Deng Backs Market Reforms in China's Thriving Coastal City

By , Staff writer of The Christian Science Monitor

CHINESE leader Deng Xiaoping, making a rare public appearance, visited the thriving coastal city of Shenzhen this week in an apparent effort to rally the country behind a new round of market-oriented reforms.

The surprise appearance, the first by Mr. Deng since last February, is also intended to boost confidence in China's reforms by demonstrating that their main architect is reasonably healthy at the age of 87, Western diplomats say.

"The trip means he's okay, he can travel. He's trying to reassure people," says one Beijing-based Western diplomat. Deng, who retired from his last official post in 1988, still plays a decisive role in shaping major policies.

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By touring Shenzhen, China's most prosperous city and a pioneer in market experiments, Deng seemed to add his personal blessing to recent calls by younger Communist Party leaders for quickening economic reforms.

"The momentum behind more dramatic economic reform is picking up. There's a new push in that direction," says a Western diplomat.

China's leaders halted bold economic experiments in late 1988 amid double-digit inflation and panic buying. After crushing the Tiananmen Square democracy movement in June 1989, party hard-liners attempted to roll back many of Deng's reforms.

Beijing's preoccupation with preventing social unrest is likely to forestall radical reforms like those adopted in Eastern Europe, such as price-decontrol and privatization, say Chinese officials in Beijing. Yet since the collapse of Soviet communism last fall, Deng and his followers have argued successfully that "prudent" reforms are vital to economic growth and public support for Communist Party rule. The main party mouthpiece People's Daily led its front page Wednesday with a glowing endorsement of De ng's "Gold Coast" strategy to open up a wide swath of China's coast to trade, foreign investment, and market forces.

"The 'Gold Coast' has ... proven, with the most vivid and concrete facts, that the policy initiated by Comrade Deng Xiaoping to create special economic zones and step up the opening of coastal regions is brilliant, correct, and successful," the article said.

China's policy of reform and opening is an "unshakable" and "long term national policy," said the article.

Deng launched the coastal policy with the creation of Shenzhen and three other "special economic zones" in 1980. During the 1980s, it was expanded to encompass another 14 coastal cities, the Pearl and Yangtze River deltas, southern Fujian Province, and the island of Hainan.

This week, Deng reportedly called for turning Shenzhen, a vibrant metropolis of 2 million people bordering Hong Kong, into Asia's "fifth dragon," the four others being Taiwan, South Korea, Hong Kong, and Singapore. In recent years, Deng has called for "creating several Hong Kongs" on the Chinese mainland.

One of Shenzhen's most controversial experiments - its booming stock market - has recently won firm endorsement from Beijing, says a Shenzhen official responsible for economic reforms. "The center wants us to vigorously push forth the stock market," the official said.

Beijing has approved regulations proposed by Shenzhen to grant legal protection to stock companies. The regulations mandate majority state ownership in "key projects" only.

Shenzhen officials confirmed Deng's visit, but refused to divulge details or say whether he remains in the city. China's official media has not covered Deng's activities.

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