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8 1 Indigenizing Production of the Santana1 December 24, 1987 At the request of Lü Dong2 and Yuan Baohua,3 I’m attending this conference on production of the Santana on behalf of the State Economic Commission , and I would like to express hearty greetings to all the delegates here! This conference was convened by the China Automotive Industry Federation and the Shanghai municipal government following extensive preparations and in-depth, detailed research. Mayor Jiang Zemin and Vice Mayors Huang Ju and Li Zhaoji all personally focused on this meticulous work, which has ensured a smoothly run conference in all respects. I especially wish to point out that leading members of the State Council have also given their personal attention to indigenizing production of the Santana and have inquired about it many times, particularly this year. Various ministries and commissions of the central government have been very supportive as well. Given this wide government support and the enthusiasm whipped up by you in Shanghai, I think the project will undoubtedly succeed. Now I’d like to discuss several issues. 1. The Significance of Indigenizing Santana Production Broadly speaking, indigenizing Santana production is very important for the application of imported technology. Beginning in 1983 and in keeping with the State Council’s overall plan, we imported 16,000 key technologies and pieces of equipment at a cost of over US$10 billion. Of this sum, US$3.7 billion came from the State Economic Commission and covered 3,900 items used to upgrade the technologies at a group of enterprises. These have played a major role in 1. This is the main part of a speech by Zhu Rongji at a conference on indigenizing production of the Shanghai Santana. It was jointly convened by the China Automotive Industry Federation and the Shanghai municipal government. At the time, Zhu was a vice chairperson of the State Economic Commission. On December 22, 1987, the Communist Party’s Central Committee appointed Zhu deputy secretary of the Shanghai Municipal Party Committee and nominated him to be a candidate for mayor of Shanghai. 2. Lü Dong was then chairperson of the State Economic Commission. 3. Yuan Baohua was then a vice chair of the State Economic Commission. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 8 12/26/17 12:00 PM Indigenizing Production of the Santana 9 stimulating the domestic market and increasing exports. However, these projects have yet to maximize their potential. Only 60% of them have started producing , with production expected to crest next year, and it won’t be until the following year that their benefits can be fully realized. Moreover, a very big problem with this round of technology imports is that they have not yet been applied, absorbed, and indigenized. In some cases, we have imported technologies and equipment but lack the necessary raw materials and associated technologies , so it’s still very hard for them to yield benefits. To truly obtain benefits , we must do a good job of application. In 1985 the State Economic Commission began to shift its focus toward applying imported technology. This August, at a national work conference in Dalian, it drew up five preferential policies on applying this technology and indigenizing production,4 which, with the State Council’s approval, have now 4. The “five preferential policies” were policies for applying and indigenizing imported technologies in key projects supported by the state. They consisted of (1) reductions or waivers of product taxes; (2) permission to collect forex for a portion of domestic sales; (3) reductions or waivers of customs duties and product taxes on imports; (4) special attention and priority for projects that are part of the “Dragon” program to be given by all departments and regions in forex allocations, loans, technology development funds, and allocations of materials; and (5) commendations and incentives for enterprises and publicly supported institutions that undertake key state projects for applying, absorbing, and indigenizing imported technologies if their work is completed on schedule and with outstanding results. A one-time monetary award may be given. Accompanying Deng Xiaoping on an inspection tour of Shanghai Volkswagen Ltd., February 6, 1991. Front row, second from left, Zhuo Lin, spouse of Deng Xiaoping; fourth from left, Deng Rong, daughter of Deng Xiaoping; far right, Lu Ji’an, chair of Shanghai Volkswagen Ltd. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 9 12/26/17 12:00 PM 10 Indigenizing Production of the Santana been circulated as National Document 99 (1987).5 The commission has created 300...


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