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496 87 A Speech to Cadres from the Shanghai Planning Commission June 1, 1990 I’m in the same line of work as all of you—my work was originally in planning , so we share the same background, and the work of the Municipal Planning Commission is of special interest to me. Following are some thoughts on the commission’s role. 1. The Commission’s Important Role in Economic Development You should all fully recognize the very important role of the Planning Commission in Shanghai’s socioeconomic development, and thus of the important responsibilities on your shoulders. One might say the commission is the general staff office of our city government and manages the economy of the entire city; that, of course, also includes its social and cultural development. I worked at the State Planning Commission for over 20 years and at the State Economic Commission for almost 10 years and have always felt that the work of the Planning Commission was the most important. A very large part of the responsibility for how well China’s economy performs lies with that commission. Since coming to Shanghai in 1988, I’ve continued to think that the Planning Commission should be an agency that comes up with guiding principles, plans, and policies. Of course you can’t expect everything to come from the Planning Commission—you have to rely on the various departments. Guiding principles should first be proposed by them, and then given overall balance by the commission . At the moment, the Municipal Planning Commission isn’t entirely playing such a role; not all its relations with all the bureau-level departments have been rationalized, many things are done awkwardly, there are delays at every level, powers that should be devolved haven’t been devolved, and powers that should be centralized haven’t been centralized. I am here today to again make it clear the Municipal Planning Commission is the city government’s general staff office that manages the entire city’s economy. How should it do this? The commission should examine this question in detail. Zhu_Shanghai Years_1987-1991_hc_9780815731399_i-xii_1-620.indd 496 12/26/17 12:01 PM A Speech to Cadres from the Shanghai Planning Commission 497 2. The Role of the Commission under the Current Economic Model The Party’s 13th Central Committee defined its basic line as “one center and two basic points.” This refers to our current economic model: a planned commodity economy in which “the state adjusts the markets and the markets guide enterprises.” In the aftermath of last year’s political turmoil, Deng Xiaoping delivered an important speech emphasizing that this basic line established by the 13th Central Committee should not be changed. The standard phrasing now is “a combination of a planned economy with market adjustments.” Exactly what does this mean? We still need to explore this question, and I hope you’ll all think about it. I myself am preparing to study it in the context of the situation in Shanghai. The defining feature of socialism with Chinese characteristics is the idea that public ownership should remain the system’s dominant principle. Although we insist on the dominance of public ownership in order to achieve our goal of common prosperity, this does not preclude shareholding. There must be a unified plan if public ownership is to remain dominant, but at the same time we must let the markets fully play their role. For several decades, we made many mistakes by relying solely on subjective plans to determine prices and to determine which projects to undertake or forgo. Administrative measures are necessary, but administrative decisions must be based on the markets. Every enterprise must not only answer to its leaders, but even more it must answer to the markets for its performance. This point is relevant to the thinking that will guide the Planning Commission in the future, especially in determining how we should invigorate the markets. In other words, each enterprise must become an organic entity with its own particular interests if it is to answer to the markets and not just to its leaders. The previous excessive blind faith in unleashing enterprises, where everything was devolved to enterprises, not just to factories but even to shops—this method won’t work. We must remember that on one hand, if supervision is imperfect under a system of public ownership, anyone can take a piece. On the other hand, if all powers are devolved to a factory director, he is entirely able...


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