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33 7 Unite and Strive Together to Do Good Economic Work1 March 21, 1988 Like the country as a whole, Shanghai can say its economic situation is good. We’ve basically achieved both stability and growth in our economic development , even though the pace has been a bit slow. For various reasons, however , Shanghai is still experiencing some difficulties and is not yet able to have “relatively good results as well as a relatively good pace.” Even so, we should still believe in our own abilities, be confident that we can turn this difficult situation around, and take advantage of the fiscal contract system2 that the central government is allowing us to use in order to rise from this nadir. This advantage is not easy to come by—in all of China, only Guangdong and Shanghai have been permitted to engage in fiscal contracting. In response, many provinces and municipalities have asked to do likewise, but the central government would not agree to it. For Shanghai, this development will prove to be a tipping point. Many people still haven’t changed their thinking—they continue to eat from the same “big pot” of the central government and really need to change their mindsets. Though we’re not out of the woods yet, it won’t be too long before we can see light at the end of the tunnel. At the moment we are facing two most urgent problems. The first is hepatitis .3 It never rains but it pours—things were already difficult enough when the hepatitis A epidemic broke out. But because the city’s entire population stood united in an all-out effort to win the battle, it has now basically subsided. This 1. This is a speech Zhu Rongji delivered at a meeting of Shanghai Party members in responsible positions. 2. On February 21, 1988, the State Council approved in principle Shanghai’s “Report on Deepening Reforms, Further Opening Up, and Accelerating the Transition of Shanghai’s Economy to an Externally Oriented One.” It agreed that beginning in 1988 Shanghai would begin to implement a fiscal system of “contracting a base figure for a five-year period.” Under this fiscal management system, the base figure for the revenue Shanghai had to turn over to the central government was RMB 10.5 billion. 3. A hepatitis A epidemic broke out in Shanghai in January 1988 and spread explosively. It originated with the consumption of infected clams by part of the population. The epidemic was brought under control by mid-March, and a total of 292,000 people were affected. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 33 12/26/17 12:00 PM 34 Unite and Strive Together to Do Good Economic Work was not an easy victory. Jiang Zemin spent a lot of time and energy on this problem. When he was at meetings in Beijing, he telephoned Xie Lijuan4 daily with instructions. Xie Lijuan and those in the departments concerned also did a great deal of work in a very careful and responsible way. Although many lessons can be learned from this hepatitis epidemic, the people of Shanghai handled it well and in so doing showed excellent organizational and management skills. They clearly have the ability to cope with sudden unexpected events and to stay calm in a crisis. The other problem is the price of goods, as Huang Ju5 already indicated in his presentation just now. I believe that the Municipal Party Committee and government have the determination and will make every possible effort to achieve basic price stability this year. Before the end of March, all plans will have been introduced for price adjustments for goods requiring such attention. This will help improve the big picture in Shanghai, as it will turn enterprises around that are experiencing losses. At the same time, units that arbitrarily and opportunistically raise prices without approval from the Municipal Price Bureau and that violate the limits of price controls must be rigorously investigated by that bureau, as well as the Economic Commission, the Office of Finance and Trade, and the Bureau of Industry and Commerce. In April we plan to convert the fixed per capita subsidy for non-staple foods from a hidden subsidy to an open one. Calculations for this must be detailed, the methods thorough, and all preparations complete. After Jiang Zemin returns to China on April 2, he will be in charge of the final decision. I hope this measure will have a very positive effect...


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