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489 86 In the “Two Increases and Two Decreases” Campaign, Take Substantive Action, Dare to Manage, and Take Genuine Action1 May 24, 1990 At present, industrial production in Shanghai is encountering quite a few temporary difficulties. The negative growth that began last October lasted all the way up to this March, and growth only began to resume in April and May. I’m afraid that for the period from January to May, we will hardly be able to match the level of the same period last year. The new problem we have now isn’t a local one, it’s a nationwide problem. It’s fair to say that we have the conditions for overcoming the difficulties confronting us. Politically, the cohesiveness of the people of Shanghai is stronger than before—there is less grumbling and swearing, and they have greater confidence in the Party and government. In terms of economics, people’s minds and the price of goods are both steady now—although the increase in production isn’t great, we’ve still kept it steady. Also, conditions for production are much better than they were then. We have already stockpiled over a month’s supply of coal, and there hasn’t been a month when we had to restrict power supplies. The supply of raw materials is also much better than it used to be. The issue now is that we must act. Today, as we meet to launch the “Two Increases and Two Decreases” campaign,2 I’ll just discuss three ideas in six words: (1) substantive action, (2) dare to manage, and (3) genuine action. It all comes down to the word “act.” Take Substantive Action The current economic situation requires substantive action. We’ve encountered a new problem known as market weakness and a shortage of capital. Without markets, many things can’t be produced or are stockpiled in warehouses, 1. This is the main part of Zhu Rongji’s speech at the meeting to launch the “Two Increases and Two Decreases” campaign in support of Shanghai’s industrial sector. 2. The two increases and two decreases were increasing production and decreasing waste, and increasing revenues and decreasing expenditures. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 489 12/26/17 12:01 PM 490 Take Substantive Action, Dare to Manage, and Take Genuine Action with the result that capital can’t circulate, production can’t ramp up, and some labor can’t create value. We’re now launching the “Two Increases and Two Decreases” campaign for the purpose of opening up markets and speeding up capital circulation. Therefore we’re absolutely not asking you to go back and increase production of goods that won’t sell. Otherwise, that would be awful— that isn’t acting substantively, that’s just starting a temporary burst of activity. We must all understand that although production grew again in March and April, the price we paid was quite high, because the capital required for finished goods was 30% greater than for the same period last year and 15% higher than for the beginning of this year. This shows that things aren’t selling , that the money from banks or from enterprises themselves is locked down in warehouses and not bringing any benefits—things will get worse if we go on like this. Moreover, more enterprises are losing money—losses have increased by over RMB 200 million. Most serious of all, goods sold outside of Shanghai have declined by 21%—Shanghai products aren’t selling, and this is a fairly serious problem. We now have a fiscal deficit of RMB 800 million. If this keeps up, our plans for this year will have to be scrapped, and wouldn’t “developing Pudong” then become an empty phrase? That’s why here at this meeting to launch the “two increases and two decreases,” I’m calling on you to go back and work with real gusto, not fake gusto. It would be a mistake for you to go back and produce those old familiar products at full speed—that’s not acting substantively. So what should you focus on? You should focus on quality, on product variety , and on performance. First and foremost you must focus on quality—without quality, you have nothing. During this “Two Increases and Two Decreases” campaign, under no circumstances should enterprises blindly pursue speed without considering quality. Why is it that Shanghai products currently aren’t selling? Because their quality has gone down. When the city’s Bureau...


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