m sure you also understand this.
Let me make this clear: I’ve only been here for three months. I’m not Zhuge Liang, nor am I capable of a “Longzhong exposition.”8 This is something that must be made clear if I were to be elected mayor, because I read in a briefing paper that someone made the following criticism of me: “You haven’t been elected mayor yet. Why did you say ‘If I were to be elected mayor’ at your Beijing press conference for Chinese and foreign reporters?9 That’s too immodest.” I can understand what this Municipal People’s Congress deputy meant and I also accept that criticism. But I must also explain to that deputy that this wasn’t something I wanted to say. Before the press conference, Zeng Tao, the congress’s deputy secretary general, had helped Shanghai do a lot of preparatory work. Because I couldn’t hold the press conference using my title as deputy secretary of the Shanghai Municipal Party Committee, Zeng Tao said, “At the press conference, you can say ‘If I am elected mayor.’ That way it will be clear to everyone.” And that’s what I said.
[Interjection by Jiang Zemin:] Zhu Rongji, you held the press conference as a candidate nominated by the Party Central Committee, so I feel that in principle, there was nothing wrong with saying that, especially when meeting with foreign reporters. And I was also implicitly in accord with you. During your press conference, I didn’t telephone you because I was at the airport being interviewed by the BBC. Their reporter asked, “Aren’t Party and government now supposed to be separate? Now you’re both municipal Party secretary and mayor—how come?” I immediately said, “The Municipal People’s Congress is going to meet very soon, and the Party Central Committee has already confirmed that Zhu Rongji will be coming to Shanghai to join the city’s leadership. After the next session of the People’s Congress he’ll become mayor, but of course that will be after he is elected.”
If I am elected mayor, I will be determined to make the next administration one that serves the people wholeheartedly, an administration that is clean and very efficient—that is my resolve.
Improve Efficiency by Starting with Small Things. First off, we must resolutely halt the practice of wining and dining and of accepting gifts. This is not just to economize, but also to create an atmosphere of frugality as we build our nation. The slogan “four dishes and a soup” advocated by Jiang Zemin has become famous all over the country. The State Council has already moved in this direction, but here in Shanghai they sometimes add a lot of things. Eight plates are merely considered cold hors d’oeuvres, not a dish, while the large hot pot that comes next only counts as a soup; then they add another 10 sweets and savories that don’t count as dishes either—it is all very wasteful.
So I think I should start with myself and start with the city government. When we in the city government go down to the grassroots and the factories, we have to adhere to “one dish and one soup,” no matter what. Of course you can have a few more ingredients in that one dish, but it still won’t do to go to excess. In any case, they shouldn’t serve things like seafood and prawns. A few eggs, pork, or simple dishes will suffice. After all, that’s what we ordinarily serve when we have guests for dinner at home. “One dish and one soup”—that way we won’t be wasteful.
In 1985, while I was vice minister of the State Economic Commission, I visited Shanghai TV Factory No. 1, where we held a meeting about exporting TVs. When hosting us, they served only one dish consisting of four differently prepared ingredients. I felt this was very good: the key concern here was not how you host me, but how to export, to really get production up! Even when we’re hosting foreign guests, or people from the central government and elsewhere in China, we should still have “four dishes and a soup” and still shouldn’t go to excess in this regard.
As for the issue of gift-giving, someone at this meeting came up with a very good suggestion regarding the bags handed out to delegates to political consultative conferences and the People’s Congress. This bag is of no use whatsoever—nobody uses it. Can we not do away with it, and save some money by doing so? That is a much better idea. I was issued a bag when I attended the national People’s Congress, and that bag was enough for me. After returning to Shanghai, I was given two more bags at other conferences that are of no use at all.
This is one of the small things that people outside the Party find problems with, and that we should be able to address. Henceforth our city government will strictly forbid the giving out of bags at any meetings. This is a symbol: it means that in the future, it should no longer be the norm to present gifts or hand things out. That will save us a lot of money. First, we in the city government will take the lead. I hope the district and county governments will do likewise. I think it is entirely possible to change this trend.
Another small thing: Party and government leaders are now attending way too many ribbon-cuttings and celebratory activities, with TV crews covering such activities all day long. In fact, everyone is incredibly busy, so why must we spend so much time on these things? That’s why in the future, apart from those activities that the state requires us to attend, we should do our best to cut back. We can invite some highly respected retired cadres to attend. They’ve made great contributions to Shanghai’s growth, so let them make more appearances—the people of Shanghai will not forget them. Why must we always be the ones to attend? That gets in the way of a lot of work. Can we not relegate some of these activities to other colleagues, especially retired colleagues, and let us focus on substantive work?
Of course, I know that if the municipal Party secretary or the mayor doesn’t attend, the TV stations won’t cover it. But that’s just using us as advertisements, as publicity. So henceforth I shall respectfully ask for understanding and support from everyone, particularly the press. If rank is a concern, you should look at the former rank of these retired colleagues. I think it’s best not to look at rank—but to see if the meeting is important. If so, it merits a full report and TV coverage. It shouldn’t be on TV merely because a city leader is attending. If we have such mutual understanding and mutual support, we’ll be able to improve our government efficiency somewhat.
To Achieve a Highly Efficient Government, Devolve Power. The importance of devolving power has already been pointed out in Jiang Zemin’s report. I’ve said in the past that a city of over 12 million people like Shanghai cannot be run well by relying on one mayor and several vice mayors.
There aren’t many cities like Shanghai in the whole world, and it’s not an easy one to manage. That’s why I hope the heads of its 12 districts will function as 12 “mayors.” This is the only way to work well in Shanghai, and the 10 county heads must likewise take on their responsibilities. Of course, as Jiang Zemin has emphasized, administrative orders must still remain uniform, and we cannot have everyone doing as they please. You 12 “mayors” will still have to listen to the city’s presiding mayor, or things will go awry. That is to say, you should use your sense of ownership and responsibility to do a good job. The Municipal Party Committee and the municipal government are determined to make this happen, to devolve power. Meanwhile the various departments and agencies of our city government should transform their own functions in a similar manner and focus their energies on macroeconomic management and oversight. If you allow the district and county governments to do their own work to the extent possible, they will be able to do a better job.
To tell the truth, it’s hard to do things vertically; we still need to work horizontally.10 Why do we want to use the contract system? Because many things cannot be accomplished vertically from the top, we must rely on increasing horizontal autonomy. The same is true of city government. Many issues, including sanitation, are hard to resolve vertically, with the result that efficiency increases if they’re done horizontally. That’s why the various departments must strengthen their macroeconomic management and adjustments, then supervise—if a problem occurs somewhere, put a halt to it. We need to transform this function.
Don’t Be Afraid to Implement “One Chop.” According to a briefing paper I read yesterday, a representative from Jiading County said his county has already implemented the one–chop measure, but this wasn’t mentioned in Jiang Zemin’s report. Some wonder if we’re backtracking, and if we’ve encountered difficulties and are now afraid to implement one chop?
I can formally state on behalf of Jiang Zemin that he is totally in favor of one chop. This is something we are determined to do. Although it wasn’t mentioned in his report, it was brought up in Huang Ju’s report.11 This was because it wasn’t necessary for every detail to be discussed so concretely in Jiang Zemin’s report. It is something that requires careful preparation, because to truly implement one chop, we must form a new agency. It won’t work if we rely on the old agencies. We need to transfer all the people in charge of project approvals from all departments to this new agency—that’s the only way it can be authoritative. Moreover, it can’t be a joint office—a joint office can’t solve the problem and won’t get anything done. Only the transfer of all those people will guarantee that this agency will have enough experience, knowledge, and authority to warrant only one chop. Such an agency will have to be extremely efficient, and its work will be exhausting. Its members will have to work 24 hours a day and be prepared to do overtime every day.
On my latest visit to Beijing, I reported to Song Ping, indicating that I wanted to establish such an agency and felt its staff should receive somewhat higher wages. Why? Because their work will be grueling. Song Ping approved, saying go ahead and do it. I was afraid that if I increased wages by even a little, someone would complain.
This measure should be a first step for the reform of our government agencies. Right now our government agencies are greatly overstaffed. They have more people than work, with many of them doing nothing. How could we cope if they were all to get large wage increases? Fiscally, we couldn’t afford it; besides, that wouldn’t reward the diligent and penalize the lazy. We must first transform government functions and be less involved in things beyond our control. After this step, we trim staff and increase their efficiency, and finally pay them more. That would work: the total amount paid out for wages wouldn’t increase and we’d be able to get publicly funded consumption under control. I’m preparing to use this agency as a start, as a model for reforming our government agencies.
On the advice of Jiang Zemin and the central government, we’ve decided not to touch government agencies this year and reconsider the matter next year. This year we want to keep the ranks of our cadres steady, keep people’s minds calm, and increase production and exports. We mustn’t put everyone in a panic. But one imperative for me this year is to establish this one-chop agency. It will follow an entirely new model. All of its staff will be key staff from their respective departments; moreover we’ll have open recruitment tests. We’ll select from current department staff, looking for people who aspire to revitalize Shanghai, who want to serve their community wholeheartedly, and who understand technology, their business, and management. That is the caliber we want to work at this agency.
Transform to a Commodity Economy. Things are very difficult in Shanghai right now, especially with our lack of experience in moving toward a commodity economy. We are behind Guangdong and Zhejiang in this regard because we’ve gotten used to eating “imperial rations,” and it’s not easy to change all at once. Meanwhile every province and municipality is now intent on increasing production and importing and exporting on a large scale. They’ve basically “blockaded” Shanghai so that raw materials can’t enter. Shanghai has no edge in raw materials and has to buy everything at negotiated prices, so how can it outdo others?
Our first priority now is to transition to a commodity economy, create a large domestic cycle, strengthen horizontal collaborations, and establish good relations with other provinces and municipalities. This must still be our primary goal, which we must pursue despite our problems—and even though they are also forcing us to go to the Pacific Ocean. There’s no other way but to jump in; we won’t survive if we don’t deal with the outside. Dealing with the outside isn’t easy. We can’t outdo Guangdong at the 3+1 industries12 because it’s very close to Hong Kong and Macao. Nonetheless, we should still try to compete with them.
We recently devolved the power to approve 3+1 projects to the districts and counties, so now they’re very highly motivated. There was a sharp increase in 3+1 projects in the first quarter, which is a very good sign of things to come. I hope our colleagues in the districts and counties will give Guangdong some stiff competition. Although our timing and geography aren’t as good as Guangdong’s, we still have our strengths in these areas. As Jiang Zemin has pointed out, Shanghai has special characteristics that go beyond a capacity for labor-intensive work: we can also handle some more knowledge-intensive and even technology-intensive tasks. Thus Shanghai’s 3+1 industries will have some distinctive features that I believe will enable us to compete with Guangdong.
Attract Foreign Investment. At this juncture, it is essential to attract foreign investment as quickly as possible. This measure is vital for the revitalization of Shanghai.
Large investments are needed to reshape our existing enterprises and turn all or part of them into jointly operated ones. Joint ventures and jointly operated enterprises should move to Pudong or to Minhang. This will draw urban construction and remedy the problems of funding, management, and lack of technology.
Last year, the State Council asked us to attract US$10 billion to $20 billion in direct foreign investment. We must work hard to achieve this, as so doing can greatly speed up the pace of Shanghai’s revitalization. But if the approval system remains long-drawn-out, taking up to several years to process a single project, then nobody will come. That’s why we must first simplify approval procedures. This agency must be established and demonstrate that Shanghai’s approval procedures are completely in line with international practices, that they are the most efficient. I think that if this reputation spreads, there will be hope for Shanghai.
Revamp Shanghai’s Administrative Setup. The city government should be placed under the supervision of the Shanghai People’s Congress, of its Standing Committee, and of the people of Shanghai. I can’t say that I closely read all the briefing papers for this session of the People’s Congress and the People’s Political Consultative Conference, but I did go over each one and found very good basic ideas there for revitalizing Shanghai. They summed problems up well and provided many explicit and workable suggestions for addressing a host of issues.
This is indeed a veritable treasury of ideas for the future work of our city government. I hope the Standing Committee of our People’s Congress will now sort and categorize these suggestions—needless to say, the city government should send people responsible for such work to participate in the sorting. This will eventually become a basis for the administrative program of the city government. I hope this task can be completed very soon so that the city government can study and implement the summarized ideas. Of course many of these ideas may not be achievable right away, but at least we should offer an explanation and then gradually implement them in the future.
Increase Production and Exports. Another of Shanghai’s most pressing tasks this year is to increase both production and exports. If we cannot make headway here, everything else is just wishful thinking. If we just meet the requirements of our fiscal contracts but don’t exceed them, there’ll be many things we won’t be able to do. That’s why our current task is to increase production and exports.
One of the briefing papers urges us to recognize that Shanghai’s difficulties haven’t bottomed out yet, that we should be feeling a sense of crisis and should respond by summoning up a strong fighting spirit, because “a desperate army is sure to win.” But we have a different problem right now. There is a lack of confidence today because of various difficulties, especially the rise in prices, which is having an adverse affect on the standard of living. People are grumbling a lot about this and other problems, which is understandable. However, because some workers were upset about their benefits or about other issues, they sabotaged their production equipment. When I informed Jiang Zemin of this yesterday, he said it must be dealt with firmly because it is going over the line. It’s understandable if you air your grievances, but sabotaging equipment is absolutely impermissible. If you break the law, you should be dealt with severely, in accordance with the law. This kind of behavior doesn’t do a shred of good for solving Shanghai’s problems or for revitalizing Shanghai. I hope those in the departments concerned and the relevant factory directors pay very close attention to this problem. What we need now is to raise people’s spirits; we can’t continue being discouraged.
The key to increasing production and exports is to increase production of our competitive products. Recently, the Municipal Economic Commission and Planning Commission identified several dozen competitive products—we must increase their production. We’ve already spent over US$10 million on an industrial sewing machine project. I handled this while I was at the State Economic Commission. These machines are even more advanced than the Japanese models and demand for them exceeds supply both domestically and internationally. Last year, we produced 10,000 of them, of which 4,000 were exported. The production capacity is 90,000. I’m asking that we produce 30,000, preferably all for export. This way we can dominate the international market.
However, a recent briefing paper indicates that first-quarter production [at this factory] not only failed to increase, but it actually decreased. As a factory director, you had better do your job well—you owe it to the people of Shanghai. I don’t know if director Wu Chenglin of the Municipal Bureau of Light Industry is here today. If he isn’t, I hope to relay this message to him: be sure that second-quarter production goes up. If it doesn’t, I suggest that you take over as acting director of this factory and see that it does go up. We’ve spent so much money. If you don’t do your job well, how are the people of Shanghai supposed to eat?
Current first-quarter production at our local state-owned enterprises (SOEs) has decreased and fiscal revenues have declined by 8%. We should feel a sense of crisis, we should rouse ourselves and catch up, we should turn this situation around as quickly as possible. After checking with Jiang Zemin, we plan to hold a citywide meeting on the “two increases and two decreases”13 in the near future. We want to mobilize the energies of all the people in the city to do this, to quickly increase production and exports. Once this move is made correctly, everything will begin to boom.
Make the “Vegetable Basket” the Breakthrough Point. Why should the new administration first focus on the vegetable basket? Let me start by discussing prices. To keep prices stable, we must first strengthen our management of prices—that is, we mustn’t arbitrarily raise prices. We must be exceedingly cautious about adjusting prices of goods that are controlled or set by the state or set by Shanghai. When the prices of certain goods were adjusted a while back, it was truly because we had no choice. Without those adjustments, enterprises wouldn’t have been able to produce and would have had no profits. Now prices in Shanghai have bottomed out, and if we don’t adjust them, the overall situation here will continue to deteriorate.
Henceforth price adjustments for these goods must be handled with great caution. We are telling enterprises that over the next few years, no matter how the price of raw materials might rise, you must increase production and economize through the “Two Increases and Two Decreases” campaign. Use your potential to absorb those increases and don’t count on raising prices. Last year our consumer price index rose 8.8%, of which 6.6% came from increases in the prices of non-staple foods. The proportion of other price increases was very small. For small commodities, we are deregulating prices. If we don’t deregulate, nobody will manufacture them. Now all the raw materials from elsewhere are going up in price. If you don’t allow people to correspondingly raise their prices, they won’t be motivated to produce. If you try to control the price of small goods, ultimately you won’t even be able to buy needles and thread.
Right now Shanghai is not nearly what it used to be. Not only are our small goods inferior to those in Jiangsu, Zhejiang, and Guangdong, but they’re even worse than in Beijing and Tianjin. Many products are unavailable because it’s hard to get raw materials and people aren’t motivated to make them. However, deregulating the prices of these small goods won’t really have much of an impact on people’s lives. Although it seems that price increases are very widespread, that the prices of a thousand items have gone up, in fact this is the case for a very small portion of living costs, the most important being non-staple foods. So that is why we must increase their production.
Several of the explosive problems Shanghai is facing now cannot be easily solved in a short time. Traffic, housing, environmental pollution—none of these issues can be addressed in a short time. People will have to continue cursing us for several years—this can’t be helped. But surely the vegetable-basket problem can be solved? Surely Shanghai’s climate and industrial foundation aren’t worse than Tianjin’s and Beijing’s? As long as we exert ourselves and really work hard, we can definitely increase production. This is the only project, if done well, that will enable us to fire up the people of Shanghai, because everyone has to shop daily for their vegetable basket. The minute they feel that prices have gone up or that things are unavailable, they’ll be swearing.
This is why we must choose the vegetable basket as our breakthrough point. To this end, Jiang Zemin and I asked Pei Xianbai14 to head a group of people from the Municipal Office of Finance and Trade and the Agricultural Commission to visit Beijing and Tianjin before the Spring Festival to study the non-staple situation there. They then spent two months on extensive investigations and research, which led them to devise a method for developing the production of non-staple foods in rural areas and reforming the purchase and marketing system. The Municipal Party Committee has established a group to be in charge of production and supply of non-staples. I will head this group, with [Vice Mayor] Ye Gongqi as deputy head. I told Ye Gongqi that regardless of what he did in the future, he could not leave office until this task is accomplished. We are also asking Pei Xianbai to serve as adviser. He has worked in finance and trade for decades. If I had to do what he did in those two months, I wouldn’t have finished in a year.
Now we have a plan that tentatively sounds very good as it applies to management of the entire chain for meats, eggs, and vegetables, from production to wholesaling. In the future, if people in Shanghai have no vegetables to eat, they can go to the director of the Agricultural Commission, where there’ll be a responsibility system. In fact, this work is already under way, and those at the commission are focusing very hard on it. Of course this means the Agricultural Commission and the Office of Finance and Trade must ensure close cooperation. Without joint efforts, this work cannot be done well, but you also mustn’t raise your hopes too high. I’ve promised everyone that at least in the second half of this year, our energies will be concentrated on producing non-staples.
Focus Intently on Integrating Sci-Tech with Production. We must make full use of our strength in sci-tech where production is concerned. Just now Chen Yi15 wrote a note asking me to comment on regaining Shanghai’s lost advantages. Actually, we haven’t lost our edge in sci-tech—it’s still in Shanghai, and the question is how to fully utilize it. Jiang Zemin and I have entrusted this work to Gu Xunfang,16 a retired colleague. During the Cultural Revolution, he was at the municipal office concerned with catching up and surpassing,17 and we’re going to use their methods for this work. Through him, we convened scientific and technological forces from all sectors, held a good many meetings, wrote a good many draft proposals, and finally decided to focus on 23 major scientific and technological projects. In tackling these projects, our forces will give impetus to science, technology, and production in all of Shanghai.
My initial thought is that 23 projects may be too many for the city government. It would be enough for it to focus on 10, leaving the rest to the various departments, districts, and counties. For example, if we could indigenize production of the Santana so that we make 60,000 in 1990 and 150,000 several years after that—that would be wonderful. Another example: when Shanghai Bell has completely indigenized production of all 360,000 program-controlled telephone switches, and when we have mastered the technology of integrated circuits, the entire economic level of Shanghai will be raised. Yet another example: after we achieve breakthroughs in making complete sets of equipment for producing 300,000 tons of ammonia and 300,000 tons of ethylene, and in making 600-megawatt power generators, production values and profits will skyrocket each year. The city government will marshal its forces to tackle these 10 projects. I propose that we form 10 leading groups and invite 10 retired colleagues to head them.
Develop Education. Jiang Zemin has already affirmed the importance of developing education, and it is also in the spirit of the 13th National Party Congress, so we should carry it out. Views of the delegates should be mentioned as well. First of all, everyone asks that funding for education be increased. Jiang Zemin has already agreed to the general principles for this work, and we will surely abide by these principles. However, some delegates are afraid that we won’t live up to our words and want the candidate for mayor to promise an increase of RMB 15 million; otherwise they’ll abstain from voting for mayor. I hope you’ll be more understanding about this. We can’t make such a promise for the time being because of the enormous difficulties we are facing. Nobody can predict whether production and exports can be increased, or whether fiscal revenues will be enough for us to deliver the contracted amounts. Any words to this effect would merely be an empty promise.
So what can I guarantee? One thing is that if we complete our tasks well, the first increase will be for educational funding; if we do not complete our tasks well, we will first cut back administrative costs and infrastructure expenditures, but will absolutely not cut educational funding. I can only say that much—can you be understanding about this? The second thing is that we must strengthen primary and secondary education—this is fundamental. My own experiences confirm that primary and secondary education are extremely important. My deepest impressions of things I have studied and the lessons I most remember are from my secondary school days. Thinking back, secondary school algebra left a much deeper impression on me than college calculus. Many memories from college are not as clear. That’s why I have the most profound respect for my secondary school teachers. My impressions of my secondary and primary school teachers have always been unforgettable. The most important thing for Shanghai is to strengthen primary and secondary education and raise standards there; then, building on this foundation, it can strengthen vocational training. If we do this, Shanghai’s revitalization will be within sight. I’m not saying that we don’t have to strengthen university education—this is not what I mean. The main concern of universities should be quality, not quantity, but we need to pay more attention to primary and secondary education.
Vocational training is also extremely important. When I talked to the leaders of Volkswagen AG a while back, they said that the secret to Germany’s revitalization was very simple—it was vocational education. I went to Germany especially to study their vocational training, and what I saw in several states was indeed outstanding. Every factory has a vocational school where they train apprentices with the best equipment. Moreover, the apprentices don’t necessarily have to work in the same factory; they can go to other factories. It isn’t easy for private businesses to do this. Yet they have such a strong training network that it has enabled them to produce the highest-quality goods in the world. Our apprentices currently start working without any training—it would be surprising if they didn’t ruin many pieces of equipment! To reiterate, we urgently need to strengthen primary and secondary education and then work on vocational training. We don’t want everyone to head for the universities. That’s the only way for Shanghai to truly be revitalized.
In conversation with some of the council members of the Red Scarves and delegates to the second Young Pioneers Congress at the Children’s Palace of the China Welfare Institute, May 20, 1988. (Photograph by Zhou Xinduo)
The third imperative is to strengthen educational management. After a group of foreigners recently came to Shanghai on a study tour, their follow-up report stated that their discussions with some factory directors were very disappointing because the [training] levels of Chinese personnel working on large-scale imports and exports and on the country’s commodity economy were too low.
It’s true that our factory directors and managers need good training. Many factory directors in Shanghai aren’t even up to the level of a shop foreman in other countries. Some factory directors say, if you don’t give me the raw materials, I won’t be able to produce; if my products don’t sell, that’s not my problem; if I lose money, you should subsidize me; you should give me tax exemptions and special treatment. This sort of factory director and manager is basically unqualified, and we must educate them in modern management.
With so many management schools in Shanghai, we should systematically send our factory directors and managers here, particularly those engaged in large-scale importing and exporting. At the moment, there aren’t many who can speak a foreign language, understand technology, understand the law, and know their business thoroughly enough to negotiate with foreigners. We need to focus hard on training them. If we don’t have at least 10,000 such people, how can our country engage in large-scale importing and exporting? How can we make Shanghai better? Preparatory work for building such a large team must start now.
The problems of education cannot be solved by increasing funding. A case in point is the lack of attention being paid to talent, as reflected in the brain drain from Shanghai, which is extremely serious. I wrote three opinion pieces on this—the Shanghai newspapers didn’t publish them, but the ones in Beijing did. How can we keep talent in Shanghai?
First, our scientific and technical personnel have to go into large and medium enterprises and break down the [occupational] barriers between them. Only by integrating with them can your value be demonstrated. That’s how it’s done in other countries, as I noted when I visited Japan and the United States and saw how their scientific and technical people function in these enterprises. Although our large and medium enterprises are having difficulties—they lack vitality and have little money of their own—this situation is about to change. Shanghai is introducing fiscal contracting, and after enterprises start this system, their funds will grow. Also, competition will force enterprises to place increasing value on sci-tech, which they don’t attach enough importance to right now because their old products continue to sell. In the future, this won’t work, so far-sighted factory directors should pay attention to talent and to technology forthwith. If we can spark the enthusiasm of both sides, we’ll be able to do a good job with sci-tech and with production, and we’ll also be able to gradually increase the income of knowledge workers.
Second, scientific and technical personnel can go to work at foreign-invested enterprises, where wages are always a bit higher. They can at least go to township and village enterprises present throughout our rural areas. Their more flexible systems can help improve the incomes of intellectuals. But this is not just a question of money. The most important thing is to raise the social status of primary and secondary school teachers. We should respect them and use various ways to elevate their status. This is one way for us to retain talent, but we should use a variety of strategies, such as paying more attention to Teacher’s Day.
Although it will be hard to improve material conditions within a short time, we ought to give talented individuals a stronger feeling of caring. Of course this won’t be easy to do. In our current phase, before the effects of many measures take hold, I hope leaders at all levels will work harder on persuading technical personnel who want to leave to consider the big picture. I believe that they too want to revitalize Shanghai and hope they will temporarily overcome any difficulties they face and not continue to leave. We will gradually solve the existing problems.
Build Urban Transportation and Housing. This is a touchy issue, and one surrounded by high public expectations. I’ve received a great many letters from people about this question, but we truly aren’t able to grant every wish. This is a problem that any city government would have a hard time solving within a short period. Shouldn’t there be some prioritizing or sequencing here—beginning with better work on Shanghai’s transportation? If transportation isn’t improved, where would you build housing?
At present, we are hoping to develop Pudong, to build several bridges across the Huangpu River and to disperse the population out toward Pudong. Only then will it be easier to renovate the old urban areas. This is extremely important: Pudong is Shanghai’s hope for the future. We want to build a “New Shanghai” there to relieve the pressure on the “Old Shanghai.” That’s why Jiang Zemin attaches great importance to developing Pudong and will be chairing a discussion on this topic very soon. This development is a grand scheme that cannot be implemented in a short time—we must solidly work at it, tasting the bitter before the sweet.
The highest priority now is to strengthen existing infrastructure management. While we can’t make great changes, we can at least make some improvements—for example, by separating pedestrian and vehicle traffic flows. After I criticized them twice, I was very pleased to see the Municipal Sanitation Department solve the city’s garbage problem. As long as everyone works hard, takes action on public sanitation, follows through with contracts, and if the district and county heads assume responsibility, we should be able to do well in this area.
Another concern is environmental pollution: I hope that those in industry, especially the factory directors, take note of this. At present it’s very hard for us to clean things up, but at least you shouldn’t add new pollution. Many factory directors currently disregard the big picture. They build factories upstream of our water sources and dispose of their waste materials in the water. These factory directors must be warned: I believe the deputies of the People’s Congress here today would not put up with any practices that create such pollution in Shanghai. We must be strict about controlling environmental pollution: we must not only stop polluting, but we must also prevent it.
Today I can only say this much: I’ve already seen the briefing papers and am very touched by the confidence in me. I’m not only very grateful for your support but also recognize through your expectations the enormity of the task. Henceforth, under the leadership of the Party Central Committee, the State Council, the Shanghai Municipal Party Committee, and of Jiang Zemin, and relying on the People’s Congress deputies here and on the city’s entire population of over 12 million, I will be sure to work conscientiously and diligently until I take my last breath.
1. At the Fourth Plenary Session of the First Session of the Ninth Shanghai Municipal People’s Congress, elections were held for government leaders in Shanghai. As a candidate for mayor, Zhu Rongji met with deputies to the People’s Congress before the elections to introduce his background, political record, and administrative program.
2. In 1952 Ma Hong was secretary general of the Planning Commission of the Central People’s Government.
3. In 1952 An Zhiwen was a member of the Planning Commission of the Central People’s Government.
4. In 1978 Ma Hong was director of the Institute of Economic Research at the Chinese Academy of Social Sciences.
5. Song Ping was then a member of the Politburo and director of the Party’s Organization Department.
6. This refers to the “Report on the Work of the Government” delivered by Jiang Zemin at the First Session of the Ninth Shanghai Municipal People’s Congress.
7. The “position paper” was a letter of February 28, 1988, to Li Peng and Yao Yilin about increasing production of Santanas.
8. Translator’s note: in 207 CE, the renowned Chinese military strategist Zhuge Liang (203–53 CE), who had been living in seclusion in Longzhong, met there with Liu Bei. He explained his strategy for unifying China and restoring the Han Dynasty, and this came to be known as his “Longzhong Exposition.” Acting on this plan, Liu Bei established the Shu Han regime in 221 CE.
9. On March 30, 1988, the First Session of the Seventh National People’s Congress held its second press conference. Leading representatives from Shanghai and Fujian Province were invited to respond to questions from Chinese and foreign reporters at this press conference.
10. “Vertical” and “horizontal” are terms frequently used in Chinese economic work. Vertical jurisdictions are vertical lines of management within economic departments, while horizontal jurisdictions refer to the unified management by various local authorities of economic work and sectors within their jurisdiction.
11. This refers to the “Report on the Draft Plan for Economic and Social Development in Shanghai in 1988,” delivered by Huang Ju at the First Session of the Ninth Shanghai Municipal People’s Congress.
12. The “3+1” industries are the ones that process imported materials, process imported samples, assemble imported parts, and engage in compensation trade.
13. The “two increases and two decreases” were increasing production and decreasing waste, and increasing revenues and decreasing expenditures.
14. Pei Xianbai was then a vice chairperson of the Standing Committee of the Shanghai Municipal People’s Congress.
15. Chen Yi was formerly deputy Party secretary of Shanghai, head of the Municipal Party Committee’s publicity department, and a vice chairman of the Standing Committee of the Shanghai Municipal People’s Congress.
16. Gu Xunfang was formerly vice chairperson of the Shanghai Planning Commission, vice chairman of the Industrial Production Commission, and director of the Bureau of Production Technologies; he was then a member of the Standing Committee of the Advisory Group on Urban Administration.
17. In the 1960s Shanghai established an office to catch up with and surpass advanced international standards.