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83 11 Raising Labor Productivity Is the Key to Turning Around Losses and Improving Efficiency in the Coal Sector1 May 20–29, 1992 The growth of the coal industry in Shanxi is critical to moving the national economy to a new level. Through this study tour, I’ve gained a profound sense of the very important place Shanxi coal occupies in the growth of the national economy. Shanxi produces 290 million tons of coal annually, of which 179 million tons is shipped out via railway and 27 million tons via highways. These 200 million or more tons account for about 80% of the commodity coal shipped to the entire country and are of utmost importance nationally. Now, as we are all putting into practice the spirit of Deng Xiaoping’s important talks and preparing to move up to a new level, we are already aware of shortages in all areas. First, there are shortages in transportation, but these will very soon show up as shortages of coal—we absolutely mustn’t overlook this point. We’ve all experienced periods of difficulty in the past. One year, we had a planning conference at the Jingxi Guest House in Beijing, which was in fact a conference on profiteering in coal. Everything depends on coal. It determines the rate of industrial growth and the rate of national economic growth. If we don’t pay attention to the issue of coal, we’ll again be faced with a national economy in stagnation. Right now, the country’s biggest money-losing industry is coal, and oil is second. Half the subsidies for losses in the country are taken up by these two. Although oil is losing money, it still manages to get by with subsidies. Coal also gets subsidies for its losses, but it isn’t doing very well and has quite a lot of problems . That’s why I say that if we want to turn our losses around and make our economy move up a level, we must do a good job with the coal and oil industries. At present the railroads are not at all able to meet our growth needs. Our plans call for 190,000 [rail] carloads of coal a day, but our railways can only accommodate 75,000 carloads.At this rate, how can the national economy grow? 1. From May 20 to 29, 1992, Zhu Rongji inspected work in Shanxi Province. He visited the centrally planned mines at Datong, Taiyuan, Yangquan, and other places. These are the key points he made during the inspection visit about developing the coal industry. 84 Raising Labor Productivity Is the Key to Turning Around Losses and Improving Efficiency It basically can’t! Therefore once I go back I’ll ask the Ministry of Railways to study this problem and draw up emergency measures as soon as possible. They must think of every means possible to improve transportation capacity, especially in Shanxi. Shanxi is the most important center of coal production in China, and its rail transport is a strategic artery. If the artery is clogged, it will have a huge impact on the national economy. Of every 100 tons of coal shipped to other provinces, autonomous regions, and municipalities, 80 tons come from Shanxi. Anyone who ignores rail transport in Shanxi doesn’t understand China’s economy. If there’s a choke point for further economic growth, it will be here, and in fact it’s already choking up here. That’s why I say that the question of how to ship Shanxi coal out, how to unclog the strategic artery of the railroad, is a strategic issue for national economic growth. We have to study this issue well and take it very seriously. Here, I have an expectation for Shanxi. Shanxi has China’s most important coal resources and coal-mining centers, and you’ve already made great contributions in the past. In the future, you should continue to attach importance to the development of coal mining. These past few years, coal production in Shanxi has relied mainly on local coal mining. In 1978 Shanxi produced less than 100 million tons of coal, but this has now grown to 290 million tons. Of the close to 200 million tons added, only 50 million came from centrally planned mines. Therefore Shanxi should still continue to make great efforts to develop local coal mining. This is not a money-losing industry—because the price of coal is rationalized, the day will soon come...


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