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366 66 Explain Difficulties Clearly and Energize Ourselves1 September 18, 1989 The current economic situation has been quite grim since the national industrial growth rate started to decline in August. From January to August, it was 10%, but in August it fell to only 6.1%, and the drop was very severe at the township and village enterprises (TVEs) in some provinces. In Shanghai, the rate was 7.2% from January to August and 3.2% in August owing to the centrally owned state-owned enterprises (SOEs), which have a high growth rate; TVEs also showed some growth, but locally owned SOEs were already showing negative growth. The overall industrial growth rate for September, including TVEs, might be negative. Fiscal revenues and tax revenues will decline, and I don’t see any end to this yet. Will we bottom out in September? Not necessarily. That’s why this is a very serious problem. This year’s agricultural situation isn’t very good either. The weather keeps making trouble for us: Shanghai has not been directly hit by any typhoons, but it has been struck by a tornado. Vegetables have become very expensive because of the weather, so we need to see that these price increases are turned around as quickly as possible. We also have to manage the farmers’ markets and impose price caps there so that they can’t take this opportunity to raise prices. Since nothing is available through the main channels, we’ll have to bring in some vegetables from outside, although local vegetables should also be brought to market at the same time. That’s why we must take a more negative view of the economic situation, and of TVEs in particular—a batch of them have already halted production. As for SOEs, Santana production halted 10 days ago. With 2,000 or more vehicles unsold, we can’t keep producing them. “Shanghai”-brand cars sell even more poorly, and we have over 1,000 unsold ones. There are unsold refrigerators all over the country and 120,000 unsold color TVs, and few people are buying home appliances and durables. We really must think of ways to deal with this situation. 1. This is the main part of Zhu Rongji’s speech at the 49th mayor’s administrative meeting of Shanghai’s municipal government. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 366 12/26/17 12:01 PM Explain Difficulties Clearly and Energize Ourselves 367 The immediate problem is that nothing is selling. Meanwhile we have to pay for raw materials and energy but aren’t being reimbursed for the processed goods we sell, so capital is in very short supply and doesn’t circulate. We at the Municipal Party Committee and government got together yesterday and asked [Vice Mayor Gu] Chuanxun to carefully draw up some plans and think of measures to address this. Go Out to Sell as Soon as Possible On a recent visit to Inner Mongolia and Shanxi, I saw a few things that are doing relatively well. Provinces and regions that sell energy appear to be doing fairly well, whereas those without energy, like Liaoning, are having difficulties much like ours. Guangdong and Fujian retain somewhat more of their fiscal revenues and forex, so their capital can circulate. Provinces in the interior such as Shaanxi and Shanxi are all doing relatively well. They have energy and we should sell our products to them. Shanghai products still enjoy a good reputation, and under no circumstances should our industry’s own salespeople or our financial and trade departments think “Shanghai is like the emperor who sits high above all others.” That won’t On a study tour of Hohhot, Inner Mongolia Autonomous Region, and presenting an honor banner to the Hohhot Railway Bureau to thank it for supporting Shanghai, September 12, 1989. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 367 12/26/17 12:01 PM 368 Explain Difficulties Clearly and Energize Ourselves do. We must go out, and as I explained to Zhang Guangsheng,2 you should organize the Number One Textile Bureau and the large companies to hurry up and sell their products in Shanxi and Inner Mongolia. After all, they still want Shanghai products. Pei Jingzhi,3 I read your essay and felt your ideas were quite good, along with your proposed measures. You should get this piece published quickly—the eight measures you propose are on the correct path. Things like big sales, big auctions , “big loss-makers”—ultimately none of...


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