Chinese leaders grease the wheels for new economic reforms. Changes deemed `imaginative' by visiting World Bank official

The next phase of China's economic reforms will include experiments with the management of state enterprises and the agricultural sector. Chinese leaders revealed several ideas for speeding up China's slow-moving reform program in meetings last week with Moeen Qureshi, a senior vice-president of the World Bank.

These discussions hint at proposals to be presented to the Communist Party's 13th congress scheduled to convene on Oct. 25.

According to Mr. Qureshi, Chinese Premier Zhao Ziyang said that in the second phase of the economic reforms, there would be a high priority on improving the management and productivity of industry. The state's ownership of industries will be further separated from management, the premier told the World Bank delegation.

Premier Zhao said that, on an experimental basis, some managers would be competitively selected from a pool of entrepreneurs and would be given contracts to run state enterprises. They would share profits if they perform well.

Contract management has been a common practice for several years among some enterprises collectively owned by villages, towns, and cooperatives. But it has not been used for managing large and medium-sized state enterprises, which have been tightly controlled by corporations accountable to central government ministries.

The experiments in agriculture will include consolidation of fields among farmers to improve efficiency. Pilot projects in more than a dozen provinces will permit rural residents who are allotted land for cultivation but are primarily engaged in rural industry to sublease their land to other farmers.

A Chinese source said the subleasing would be on a voluntary basis, and there would be no return to the forced collectivization of the 1950s.

Currently, land is divided on a per capita basis, and experts say the system reduces the size of individual holdings well below the level of economic efficiency. The subleasing scheme could increase farmers' holdings from an average of one-third of a hectare to two hectares [five acres] or more, a World Bank official said.

Experts say increased efficiency now is possible because of a massive shift of surplus rural labor from agriculture to rural industries since 1980. So far, some 80 million people out of a rural work force of 350 million have shifted to rural industries.

The state would like to see another 100 million workers take up rural industrial employment over the next few years, according Du Runsheng, director of China's Rural Development and Research Center.

Mr. Du said last week that the percentage of the population working in agriculture must be reduced from the 1980 figure of 80 percent to 40 percent if agriculture is to be mechanized for greater productivity, according to the China Daily.

Another experiment in agriculture will be to release some farmers in coastal areas from obligations to grow grain and encourage them to grow specialty cash crops. China could then export the high value crops and import more grain from countries which produce grain more economically.

``That's what you would expect of a country with much labor and not so much land - that it would move into high-value specialty crops,'' said a Western agricultural expert. But the expert said it requires considerable research and development to find products suitable for the international market.

Chinese agriculture officials sometimes complain about New Zealand's success in developing a world market for kiwi fruit. They point out that this fruit, known in south China as the Chinese gooseberry, is native to China and easily cultivated here. Experts say, however, it took New Zealand several years of research and marketing efforts to popularize the fruit now widely identified with the South Pacific island country.

In a press conference last week, Qureshi said these policy innovations were ``imaginative.''

In assessing China's economic performance, he said that its growth rates had been impressive, averaging close to 10 percent annually over the past decade. Now the problem is to make sure that continued growth in agriculture does not slow down as the focus in state policy turns more toward industry.

China is close to its target of doubling national income by 1990, compared with 1980, the bankers said. They said China is within reach of quadrupling its national income by the year 2000, a goal leader Deng Xiaoping has recently reaffirmed.