Chinese Stalinists face crisis of confidence

Scan page 4

* Yaobang on the streets.. HIN A'S new openness to destern influences has ten much vaunted in the over the last 2 or 3 ars. We've read about new liberalisation in the i, greater acceptance for lestern classical music, a rival of the ballet and so There was the, albeit pet-lived, period of parent freedom of seech, den people could publish tical propaganda. Inteldenounced and shed during the Cul• Revoution have been jabilitated. And China's ders have been even vehement than and Thatcher in denunciation of viet expansionism' 'rightist' moves been accompanied far-reaching economic ans, in the direction of ives, competition, m investment and 80 problems of the ese economy, which le reforms are supposed tackle, are shared by I other Stalinist-ruled ts. whatever the declardifferences between and Peking.

Mages of consumer # overdusphasis on slow lopment in the infrasure of the economy: i are problems comto China, the USSR, ad and other countries totem Europe. i reforms' that were faced in 1978 in The Modernisations" isimilar, in their directo other programmes axed at various times • USSR. Hungary and idaria. They also est a return to the es pursued before the Revolution of • orerall goal of the • * 10 'readjust, DEE. consolidate prose: known as ence policy' sorres the moder→ casion "C SEATE sweeping changes? that the average party official or cadre has in the leadership. Because the struggle at the top between left and right factions seems to be only precariously solved, many cadres are worried that the pendulum could swing back and the 'reforms'" be reversed.

No-one wants to be seen to be too enthusiastic about. implementing a policy that might be described as 'capitalistic roader' in a few years time. the whole programme has; therefore, run into a certain amount of passive resistance, and central CCP leaders have been calling for a purge of the This is particularly true in the countryside. A general scheme of new incentives and greater autonomy has been introduced in all sectors of the economy. In agriculture, this means allowing 'familv production' , thus undr ing the commune system.

So long as a family unit produces a certain quota of grain (which is not, in practice, unachievably high) they can keep any surplus themselves. Previously the collective benefited from increased production, so there was less incentive, according to the theory, for any individual peasant or family to put in more effort.

In the new system, the commune has to divide the land and equipment among the family units, although tractors and major machinery are still shared.

Commune

The: commune becomes little. more than a welfare unit.

The peasants themselves might be expected to like such a system, but it has only succeeded in poorer communes, where the scope for increasing income is greater: There are reports of some of these poorer peasants increasing their income by several hundred per cent. However in other communes that are already fairly productive, the change has had little impact.

The clear implication that the main obstacle increasing productivity not peasants' failure work hard.

It may be, however, that the scheme has not been very widely implemented, because of the resistance of the party cadres who see their role and power within the commune being undermined.

Grain output per capita in China is already quite high. it is much higher, for instance, than the USSR where agriculture is extremely inefficient, but it is also higher than the USA.

Nevertheless, China is handicapped by the shortage of arable land relative to the large rural population, which limits the possibilities of expansion.

Better fertilisation and pest control is being encouraged for more intensive farming, but the main solution, being vigorously pursued, is a further expansion of the population control programme, with the aim of limiting population growth to 1% per annum.

The official report to the National People's Congress in December claimed that 1981's total grain output would be close to the 1979 level"

In industry, also, the new incentive schemes have not been very successful.

Bonuses have been made available, but instead of being restricted to the more productive workers, they are distributed to everyone as part of wages. The so-called "capitalist incentives' seem to have little impact.

The output of heavy industry dropped 1981.

World trade

Other industrial reforms have fared rather better: many factories have switched production from heavy machinery to consumer goods, which are becoming more widely available. there is, apparently, a great boom in the television industry: The agricultural sector's share in total investment has been steadily increasing: from 10.7% in 1978 to 14% in 1979.

Individual enterprises now have more say in local decisions, like how to distribute income within. the factory, who to build up trade links with and so on.

This has helped to increase China's participation in world trade, which has probably been the most successful element of the reform.

Some areas have been designated. 'export oriented' and given permission to make their own foreign contacts, rather than continually going through the bureaucratic machinery.

Joint Stock ventures between Chinese enterprises and foreign capitalist concerns are now permitted, mainly in export industries, as well as loans from foreign banks. This is an area where capitalists can now make their own profits out of Chinese workers, in a similar way to equivalent projects in the USSR, Rumania and other Eastern European states.

The two major economic problems that the "readjustment' is failing to tackle are the development of infrastructure and the energy crisis.

Increased production and an expansion in trade both required improvements in the infrastructure: transport and communications. It is no good producing vast quantities of goods when there are no trains or lorries to take them away from the factory.

Despite a 30 per cent increase in foreign trade in the first year of the modernisation, Chinese ports haven't been improved to cope with this. Now about 230 ships are arriving at Chinese ports everyday, but there is only the facility to load and unload about 90.

Ships have to wait an average of 3 days for a berth, compensation • has to be paid to the shipowners, and the overall cost of freight is increased enormously. Obviously, a dramatic improvement will be necessary if the expansion is to continue, and this has now been given a high priority.

The energy crisis is a similar problem: Although China has massive energy resources, its industry gobbles up the energy in an extremely inefficient manner, so that production no longer keeps pace with consumption. for every 1% increase in GNP, energy consumption increases by 18%.

Not only that, but energy production is actually stagnating because there has been no long term plan to tap the huge reserves efficiently. Because of the enormous demand, current output has been increased rapidly, without any long term policy on future production. In 1980 production of coal actually fell by about 4.6%.

Transport problems hold things up here as well, because most of the coal reserves (which provide 70% of energy use) are in the North West of the country, while the main industrial base is on the Fast Coast. so the railway network, as well as coal production, has to be expanded.

Oil reserves

The Chinese leadership are trying to tackle this problem by developing future resources. New investment in tunnelling has started, and there is a massive offshore oil exploration project. It is estimated that China has the third largest offshore oil reserves in the world, and this is without any exploration in the deeper waters.

The returns on these projects will be slow: the oil is not expected to flow much before the 1990s, and in the meantime, China's modernisation is being held back.