[Documents menu] Documents menu

Date: Wed, 24 Sep 97 15:22:17 CDT
From: NY-Transfer-News@abbie.blythe.org
Subject: Privatization f Corruption in China/GL Wkly
Privatization f Corruption in China/GL Wkly id OAA25246; Wed, 24 Sep 1997 14:26:26 -0400
Via NY Transfer News Collective * All the News that Doesn't Fit
from Green Left Weekly #290 9/24/97

Privatisation push at Chinese CP congress

By Eva Cheng, Green Left Weekly, #290, 24 September 1997

Chinese President Jiang Zemin has pronounced a firm intention to further restore the rule the market and private profits to China at the Communist Party's 15th congress, held in Beijing September 12-19. Despite continued rhetoric about upholding socialism, all policy initiatives announced at the congress pointed to further transforming China away from a social system geared to address social needs.

As a fig leaf for its capitalist orientation, Beijing has been trying to sell the mechanical theory that majority state ownership of key assets equals socialism. It equates control by the state, which it rules, with public ownership, ignoring the fact that equality between the two couldn't exist without democracy.

To disguise its latest initiatives, the party simply plays with words, redefining public ownership.

Jiang told the congress that the public sector includes not only the state-owned and collectively owned enterprises, but also their shares in enterprises of mixed ownership. But under the capitalist reforms first started by Deng Xiaoping, such classifications have increasingly become formal categories bearing little of their former content.

Since the early '80s, state firms could be leased to private interests and run in substance as private firms in an arrangement that is renewable every five years. As early as 1987, 60% of smaller state firms - whose definition was not spelled out but which included companies with fixed assets of 4 million yuan (US$690,000) and profits of 400,000 yuan - had been leased out, according to the official news agency, Xinhua.

Meanwhile, many bigger state firms have been corporatised. Whether with a stake held by private capital (including foreign) or not, they produce for profits and have long stopped being part of a larger plan to address social needs.

Jiang said that this separation of ownership and management was a symbol of modern enterprise and scientific management. He told delegates that more state enterprises would undergo such a transformation in coming years. This could mean the loss of job and essential welfare for more than 100 million workers.

Collective firms are, in theory, owned by their workers. But many collective firms are in fact controlled by the municipal and district authorities, with the profits usually going to their superior bodies. Officials have revealed in recent years that many private firms were deliberately mis-registered as collectives in an attempt to qualify for supplies and other concessions.

The privatisation of the state sector has been a key avenue through which corrupt officials looted state property in recent years. Grossly undervalued sales, with officials taking a handsome cut in the process, are estimated to have cost the public coffers at least US$60 billion in the last 10 years.

Jiang's unreserved call for further privatisation, which he prefers to call a diversification in the forms of public ownership, will almost certainly be taken by the provincial barons as a mandate for more looting. Apparently in fear of such a scenario, Premier Li Peng and Vice-Premier Zhu Rongji warned delegates not to kick up a whirlwind forming joint-stock companies or selling off state assets. Vice-finance minister Zhang Youcai cautiously emphasised the danger of fraud in such a transformation.

International capitalists heartily welcomed Jiang's announcement. The International Monetary Fund said Beijing's control of the economy is remarkable but the diversification of the ownership of state enterprises is a solution to China's residual inefficiency. The credit rating agency Moody's, whose ratings shape the cost of international borrowing, said after Jiang's report that it was prepared to upgrade China's rating if further positive indicators emerge from the congress.

Two US warships sailed into China's eastern port of Qingdao on the eve of the congress for a five-day visit.

Despite Beijing's enthusiasm to market its open image, it has shown little hesitation in suppressing dissent or excesses in media reports. At least six people were detained by police during the congress for offences such as attempting to present petitions.

Coverage by the International Herald Tribune and the Hong Kong-based South China Morning Post was reportedly heavily censored. It was also reported that censors ripped whole pages from imported English-language newspapers that carried photographs of police manhandling protesters outside the congress venue.

In what could be an indicator of dissent within the Communist Party, a call for reversing the official assessment of the Tiananmen protests of 1989 - hitherto considered counter-revolutionary - was distributed to delegates in the name of former premier Zhao Zhiyang.

Zhao, who spoke against the killings, has been under house arrest since the massacre. The CCP's former chief in Hong Kong, Xu Jiatun, in exile in the US since being removed from power for objecting to the 1989 massacre, backed Zhao's call from the US.

Such calls for reassessment have been an important expression of political dissent in China. Massive protests in April 1976 in Tiananmen - only months before Mao's death - were violently repressed and officially declared counter-revolutionary. A reversal of the official assessment by Deng Xiaoping in 1979 was immediately followed by the sprouting of pro-democracy groups and publications.

Any measures would be justified, Jiang said, so long as they raised productivity, the national strength and the standard of living.

He mentioned Deng more than 50 times in his report and proposed that the congress endorse Deng's thoughts as part of China's guiding ideology, on a par with Marxism, Leninism and Mao Zedong Thought. The proposal was duly accepted.