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177 21 Tax Streaming Will Promote Guangdong’s Development1 September 16, 1993 Having been entrusted to do so by Jiang Zemin and Li Peng, this time I’ve come to Guangdong with Li Tieying2 and over 60 comrades from the relevant departments of the State Council to convey, introduce, and explain the overall plan of the Party Central Committee and State Council for seizing the moment and speeding up reforms of the fiscal and tax systems. You didn’t fully understand the adjustments to this plan originally, mainly because the changes to it have been extensive, and there wasn’t timely communication between us, so you’ve been very worried. By “crossing swords three times,” or rather, through three exchanges, followed by exchanges of opinions at all levels after the meetings, I’ve also had contacts with comrades from all sectors in Guangdong, and I trust that you have already received explanations to most of your questions. But does this mean you have no more worries? I don’t dare guarantee anything, and I’m afraid you’re still rather uneasy. I’m afraid this will still take some time—we’ll need to have further exchanges and become clearer about the issues. Through exchanges, we’ve also deepened our understanding of this plan. We’ve devoted quite a lot of effort to this trip to Hainan and Guangdong, particularly to Guangdong. We’ve come to understand where your worries lie, 1. From September 9 to 16, 1993, Zhu Rongji conducted studies on the tax-streaming system in Hainan and Guangdong provinces. This is the main part of a speech Zhu gave at a discussion with leading members of the provincial Party committee and provincial government while he was in Guangdong. On the basis of the spirit of the 14th National Party Congress, the Party Central Committee had decided to engage in a series of reforms in 1994 that were aimed at establishing a socialist market economy. Of these, reforms of the fiscal and tax systems were the most important, and also the ones that met with the greatest resistance. Under the previous “package deal” system, Guangdong retained a relatively large proportion of local revenues, and it therefore had great reservations about implementing tax streaming. In his speech, Zhu proceeded from the big picture, insisting on the principles of the reforms even as he used flexible methods, such as making appropriate concessions on practical questions raised by Guangdong such as the base year for adjusting local revenues. In doing so, he resolved the contradictions and created conditions for the smooth implementation of tax-streaming reforms throughout the country. 2. See chapter 17, note 2. 178 Tax Streaming Will Promote Guangdong’s Development where the difficulties lie. We now have personal experiences and perceptual understanding and will be able to add supplements or make amendments to the revisions of the concrete details of the plan. Of course major revisions of principle must still be decided on by the Party Central Committee, but we can make decisions on our own for revisions of concrete details. That’s why this visit to Guangdong has been very helpful to us, and it has also been very helpful for [considering] how to promote this reform throughout the country. Once Guangdong’s problems are solved, the problems around the country will also be solved. That’s why our visit is extremely meaningful. Just now Xie Fei3 and Zhu Senlin4 made very good speeches. They embodied Guangdong’s spirit and stance on keeping the big picture in mind and upholding the interests of the nation. I believe that under the leadership of the Guangdong provincial Party committee and the provincial government, the fiscal and tax reform plans will be gradually and successfully realized. At the same time, I should tell all of you that during our several talks, Xie Fei and Zhu Senlin spoke up strongly for Guangdong’s interests. They were very firm in their position—I could say that they “wouldn’t give an inch” and “fought for every inch of advantage .” They made the greatest effort possible: they bargained hard and made strong arguments. But I also totally believe that in so doing, they not only had [the goal of] revitalizing Guangdong in mind, but also the economic development of the entire country. Therefore I think it was very good that we could “cross swords” several times like this, that this will be advantageous for promoting fiscal and tax reforms. Now I’d like...


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