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291 50 Launch the “Two Increases and Two Decreases” Campaign and Stabilize Shanghai’s Economy1 May 19, 1989 Why are we holding this mobilization rally for the “Two Increases and Two Decreases” campaign at a time like this? Some say that with students demonstrating and holding sit-ins and hunger strikes, how can we keep our minds on this meeting? The Municipal Party Committee and government are holding this meeting because Shanghai’s economy and society are both facing a dire situation and great difficulties. We must explain this clearly to all government staff and residents of this city; we must ask everyone to stay at their production, construction, and work posts; and we must make great efforts and launch the “two increases and two decreases” in order to stabilize Shanghai ’s economy and its situation. Prominent Problems At present, our economic work is faced with a number of serious problems. Production at State-Owned Enterprises (SOEs) Is Very Unsatisfactory. From January to April, overall industrial growth in Shanghai was 10%, but for our main force—our local SOEs—it was only 0.6%. It even fell by 0.4% at the SOEs within the local budget, whereas the plan calls for local SOEs to grow by 2% this year. Almost five months have gone by, but the trend is still downward. Although the growth rate for the entire city doesn’t seem too bad, returns are very unsatisfactory. While fiscal revenues at districts and counties have increased, they are decreasing at the municipal level. Foreign Trade Is Slipping. From January to April, Shanghai’s export forex earnings fell 9.5% from the same period last year. Textile exports in particular fell 1. Zhu Rongji gave this speech at the mobilization rally for the “Two Increases and Two Decreases” campaign. The “two increases and two decreases” referred to increasing production and decreasing waste, and increasing revenues and decreasing expenditures. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 291 12/26/17 12:00 PM 292 Launch the “Two Increases and Two Decreases” Campaign by 24.5%, and their situation is very precarious. Because of a severe shortage of domestically allocated raw materials, these couldn’t be obtained even at high prices, so we could only import more raw materials. The door for imports has now opened wide, causing us to spend more forex, but there is a great decrease in export forex earnings—how can this be? Agricultural Production Has Been Affected by the Weather. This year’s weather, with its heavy rainfall, is forcing us to be on the alert. A storm such as the one on April 28, which seriously affected the summer harvest, has not occurred in 115 years. Despite many remedial measures by the leading cadres and the farmers in the outlying areas, the outcome is still hard to predict. At the floodprevention mobilization meeting, I stressed that we must be prepared to “fight major natural disasters and prevent major floods.” Workplace Attendance by Employees Is Low. In recent days, serious traffic jams on public transit affected commuting. In addition, morale has been poor and work attendance in quite a few sectors has been at roughly the same level as it was during last year’s hepatitis A epidemic, or even worse. Rumors about Prices Have Become a Dangerous Trend. One rumor that’s been going around is, “Grain prices are going up, and prices for other goods will follow .” I am authoritatively stating here that grain prices will not rise, the prices of the 19 types of goods we have reported on to the Standing Committee of the Municipal People’s Congress will not rise, and losses incurred by enterprises will be subsidized by local finances. We must therefore do good ideological work with cadres and the people so that they won’t believe such rumors. If they were to believe the rumors and engage in panic buying, the market would be enveloped in chaos, savings would decrease, and production wouldn’t be able to continue. This year, the state is tightening the money supply and there is a shortage of working capital. The foreign trade departments owe money to the enterprises and the enterprises owe money to each other, making it hard for many of them to keep producing. How are we to deal with this? By counting on the “patriotic savings” of all the people of the city. Keeping money in the banks is supporting Shanghai’s economic growth. Right now savings deposits in Shanghai...


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