China signals it's time for economic reforms in cities
The types of economic reform that have produced four bumper harvests in China may soon be applied to cities. China is set to unveil sweeping reforms for its urban economy at the next plenum of the 12th Central Committee of the Chinese Communist Party, expected later this month.
Deng Xiaoping, the country's paramount leader, has announced the reforms are of ''historical significance.'' They are expected to include major price reforms and the full-scale introduction of the responsibility system - a form of contract labor - to the urban workforce, and improvement in the mobility of highly skilled personnel.
Mr. Deng introduced major reforms to China's agricultural sector in 1978 that prompted a massive rise in productivity and four years of bumper harvests. He said the urban reforms would be introduced to keep pace with the success of the regime's rural policies.
''Now the focus of the reforms is shifting from the countryside to the cities. This means that all-around reforms are under way,'' Deng said, according to the official New China News Agency.
''The peasants are getting better off, and the people of the whole country are pleased.... If the urban reforms are not carried out, it will prevent the countryside from making futher advances. At present the cities cannot meet the needs of 80 percent of China's population,'' he said, referring to the country's 80 million peasants.
The most significant reform is likely to be in pricing, which is still centrally controlled and has hurt the economy with long delays and poor allocation of resources.
The complications caused by the Soviet-style pricing controls have been highlighted only in the five years since Deng first introduced the responsibility system in agriculture, breaking up Mao Tse-tung's people's communes and linking a worker's income to his labor.
At present, 25 percent of the government's spending is on price subsidies designed to keep the prices of basic items such as food, housing, and transport in line with average incomes.
The Communist Party is also due to meet next year to map out the country's economic targets in the next five-year plan, scheduled to begin in 1986.
According to the New China News Agency, Deng said the new urban reforms would cover industry, commerce, science, and culture. It is believed the other major reform would be the full-scale introduction of the responsibility system to the urban workforce.
This would probably mean that enterprises would hire workers on a contract basis and provide bonuses for work completed above the contracted level. But no details have yet been released as to exactly how the responsibility system will be adapted to industry.
The contract system would also improve mobility of labor among skilled workers and intellectuals.
Deng emphasized that this issue would be discussed at the plenum. ''We still lack knowledge in economic development. The question of intellectuals, a special question, has not been solved well so far.''