AP : China's Communists Approve Reforms

[bich dao <daotb@yahoo.com>]

China's Communists Approve Reforms

By CHARLES HUTZLER Associated Press Writer

BEIJING (AP) -- China's communist leadership on Wednesday endorsed stock
issues and called for privatization in all-but-name for the sprawling
but failing state sector in an effort to restart reforms stalled over
the last two years. 

Ending its annual fall meeting, the Communist Party's policy-setting
Central Committee backed solidly capitalist remedies for all state
industries except high-technology and other strategic sectors. 

The prescriptions mildly advanced reforms the party endorsed at an
extraordinary congress two years ago.  Opposition from conservatives,
fears of unrest from rising unemployment and slowing economic growth
stymied those measures, allowing the vast, cosseted and debt-burdened
state sector to further wither. 

Amid intense politicking that continued into the four-day central
committee meeting, President and party chief Jiang Zemin spent four
months personally lobbying provincial politicians -- many of whom sit on
the 336-member Central Committee -- to support renewed reforms. 

Bolstering the leadership, the committee appointed Vice President Hu
Jintao vice chairman of the party commission that runs the politically
influential military.  Hu, 56, is being groomed as the heir-apparent to
Jiang and the promotion is seen as a necessary step in the succession. 

The committee, in a statement that will become a guide for government
policy in the coming months, called enterprise reform an ``important and
urgent task.''

``Facing intense
international competition at the turn of the century, we must increase
the strength of our national economy and defense and of national
cohesion,'' said the statement, released by the official Xinhua News
Agency and read on state television.  ``No time can be lost in pushing
forward the restructuring and development of state sector.''

The committee backed experimentation to attract new capital to ailing
industries, with particular emphasis on stock issues and
``blended forms of economic
ownership'' -- a euphemism for
``privatization,'' a taboo
among conservatives in the 61-million-member party. 

Committee members also gave a vote of support to embattled Premier Zhu
Rongji, re-endorsing his pledge to lift most large and medium-sized
enterprises out of debt in three years. 

In an indication of the conservatives' residual strength, the committee
said the state would retain control of all ``important enterprises'' and
remain dominant in vital sectors.  The statement identified only
emerging industries and high-technology businesses outright for
protection. 

The committee also called for better management, corporate-style
governance and incentives for the generally inefficient state sector. 

Revamping the state sector has been the most intractable and delayed
reform in China's 20-year attempt to replace central planning with free
markets.  Although state industries produce less than half the value of
goods, they employ more than half of all urban workers.  Their debts
account for most of the nonperforming loans that have seriously weakened
state banks. 

^CAP-NY-09-22-99 1141EDT

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