Forces of change

THE new economic reforms announced by China this week - nudging that economy toward market forces of supply and demand - underscore the rapidity with which profound adjustments are now taking place within the global economy. By and large, the world economic adjustments should be welcomed, as they may point toward a higher standard of living for millions of people.

Westerners should not misinterpret the incentives announced by Premier Zhao Ziyang. China is not adopting Western-style capitalism. China's system, although more entrepreneurial and decentralized than in the past, will still be a socialist economy.

But at the same time, the Chinese economic reforms clearly show that the leading edge of world technological and economic change is having an impact even in what seem to be the most stolid, or ideologically committed, societies.

China is not alone in moving toward significant economic change, although the extent of the new program must be considered bold indeed in the context of that nation's rigid post-World War II government control over the day-to-day lives of most Chinese. In Eastern Europe, for example, Hungary is following the earlier bent of Yugoslavia and seeking greater economic pragmatism and industrial flexibility. In Africa, there is a growing recognition that rigidly controlled state-led economies are not necessarily productive, and that some combination of free-market approaches can boost faltering growth rates.

Nor are the major world powers escaping technological and economic change. In the United States, a service-oriented, electronic, and high-technology society is displacing the older industrial-manufacturing economy. The long-range implications of that transformation are not yet fully known.

One consequence has been the creation of stubborn pockets of unemployment - such as in the upper Midwest and older steel producing regions of the US.

Meantime, Japanese economic planners - facing stiffened industrial competition from the newly industrialized nations of East Asia, such as South Korea, Tawian, and Hong Kong - now realize that they, too, must move their fast-paced economy beyond its current manufacturing primacy to high-technology, computer-oriented gains.

And even in the Soviet Union, where former Soviet leader Yuri Andropov sought - largely unsuccessfully - to reform that nation's ponderously bureaucratic economy, there is a recognition among many officials of the importance of modernization and the need for continuing outside trade. A Soviet trade delegation, for example, is scheduled to arrive in the US next week to lobby for an easing of American trade restrictions. Even if the Soviets cancel the trip in the wake of the Olympic boycott, the need for trade will remain paramount - not just to gain high-tech goods from abroad, but also to help earn hard currency.

Recently, for example, Soviet newspapers have been noting major production problems in Soviet oil fields. Soviet oil output is now running slightly behind last year's output. Some Western observers believe the downslide may even indicate the peaking of Soviet oil production that was predicted several years ago by US Central Intelligence Agency analysts.

At the least, any problems in oil output would impose new strains on the Soviet economy, since the Russians clearly need to maintain current oil sales abroad. Oil exports to the West earned the Soviets $17 billion last year. If Moscow maintains overseas sales despite some drop-off in production, it could spell internal economic difficulties - perhaps even a slowdown in industrial growth. Can the Soviet leadership class - which has won a degree of affluence within that highly structured society not equally shared by society at large - totally ignore rising public complaints from a citizenry caught between the conflicting demands of powerful military and civilian sectors?

Can the Soviet Union, in other words, escape the need to yet make the deep-seated structural changes sought by Yuri Andropov - the type of structural changes now announced in neighboring China?

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