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278 48 Shanghai’s Industrial Restructuring Must Blaze New Paths1 March 14, 1989 This is the first part of our conference on industrial restructuring. We’ve met for a day and a half, and many people have yet to speak—they will do so in the second part. Because of time constraints today, I’ll recapitulate this part and make a few comments. The Urgency of Industrial Restructuring For the past several decades, our industrial structure did not develop in a planned and proportionate way. The growth rate seemed very high, but because the industrial structure wasn’t logical, it didn’t deliver the benefits it should have—this is the main reason for our current difficulties. Shanghai’s previous economic model relied mainly on a planned economy and on allocations by the state. The situation today is different: everyone is developing for themselves, and the original foundations for growth have been greatly weakened. If Shanghai still doesn’t speed up its industrial restructuring to keep up with the current environment, the situation will no longer just be “quite challenging.” Wang Daohan calls it “quite tense,” but I would put it even more strongly and call it “quite serious.” To facilitate this industrial restructuring, the city government’s research office first compiled very good background materials through interviews with many retired veterans of the Municipal People’s Congress and the Political Consultative Conference, including the members of the Advisory Group on Urban Administration.2 Those at the People’s Congress and the Political Con1 . This is the main part of a speech by Zhu Rongji at the 32nd mayor’s administrative meeting of the Shanghai municipal government, during which questions of industrial restructuring were examined. 2. From August 1988 until February 1992, the Shanghai municipal government engaged almost 20 retired veterans, including Wang Daohan, Li Chuwen, Pei Xianbai, and others, to form the Advisory Group on Urban Administration. Members of this group offered policy advice to the city government on the key areas of its work and on some major issues in Shanghai’s socioeconomic development. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 278 12/26/17 12:00 PM Shanghai’s Industrial Restructuring Must Blaze New Paths 279 sultative Conference unanimously agreed that the decisions of the Municipal Party Committee and municipal government on industrial restructuring were extremely timely and extremely necessary. The current supply of raw materials is so tight that without restructuring, we will have no way out—this is being forced up Mt. Liang.3 The sooner we restructure, the sooner we will have the initiative; if we restructure later, we will lose the initiative; and if we don’t restructure, we won’t survive. I can sum this up in two phrases: “being forced up Mt. Liang,” and “blazing a new path.” We can’t survive unless we blaze a new path. Of course in restructuring industries the issue is how to take into account both the long term and the short term. In a talk with me yesterday, Jiang Zemin asked me to also focus on long-term industrial restructuring—this is a particularly sound suggestion. We are only able to think about this year and the next at this point, but when it comes to truly changing Shanghai’s industrial structure—by developing industries that produce raw materials, for example— it can’t be done in just one or two years. The process will take three to five years or even longer, so we must continue to study this matter. At present, we are mostly studying this matter, putting out fires, and not thinking much about the long term. For the near term, we mainly want this year’s targets to be specific and the measures to be workable. If we start a project, it must yield results; otherwise we’ll have a hard time. That’s why the near-term goal should be to make conserving energy and raw materials our breakthrough point. Since we can’t overcome the problems with energy and raw materials right now, we have no choice but to conserve. However, this won’t work if we don’t close, halt, merge, or transfer some enterprises and just let everyone keep on consuming these materials . We therefore have to stress the key points, especially energy conservation. I recognize the many difficulties energy conservation poses, but we still have to put that slogan out there, still have to propose targets, and should emphasize that conservation applies to both energy and...


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