China's new economic plan to carry forward Deng's reforms. Five-year blueprint calls for easing of recent high growth rates

The curtain has lifted a little on China's economic policies for the next five years, revealing a blueprint for development that carries forward to 1990 the basic programs of master-strategist Deng Xiaoping. The major points of the five-year plan for 1986-1990 indicate a broad consensus among Chinese leaders about the single most important political issue facing them: how to proceed with China's massive economic-reform program.

The proposals unveiled here feature a restrained annual growth rate of 7 percent and the continued shift from direct to indirect controls of the economy by state management. In general, targeted production levels for 1990 will be twice those of 1980 (aiming at a quadrupling by the year 2000).

Chinese economic planners hope to increase foreign trade by 40 to 50 percent, to continue the ``open door'' policy for foreign investment, and to expand the use of foreign technology.

``These proposals are for persistence in conducting the reforms,'' said Yuan Mu, a top economist in the Chinese Cabinet. Mr. Yuan drafted the proposals presented last week for discussion to a national party conference. The final and detailed draft of the 1986-1990 plan will be presented next spring to the National People's Congress for approval. The guiding principles of the forthcoming plan, however, suggest something of a compromise between the ``anything-that-works'' philosophy of some economic advi sers here and the approach of the Soviet-style planners who value the dominance of state controls and favor distribution of wealth over the creating of new wealth.

Several times in his comments to the Peking press corps, Yuan said that China's material progress must bring ``common prosperity,'' a hint that disparities in income between the handful of people who have benefited hugely from the reforms and the majority who have benefited slightly were causing social problems.

Deng's some-must-get-rich-first policy, announced several years ago, reversed three decades of a forced equalitarian ethic and has become a sore point with some party officials who say it contradicts socialism and is creating new class divisions.

``There is no contradiction between common prosperity and letting some people get rich first,'' said Zhang Songjia, deputy editor in chief of the Economic Daily, the party's official voice on economic affairs. ``The idea is for some people to be an example to others and eventually for all to get rich together.'' But Mr. Zhang added that common prosperity cannot depend on rich people voluntarily helping others. China's tax system must help level the differences, he said.

Maintaining the socialist character of the Chinese economy is also an agreed objective of the five-year plan. This requires preserving the dominance of the state production-and-distribution system -- a task that may be difficult if the economy's private sector continues to improve in efficiency and productivity, as it has so dramatically in the past few years compared with the state sector.

Another major challenge will be controlling the economic growth rate over the next five years -- leveling off the astonishing growth rate of recent years. (The first half of this year saw a 23 percent rate.)

Zhang pointed out that the 7 percent rate now being targeted was an ideal one that took into account the need for balanced development. It was not just a target rate to be exceeded if possible -- although some provinces and state enterprises that favor much more rapid growth would have to be convinced of this. ``That's why we have presented these proposals to the national party conference. We have to convince some people about the plan,'' he said.

One Western diplomat commented that the preview of the next five-year plan showed a ``conservative nuance,'' but pointed out that the reformers haven't changed their overall focus and objectives.

``The fact that the five-year plan is on track after all the problems of the past year shows that the reformers are still politically firm in the saddle,'' he said.

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