{headline} Deng weeds out Gang of Four allies {byline} By WILLY WO-LAP LAM {article} MORE regional and young officials will be inducted into leadership positions at the 14th Communist Party congress. {para} Moreover, patriarch Mr Deng Xiaoping and his proteges have weeded out cadres suspected of still professing allegiance to the Gang- of-Four leftists. {para} Chinese sources said the ninth plenum of the Central Committee, which closed in Beijing yesterday, had decided on the make-up of the new politburo. {para} It would officially be voted into office at the 14th congress. {para} Leaders from the regions would have an unprecedentedly large representation on the 21-member politburo. {para} Three local-level party bosses, from Beijing, Shanghai and Guangdong, would be inducted into the supreme body. {para} They were Beijing mayor Mr Chen Xitong, tipped to succeed Maoist Mr Li Ximing as Beijing party secretary; Shanghai party boss Mr Wu Bangguo and his Guangdong counterpart, Mr Xie Fei. {para} The sources added there would be at least two more ``regional seats'' on the politburo. {para} Contenders included the party secretaries of Tianjin, Shandong and Heilongjiang, respectively Mr Tan Shaowen, Mr Jiang Chunyun and Mr Sun Weiben. {para} In addition, whoever succeeded Sichuan party boss Mr Yang Rudai, who is retiring from the politburo, also had a high chance in view of the province being the most populous in the country. {para} Mr Jiang and Mr Sun have long-established reputations of being liberals. {para} Shandong province, in particular, was cited by the national media as having taken remarkable strides in both industry and agriculture. {para} Sources close to the congress said that in line with Mr Deng's new requirement on rejuvenation, both central- and regional-level organisation departments had reserved ``quotas'' of senior posts for promising cadres in their 40s and 50s. {para} A disproportionately large number of these rising stars, however, were the offspring of party elders. {para} According to a report in yesterday's Wen Wei Po, a pro-Beijing Hongkong newspaper, the party had taken special precautions against the elevation of the so-called Three Types of People. {para} The term refers to officials or party members who were active during the Cultural Revolution of 1966-76 or who were underlings of the Gang of Four radicals. {para} The newspaper said that about 10 per cent of the candidates originally shortlisted for the new Central Committee belonged to the Three Types of People. {para} However, these cadres, including those in their 40s and 50s, have since been dumped. {para} Informed sources said the vice-chief of propaganda, Mr Xu Weicheng, who was a protege of Gang of Four leader Jiang Qing, would probably be barred from further promotions. {para} Meanwhile, the ninth plenum decided yesterday to adopt changes in the party charter. {para} While the new charter would only be publicised at the end of the 14th congress, Chinese sources said it included the abolition of the arch-conservative Central Advisory Commission (CAC). {para} The New China News Agency reported yesterday that the CAC held its ninth plenary session in Beijing yesterday, and that its 169 members approved a work report which would be presented to the congress. {para} Analysts said the report would recommend that, in the interest of letting the new leadership have a free hand, the commission be replaced by a smaller and less powerful advisory committee. {para} NCNA reported that the meeting was chaired by Vice-Chairmen Mr Bo Yibo and Mr Song Renqiong. {/article}

{headline} Appointment signals fight on corruption {byline} By WILLY WO-LAP LAM {article} THE 14th party congress has signalled its determination to curb corruption by promoting the hard-nosed Minister of Supervision, Mr Wei Jianxing, as head of the Communist Party's morality squad. {para} Mr Wei, 62, is expected to be appointed a politburo member as well as head of the Central Commission for Disciplinary Inspection (CCDI) later this week. {para} At the same time, General Yu Yongbo is tipped to be installed as the Army's Chief Political Commissar, or the senior official on disciplinary and ideological matters, in a meeting of the Central Military Commission (CMC) next week. {para} The CCDI investigates breaches of the party's charter, the law and morals made by party members and cadres. {para} The first head of the CCDI was conservative patriarch Mr Chen Yun, who became chairman of the Central Advisory Commission at the 13th party congress in 1987. {para} The incumbent, politburo Standing Committee member Mr Qiao Shi is expected to leave the CCDI position to concentrate on party affairs. {para} Mr Qiao will keep his post as head of the Central Committee's Political and Legal Commission, which is the country's highest authority on legal and judicial affairs. {para} Political analysts in Beijing said Mr Wei was promoted because, as Minister of Supervision since 1987, he had successfully helped in the prosecution of a large number of graft-taking officials. {para} However, the analysts had doubts about Mr Wei's suitability for the high party post. {para} While his political views are largely unknown, Mr Wei, a former vice-chief of organisation, is believed to be a protege of conservative- leaning party elders. {para} The ministry has largely failed to crack corruption cases perpetrated by powerful cadres, including the offspring of senior leaders. {para} Moreover, veteran legal scholars in Beijing expressed reservations about the appointment of a government minister to the party position, saying it contravened the principle of the separation of party and government laid down at the 13th congress. {para} ``The CCDI can only discipline a party member through, for example, kicking him out of the party,'' a constitutional lawyer said. ``The Supervision Ministry can recommend criminal proceedings against a suspect. {para} ``Recently, there have been many cases of corrupt cadres being exempted from criminal prosecutions after party authorities have vouched for their `political loyalty'. {para} ``In these instances, the graft-taking cadres were just given `severe warnings' by the CCDI.'' {para} In his Political Report to the congress yesterday, General Secretary Mr Jiang Zemin indicated corrupt cadres would be ``punished in accordance with the rules of party discipline and the laws of the state''. {para} ``The fight against corruption is crucial to the maintenance of close ties between the party and the people,'' Mr Jiang said. ``We should all recognise that this is an urgent, long-term and arduous struggle.'' {para} Mr Jiang was particularly concerned about the errant behaviour of the offspring of senior cadres, saying the latter must ``set a good example and teach their family members'' about clean living. {para} The party boss, however, made no reference to the ideal of the independence of the judiciary, or at least the possibility that cadres suspected of corruption be investigated by independent legal officers. {para} Meanwhile, Chinese sources said Lieutenant-General Yu Yongbo will likely take over from General Yang Baibing as Chief Political Commissar at the next CMC meeting. {para} General Yu, 61, will also be made a member of the CMC, which is the military's highest council. {para} A former director of the political department of the Nanjing military region, General Yu was promoted to be one of General Yang's three deputies in December 1989. {para} Believed to be a protege of General Yang, General Yu is expected to continue with the policy of ``providing an escort'' for economic reform while being tough on infractions over ideological and legal matters. {para} Military analysts said that since General Yang was likely to be promoted as a vice-chairman of the CMC, his giving up the commissar post did not mean his power had been cut. {/article}

{headline} Veterans fail to show up for opening speech {byline} From GEOFFREY CROTHALL in Beijing {article} By the time the final bell sounded for participants at the 14th party congress to take their seats, it was clear many of the specially invited delegates would not be taking up their invitations. {para} Ten minutes before the Prime Minister, Mr Li Peng, formally declared the congress open, the giant electronic scoreboards flanking the conference podium revealed that only 35 of the 46 special invitees had made it to the Great Hall of the People. {para} This compared unfavourably with the official delegates on the conference floor who managed to score 1,965 from 1,989. {para} However, given the fact that one of the qualifications for a special invitation to the congress is to have been a Communist Party member for more than 65 years, it is perhaps not so surprising that some did not turn up. {para} Two of the most eagerly awaited invitees, Mr Deng Xiaoping, 88, and former chairman of the National People's Congress, Mr Peng Zhen, 90, never showed; neither did the ailing Vice-President, Mr Wang Zhen, 84. {para} A medical team, replete with state-of-the-art cardiovascular equipment, was on standby outside the main conference hall just in case any of the delegates needed urgent attention but, for the first morning of the congress at least, their services were not required. {para} However, the delegates were given a swift reminder of their own mortality when Mr Li asked for a moment's silence to honour the memory of the party's founding fathers as well as more recently departed comrades such as former president Li Xiannian and former prime minister Zhou Enlai's widow, Deng Yingchao. {para} Following the party's moment of remembrance, General Secretary Mr Jiang Zemin strode across the podium's deep pile crimson carpet to the wooden lectern to deliver his ``important speech''. {para} For the most part the delegates gave the General Secretary a polite if not overly enthusiastic reception to what was a largely unremarkable address. {para} The only sustained applause came when Mr Jiang, his voice rising to a high-pitched falsetto, denounced latter-day imperialist aggression (without mentioning the United States by name) and pledged that all corrupt party officials would be severely punished. {para} Mr Jiang's colleagues on the podium displayed varying degrees of interest in his speech. While Mr Li studiously read every word, his deputy, Mr Zhu Rongji, spent most of the morning with his arms folded, staring into space. {para} The podium also exhibited a diverse but highly telling dress sense among the delegates. {para} The three most notable ``retirees'' at this congress, Mr Song Ping, Mr Yao Yilin, and Mr Wan Li, were all wearing traditional Mao jackets while those expected to gain a promotion - such as Mr Zhu - were resplendent in well cut Western suits. {para} Mr Li Peng was dressed in something which could only be described as an ill- fitting combination of both styles. {/article}

{headline} Courts pledge to end corruption {byline} From GEOFFREY CROTHALL in Beijing {article} AMID a significant upsurge in bribery and corruption, China's top judge has ordered the country's judiciary to ``resolutely crack down on serious economic crime''. {para} The president of China's Supreme Court, Mr Ren Jianxin, said judicial authorities should show no mercy in smashing economic crime, which has been increasing at an alarming rate over the last year. {para} More than 48,000 cases of graft and bribery, involving nearly 243 million yuan (HK$347.49 million), were uncovered in the first seven months of this year alone, said the New China News Agency (NCNA). {para} While most offences were relatively minor, there were 7,600 serious cases all involving more than 10,000 yuan, up 13.3 per cent over the same period last year, the NCNA said. {para} During roughly the same period last year, incidents of bribery and graft totalled fewer than 16,000 and involved about 116 million yuan. {para} ``In dealing with serious economic crime, we should severely punish the perpetrators according to law, not show a soft hand and guard against lethargic tendencies in our work,'' Mr Ren was quoted by yesterday's Legal Daily as saying. {para} But Mr Ren stressed the crackdown must not hurt economic reform. {para} The judiciary must give its full backing to economic reform and protect reformist managers and technicians ``even if they make mistakes'', Mr Ren said. {para} A clear distinction must be made between what could and what could not be considered criminal behaviour in economic cases, the top judge pointed out. {para} ``We must adopt a policy of resoluteness on the one hand and prudence on the other and always keep to the same standards,'' he said. {para} Mr Ren appeared to be giving ambitious entrepreneurs the benefit of the doubt in economic matters in a bid to ensure the reform programme would not be bogged down in the courts by conservative local officials. {para} ``We must overcome regional protectionism and local vested interests,'' he said. {para} But analysts noted Mr Ren's remarks indicated a degree of uncertainty over what actually constitutes economic crime. {para} ``There is no doubt that China's legal system is lagging behind the economic reforms that have now been set in motion,'' a Western lawyer based in Beijing said. ``The courts do not have the experience or the statutes to deal with many of the cases they are being asked to adjudicate on,'' he said. {para} ``The development of stock markets in particular has proved a minefield for the judiciary. I suspect 99 per cent of judges in China would not have a clue how to deal with a case of, say, insider trading, for example,'' he said. {/article} {headline} Third of staff to lose jobs in streamlining {byline} By KENT CHEN {article} UP to one-third of the 100,000-strong staff of the State Council and its subordinate organs are expected to lose their iron rice bowls under a government plan to streamline organisational structures. {para} A nation-wide campaign will be carried out soon after the conclusion of the 14th Party Congress to lay off redundant staff, according to an official from the Chinese Communist Party's Organisation Department. {para} About 34 million cadres were employed by party and government units above the level of a county, posing a heavy burden for the state, the official told the Hongkong China News Agency. {para} The ultimate goal of the streamlining is to transfer one-third, or even half, of cadres to non-governmental units in the area of production, trade, science and technology. {para} The official quoted an unnamed senior leader as saying that proper arrangements should be made for the placement of all dismissed cadres. {para} ``Redundant personnel should be properly resettled, otherwise there will be social unrest and reform will be difficult to be carried forward,'' the senior leader reportedly said. {para} The senior leader also warned that during the process of transferring redundant personnel to start their own businesses, all links with government departments should be severed. {para} ``Exchanging party or government power for money is absolutely forbidden,'' said the senior leader. {para} The official from the Organisation Department also disclosed that, following the revamp, the salary of the remaining staff would be raised in order to reduce the possibility of corruption. {/article}

{headline} Card for patriarch {article} MORE than 70 delegates at the 14th party congress yesterday sent a card to the chief architect of reform Mr Deng Xiaoping. {para} On the card the officials, who hail from Mr Deng's home province of Sichuan, wrote: ``Comrade Deng Xiaoping, the people of Sichuan miss you. We wish you health and a long life.'' {para} The card, signed by the delegates yesterday, was specially designed to celebrate the 14th congress and bore the party logo with an artist's impression of the Great Hall of the People. {para} According to the China News Service, the delegates felt the occasion was an ideal time to express their feelings towards the senior leader, who has so far failed to show up at the meeting. {/article}

{headline} Congress backs Deng {headline} Reform plans `to be upheld for 100 years' {byline} From JOHN KOHUT in Beijing and WILLY WO-LAP LAM {article} THE 14th congress of the Chinese Communist Party opened in the Great Hall of the People yesterday with a commitment to upholding patriarch Mr Deng Xiaoping's fast-paced reforms for 100 years. {para} And while Mr Deng, who is one of 46 ``special delegates'', did not show up for the session, he has made sure that his children and aides will be elevated in the watershed conclave. {para} His daughter Ms Deng Nan, a Vice-Minister of Science and Technology and an official congress delegate, said yesterday, ``My father is hale and hearty.'' {para} The New Helmsman's name, as well as the newly- minted Deng Xiaoping Theory, was prominent in the 27,000-character political report delivered by party General Secretary Mr Jiang Zemin. {para} Mr Jiang invoked Mr Deng's authority several times in his plea that the party must proceed down the road of a socialist market economy. {para} ``Comrade Deng Xiaoping is the chief architect of our socialist reform, of the open policy and of the modernisation programme,'' the party boss said. {para} Not only was Mr Deng adept at generalising from the experiences of the masses, but he ``can sense the direction in which things are moving and seize upon favourable opportunities'', added Mr Jiang, whose praise of the patriarch received frequent applause. {para} Mr Jiang seconded the statement Mr Deng made during his tour of southern China in January, that the basic party line of taking economic construction as the key link should be ``upheld for 100 years and should never be shaken''. {para} Reflecting Mr Deng's conviction that socialist China can blaze new trails in market reforms, the party chief pronounced: ``A market economy that is erected on the conditions of socialism should - and is totally able to - perform even better than a capitalistic market economy.'' {para} Equally important, Mr Jiang cleaved to the Deng line that while the party must be on guard against rightism, or bourgeois-liberal influence, its priority was to combat leftism, or remnant Maoism. {para} Mr Jiang recalled Mr Deng's tour of southern China, saying the senior leader cleared up ``many important misconceptions that had perplexed and shackled our thinking over the past few years''. {para} ``Comrade Deng Xiaoping particularly pointed out that a planned economy was not socialism - there was planning under capitalism too,'' he said. {para} ``Whether the emphasis was on planning or on market regulation was not the essential distinction between socialism and capitalism,'' he said. {para} This, Mr Jiang said, was a brilliant thesis. {para} ``We should try not only to understand Comrade Deng Xiaoping's strategy, theories and viewpoints but also to emulate his scientific approach in examining new situations and his creativity in solving new problems by applying the Marxist stand, viewpoint and method.'' {para} Political analysts said although Mr Deng could turn up for the closing ceremony on Sunday, his health would preclude him from lingering in the spotlight. {para} In spite of the disclaimer by Ms Deng Nan, sources in Beijing said the senior leader was rather feeble, and that his mind wandered, one of the reasons why it was difficult to bring him out in a public gathering. {para} ``Deng is recovering from a successful operation of the prostate gland,'' an informed source said. {para} ``Beijing is getting chilly, and the old man's doctors are counselling caution.'' {para} But the sources said that in spite of his health, Mr Deng had adopted a hands- on approach to managing the congress. {para} Aside from his daughter, Mr Deng's eldest son and the head of China's welfare organisation for the handicapped, Mr Deng Pufang, is also a congress delegate. {para} Analysts said at least one of the two high-profile Deng offspring would be promoted to the policy-setting Central Committee later this week. {para} Even more intriguing is the sudden rise in the stature of the head of the Deng Xiaoping Office, General Wang Ruilin, who is a full- fledged delegate representing the People's Liberation Army. {para} Already a Central Committee member, General Wang, who became the patriarch's aide-de-camp during the Cultural Revolution, is tipped to be inducted to the committee's secretariat. {para} ``[Mr Deng's] children or Wang Ruilin read him the early drafts of Jiang Zemin's report and the patriarch made repeated corrections and suggestions,'' a source close to the family said. {para} ``The old man obviously believes that if Deng Xiaoping Theory is written into both the party charter and the 14th congress report, it will be preserved in perpetuity.'' {/article}

{headline} Mystery over Deng's health {byline} By DANIEL KWAN {article} MYSTERY still surrounds the health of 88-year-old patriarch Mr Deng Xiaoping who apparently failed to meet his old friend former Japanese Prime Minister Mr Kakuei Tanaka. {para} Mr Tanaka arrived in China on Thursday and yesterday had a meeting with Mr Deng's son, Mr Deng Pufang, at the Diaoyutai Guesthouse in Beijing where Mr Tanaka was staying. {para} The last foreign guest Mr Deng met publicly was the former Soviet Union president Mr Mikhail Gorbachev in May 1989. {para} Mr Tanaka who was instrumental in the establishment of relations between China and Japan two decades ago had already met senior Chinese leaders including the seriously ill vice- president Mr Wang Zhen and party general-secretary Mr Jiang Zemin. {para} The official New China News Agency reported that Mr Deng and Mr Tanaka had passed on their best wishes to each other through Mr Jiang. {para} Speculation has been rife over Mr Deng's health recently. One report claimed that he was in hospital in Shanghai. {para} In his meeting with Mr Tanaka yesterday, Mr Deng Pufang was quoted by the China News Service as saying that his father mentioned him frequently. {para} After the meeting, the NCNA said Mr Tanaka also met ``his old Chinese friends'' but apparently did not include the patriarch. {/article}

{headline} Partial amnesty for 1989 activists {headline} Partial amnesty for 1989 activists {byline} By WILLY WO-LAP LAM {article} CHINESE security chief Mr Qiao Shi has proposed a partial amnesty for dissidents associated with the 1989 pro-democracy movement. {para} In a recent internal meeting of leaders of the Communist Party, Mr Qiao, who is a member of the politburo Standing Committee, also pushed for a commutation of the sentences of intellectuals jailed for their alleged role in the ``counter-revolutionary rebellion''. {para} If approved by the party elders and his politburo colleagues, the amnesty could take place soon after the 14th party congress or at the National People's Congress (NPC) next spring. {para} Chinese sources said Mr Qiao had proposed to extend leniency to an initial list of more than 40 activists. {para} A number of imprisoned intellectuals who have displayed a ``good attitude'' will have their sentences shortened under the technicality of a ``bail to seek medical treatment''. {para} Potential beneficiaries of the largesse include ``black hand'' dissidents Chen Ziming and Wang Juntao, who were given 13-year jail terms last year. {para} Chinese sources said Mr Qiao, who had emerged as the one politburo member who had given the most support for patriarch Mr Deng Xiaoping's new wave of reform, was anxious to foster a ``tolerant social atmosphere'' for economic liberalisation. {para} The head of the party's security and legal establishment is also eager to woo the nation's disgruntled intellectuals and to spruce up its international image. {para} The sources said, however, Mr Qiao's suggestion had met fierce opposition from the conservative camp. {para} ``Among the six-member politburo Standing Committee, Qiao thought at first he could count on the support of [propaganda chief] Li Ruihuan and [General Secretary] Jiang Zemin,'' said a source close to the judicial establishment. {para} ``With a tied vote, the matter could then be referred to Deng Xiaoping, one of Qiao's mentors. However, Jiang has subtly indicated that he will not support such a motion.'' {para} It is understood Mr Qiao will pursue the matter with the new politburo Standing Committee that will be installed by the 14th congress. {para} ``There is a good chance a relatively reformist politburo Standing Committee will seriously consider a partial amnesty to be announced at the NPC,'' the source added. {para} ``Quite a number of NPC deputies as well as members of the Chinese People's Political Consultative Conference have lobbied for such a measure of magnanimity.'' {para} Chinese sources said Mr Qiao, who was expected to wield more power than Mr Jiang after the 14th congress, had been behind the policy of allowing dissidents to leave the country. {para} Among well-known activists who will soon be permitted to leave the country is literary theorist Liu Xiaobo. {para} Liu took part in a hunger strike on June 3, 1989, and was later given a relatively light jail term. {para} His friends said Liu planned to take up a fellowship at a US university. {para} The security chief is believed to have argued for a lighter sentence for the former aide to former party chief Mr Zhao Ziyang, Bao Tong. {para} Last July, Bao was given a seven-year jail term, a slightly shorter duration that had been expected. {para} Soon after the June 4 crackdown, Mr Qiao also laid down the instruction that an intellectual suspected of involvement in the ``turmoil'' could only be detained if his work unit, the public security department, and the police unit in his neighbourhood all testified to his complicity. {para} Chinese sources said, however, neither Mr Qiao nor his more conservative colleagues were prepared to consider a full amnesty to the thousands of activists who are still in hiding or are held without trial. {para} A crackdown on underground dissident rings has gone on unabated despite the party's commitment to concentrate on economic construction and to play down class struggle. {/article}

{headline} Key officials to retain role in state enterprises {byline} From GEOFFREY CROTHALL in Beijing {article} THE Communist Party would continue to play a crucial role in China's state- run enterprises even after the economic reform process had been completed, a group of enterprise party secretaries said yesterday. {para} Although the Government has stated that a key aspect of reform is separating the functions of party and government from state- owned enterprises, the officials made it clear they would not be handing in their resignations just yet. {para} ``Party organisations will continue to play an important role in our enterprises,'' the party secretary of the Jilin Chemical Industry Corp, Mr Li Qisheng, said at a press conference in Beijing. {para} Even after the separation of party and government functions from enterprises, the party organisations within those enterprises would be ``indispensable in promoting material, cultural and ideological progress'', he said. {para} Mr Li pointed out that the main role of the party in state-run enterprises was the promotion of economic reform but stressed the party organisations would continue to ``raise the ideological awareness and ethical standards of the workers''. {para} He added: ``We will also do our utmost to build a better party at the grassroots level.'' {para} Mr Li stressed that party organisations should focus on serving the establishment of a ``socialist market economy'' and should be ``subordinated'' to that goal. {para} However, political observers pointed out that ``subordinating'' party organisations to the goal of establishing a socialist market economy was just the same as saying local party officials should obey the dictates of the central party and implement its policies. {para} The party officials, all of whom are delegates to the 14th congress, also emphasised that separation of enterprise and government functions did not mean the central Government would relinquish its control on macro-economic planning. {para} ``When we talk of government and enterprise separation, we are referring to changes in the function of the Government, not its leadership relationship to enterprises,'' said the Vice- Minister of the Economic and Trade Office, Mr Wang Zhongyu. {para} Beijing had adopted a policy of ``macro-control, micro-flexibility'' which, Mr Wang said, meant that local governments should not interfere in the day-to-day running of enterprises but that the central Government would retain its role in devising overall economic policy, drafting regulations and setting planning targets. {para} Beijing would set general guidelines and parameters on such issues as wage levels and retirement benefits within which enterprises could operate but it would be up to the enterprises themselves, based on their economic performance, to determine the exact level of wages and benefits, he said. {para} In order to give individual enterprises more power, the State Council had issued a circular outlining ``14 rights'' which would be delegated to state-run enterprises over the next few years, Mr Wang said, although he did not specify what those rights were. {para} The Economic and Trade Office was currently urging local governments to draw up detailed regulations on how these 14 rights could be put into effect in their localities, he said. {/article}

{headline} Leaders take note in group sessions {article} TOP Chinese leaders yesterday demonstrated their ``political openness'' as they made their rounds to listen to the opinions of congress delegates at group discussions. {para} While party General Secretary Mr Jiang Zemin spent almost two hours listening to opinions from the Shanghai delegation, premier Mr Li Peng lectured the Beijing delegates on the merits and weaknesses of market economy. {para} Known as a conservative, Mr Li told the delegates that the proposition of a socialist market economy was ``a major theoretical breakthrough'' of the party. {para} According to a report by the New China News Agency yesterday, Mr Li told the delegates that formulation of a socialist market economy theory not only ensured the nature of socialism but also further promoted economic development. {para} But Mr Li also said the theory which was the brainchild of paramount leader Mr Deng Xiaoping was not perfect and needed to be further enriched and improved through practice. {para} ``We should employ market mechanism better in directing the flow of social resources, regulating production in response to changes on the market, rationalising the economic structure, improving product quality, and raising efficiency,'' Mr Li said. {para} ``Since pure market mechanism has its own weakness, macro-level controls are indispensable in running a socialist market economy,'' he said. {para} He also warned that a market economy was still in an embryonic stage in China. {para} The official China News Service said Mr Jiang was particularly interested in the economic development in Shanghai and listened attentively to a report given by mayor Mr Huang Ju when he attended their discussion meeting. {para} - DANIEL KWAN {/article}

{headline} Hi-tech boost for delegates {article} THE Chinese Communist Party will give a technological facelift to the 14th Congress by employing 21st century computer know-how in the week-long conclave. {para} According to a report by the official New China News Agency, the 1,989 delegates will have access to a computer system which can provide them with the latest data and statistics. {para} The new system, jointly developed by the Executive Office of the Party Central of the CCP and a computer company in Beijing, also features an electronic mail system to facilitate communication among delegates. {para} It would be used by the delegates when they cast their votes for the new Central Committee and the Central Commission for Disciplinary Inspection. {para} The results of their voting are expected to be broadcast through an electronic display. {para} However, Chinese sources said it was unlikely the authorities would publicly release information about the number of votes each new Central Committee members got. {para} Other items on the agenda of the Congress include the approval of a Political Report on the implementation of a ``socialist market economy'' and the endorsement of a new party charter that was drawn up by the Ninth Plenum of the Central Committee last week. {para} Beijing has carried out an extensive clean-up exercise around the capital. {para} A big billboard advertising a documentary of paramount leader Mr Deng Xiaoping was put up in the city centre. {para} To publicise the congress, national radio will broadcast the opening of the congress in 43 languages and Cantonese would be used for the first time as an official dialect. {para} Another novel feature of the congress was the addition of four news conferences during the conclave at which leaders from the coast and state-owned enterprises would meet the press. {para} It was believed that a photo session would be arranged for the new members of the Politburo Standing Committee at the end of the congress. {para} Despite its apparent ``openness'', tight security was maintained throughout Beijing - especially in the Haidian District where most universities are concentrated - to ensure the event would be a success. {para} A mainland newspaper reported that the Beijing Public Security Bureau had been instructed that all policemen in the capital must be on alert during the congress and prominent dissidents were put under close surveillance. {para} The report claimed that in 10 days last month, Beijing policemen clamped down on 58 underground syndicates and uncovered 475 criminal cases. {para} ``To ensure safety . . . policemen have checked all accommodation and routes of the delegates,'' it said. {para} - DANIEL KWAN {/article}

{headline} Reforms slowed `to avoid unrest' {byline} By WILLY WO-LAP LAM {article} SENIOR officials have hinted that market reforms have been slowed down to minimise the adverse social impact. {para} They also indicated that China would set up a Western-style civil service within three years. {para} In an interview with reporters covering the 14th congress, the Vice-Minister for the Restructuring of the Economic System, Mr Hong Hu, said that since 1986 the country had had a social insurance system for ``workers waiting for jobs'', a euphemism for the unemployed. {para} Mr Hong implied that to avoid social unrest, the authorities had adopted a cautious pace in liberalising the rigid state enterprise structure. {para} For example, despite propaganda about closing down inefficient state enterprises, only 117 units were closed in the first seven months of the year. {para} ``The central authorities have been working hard to minimise the number of bankrupt enterprises and make proper arrangements for laid-off people. {para} ``We are also improving the insurance system for people awaiting jobs.'' {para} Mr Hong disclosed that from 1986 to last August more than 415,000 unemployed workers had pocketed insurance cheques, while Labour Ministry units had helped 280,000 laid-off workers find jobs. {para} In the past 12 months, central and local authorities had contributed about 700 million yuan (HK$989.8 million) for job insurance, of which 200 million yuan had been paid out. {para} Mr Hong said the share- holding system, a cornerstone of the ``socialist market economy'', would be trialled at a cautious pace. {para} ``At present the share-holding system is being tried out only in a few enterprises,'' he said. ``In the first seven months of this year, the State Council approved 363 more enterprises to carry out this system.'' {para} He said that in the development of the stock system, Beijing was emphasising quality rather than quantity, ``to avoid chaos and make it [the system] standardised''. {para} Mr Hong also admitted for the first time that the retail price index in some larger cities had reached double digits. {para} He claimed, however, that nationally the index had only risen by 4.8 per cent in the first eight months of the year. {para} Internal party documents have said that a double-digit inflation rate is a ``danger signal'' for potential unrest among urban workers. {para} Meanwhile, the Minister of Personnel, Mr Zhao Dongwan, said a ``public servants system'' would be instituted in three years. {para} ``It will first be implemented in the government departments at the central and provincial levels, and then at the lower levels,'' Mr Zhao said. {para} According to Mr Zhao, regulations concerning this system are under examination for approval. {para} He said some areas have experimented with it for the past four years and a number of specific regulations were already in force across the country. {para} He said China had trained a contingent of people to implement this system and a salary system for public servants had been drafted. {para} Economists in Beijing said it was more difficult to implement a Western-style personnel system in the Government because staffers still expected life tenure and fixed increments. {/article}

{headline} Hard-liners invited to conclave {byline} By DANIEL KWAN {article} AT least six prominent leftists who have resisted patriarch Mr Deng Xiaoping's reform programme have clawed their way back to the 14th party congress, it was reported yesterday. {para} According to the pro-Beijing Wen Wei Po, three hard-liners, who were spurned by their colleagues during balloting for delegates to the congress earlier this year, have been invited to sit in on the week-long conclave. {para} They are Mr Wang Renzhi, head of the Propaganda Department, Mr Deng Liqun, a Marxist ideologue, and Mr Gao Di, the editor of the party's mouthpiece People's Daily. {para} While their status at the congress would preclude them from casting votes for the Central Committee later this week, they could still influence the flow of events through lobbying delegates. {para} It is believed their participation was made possible by the special permission of General Secretary Mr Jiang Zemin. {para} Other conservatives who joined the 1,965 delegates at the Great Hall of the People yesterday included Mr He Jingzhi, the acting Minister of Culture, and former vice- minister of education, Mr He Dongchang. {para} The out-going party secretary of Beijing, Maoist Mr Li Ximing, was earlier elected a member of the congress presidium. {para} Media attention yesterday was focused on former prime minister Mr Hua Guofeng, the hand-picked successor of the late party chairman, Mao Zedong. {para} Elected as a delegate to the congress, Mr Hua was besieged by journalists in the lobby of the Great Hall of the People. {para} Mr Hua has maintained a low profile since stepping down in 1980. {para} But Mr Huang Xunxin, a vocal critic and a Taiwan delegate to the Standing Committee of the legislature, was surprisingly listed as a guest at the congress. {para} Mr Huang caught media attention last March when he publicly protested against the construction of the Three Gorges project at the conclusion of the annual session of the NPC. {para} The presence of leftists at yesterday's congress was ironic as Mr Jiang promoted Mr Deng's dictum of ``fighting leftism'', or remnant Maoism. {/article}

{headline} Corruption crackdown stepped up {byline} By WILLY WO-LAP LAM {article} THE Chinese Communist Party has strengthened its legal and organisational work with a view to fighting corruption and tightening discipline. {para} An unprecedented six members of the ruling politburo as well as the Central Committee secretariat are devoted to the allied fields of personnel, discipline, legal and judicial affairs. {para} They are led by two members of the politburo Standing Committee - Mr Qiao Shi, in charge of legal and security affairs; and Mr Hu Jintao, whose portfolio is personnel and organisation. {para} The Minister of Supervision, Mr Wei Jianxing, has been promoted as a politburo member as well as head of the Central Commission for Disciplinary Inspection. {para} The executive vice-chairman of the National People's Congress, (NPC) Mr Wang Hanbin, was on Monday elected an alternate member of the politburo. {para} Mr Hu is also in charge of the Central Committee secretariat - the executive wing of the politburo. {para} Mr Wei and the Supreme People's Court President, Mr Ren Jianxin, also sit on the secretariat. {para} In accordance with patriarch Mr Deng Xiaoping's repeated dictums on how corruption could alienate the people and lead to the dissolution of the Communist Party, the party will initiate tougher anti-corruption policies and campaigns after the Congress. {para} Within the party, Mr Wei and Mr Ren will co-ordinate efforts to crack down on cadres making use of their guanxi, or connections, to secure economic advantage. {para} The problem has become acute after the passage of official documents earlier this year authorising party and government departments to run enterprises on the side. {para} In recent years, the prestige of the party has fallen because of widely known cases in which senior cadres, including those in the Propaganda Department, are alleged to have escaped criminal punishment for graft. {para} Mr Qiao, who will replace Mr Wan Li as NPC chairman next spring, will, together with Mr Wang, tighten up anti-corruption legislation. {para} While ousted party chief Mr Zhao Ziyang professed a lot of admiration for Hongkong's Independent Commission Against Corruption, Beijing lacks laws and institutions to fight graft. {para} Political sources said aside from the war on economic crimes, the party would step up its guard against ``peaceful evolution'' by promoting discipline for its 51 million members. {para} This is in accordance with Mr Deng's unpublished instructions that as the country develops a ``socialist market economy'', commensurate steps must be taken to weed out the ``corrupt'' influence of capitalism. {para} Sources said although the campaign to fight corruption and promote discipline had positive aspects, it might allow conservative ideologues to revive Maoist practices such as thought control. {para} The powers of Mr Qiao, who controls the dossiers of all party members, will also be boosted. {/article}

{headline} Politburo posts for Zhao proteges {headline} Deng gives politburo posts to Zhao proteges {byline} By WILLY WO-LAP LAM {article} THE Chinese Communist Party has put together a politburo that includes allies of disgraced party chief Mr Zhao Ziyang. {para} Patriarch Mr Deng Xiaoping, who may attend the 14th Congress as a ``special delegate'', has also installed several close aides in the politburo and its executive body, the Central Committee secretariat. {para} Chinese sources said the Congress, which opens in the Great Hall of the People today, would probably endorse a 23-member politburo. {para} The 1,989 delegates will also pick a five-member Central Committee secretariat, which implements decisions and writes documents for the politburo and other leading bodies. {para} The sources said a dark- horse candidate, the party secretary of the city of Chongqing, Mr Xiao Yang, would probably get a seat on the new Politburo, whose membership will not be announced until Sunday. {para} Mr Xiao, 63, will soon replace Mr Yang Rudai, a retiring politburo member, as the party boss of Sichuan, which, with more than 100 million people, is China's largest province. {para} A long-time protege of Mr Zhao, himself a former Sichuan party secretary, Mr Xiao has spearheaded the drive to make the land-locked province catch up with the southeast coast. {para} The sources said Mr Xiao had won the backing of Mr Deng for having bucked efforts by leftist ideologues to replace economic reform with class struggle as the ``key link'' of party work. {para} An east German-trained technocrat, Mr Xiao is behind yet to be approved plans for the creation of a new Three Gorges Province centred on Chongqing, the business hub of Sichuan. {para} Apart from Mr Xiao, there will be five other Politburo members representing the provinces and centrally administered cities. {para} They are the party secretary-designate of Beijing, Mr Chen Xitong, and the party bosses of Shanghai, Tianjin, Guangdong and Shandong, respectively Mr Wu Bangguo, Mr Tan Shaowen, Mr Xie Fei, and Mr Jiang Chunyun. {para} At least one other member of the new politburo, the head of the General Office of the Central Committee, Mr Wen Jiabao, is considered a Zhao loyalist. {para} Mr Wen, 50, accompanied Mr Zhao to comfort the students at Tiananmen Square on May 20, 1989, when martial law was declared in the capital. {para} However, supporters of the former party chief are disappointed that a former member of the politburo Standing Committee, Mr Hu Qili, will not be fully rehabilitated owing to opposition from the hard-liners. {para} Earlier, Mr Hu was mentioned as a candidate for either the politburo or the secretariat. {para} Two vice-premiers, Mr Zhu Rongji and Mr Zou Jiahua, and four ministers are due to join the ruling body. {para} The four are Foreign Minister Mr Qian Qichen, Minister of Science and Technology Mr Song Jian, Minister of Foreign Trade Mr Li Lanqing and Minister of Supervision Mr Wei Jianxing. {para} Other newcomers include two military representatives - Generals Liu Huaqing and Yang Baibing - and party functionaries Mr Hu Jintao, who is in charge of organisation, and United Front Chief Mr Ding Guan'gen, who is Mr Deng's bridge partner. {para} Only six incumbents will be allowed to stay. They are the party General Secretary, Mr Jiang Zemin; premier, Mr Li Peng; Security Chief, Mr Qiao Shi; Ideology and Propaganda Chief, Mr Li Ruihuan; vice-premier, Mr Tian Jiyun; and Education Minister, Mr Li Tieying. {para} As reported in the South China Morning Post last month, Mr Jiang Zemin, Mr Li Peng, Mr Qiao Shi, Mr Li Ruihuan, Mr Zhu Rongji, Mr Hu Jintao and General Liu Huaqing have been nominated to the supreme politburo Standing Committee. {para} ``Apart from the Cultural Revolution, it is rare in the history of the party that nearly three-quarters of the politburo will be new faces,'' a veteran cadre in Beijing said. {para} ``Most of the inductees are reformists or moderates, reflecting Deng Xiaoping's determination to have trustworthy `cross-century cadres' to push through his pro-market programmes.'' {para} Sources in Beijing said three officials would probably be elevated to the Secretariat. {para} Apart from Mr Hu Jintao, a former party secretary of Tibet, they are the Director of the Deng Xiaoping Office, General Wang Ruilin, and the party secretary of the open city of Qingdao, Mr Yu Zhengsheng. {para} General Wang, a former staffer at the Central Military Commission, has headed the Deng Office since the early 1980s. {para} He accompanied Mr Deng on his famous tour of southern China early this year, and has played a key role in helping the frail leader formulate his reform strategies. {para} Mr Yu is a classmate and crony of Mr Deng's eldest son, Mr Deng Pufang. {para} Analysts said the probable promotion of General Wang and Mr Yu reflected Mr Deng's anxiety to keep close tabs on the policy-making of the Central Committee. {para} In apparent contravention of the principle of the separation of party and government, which was laid down at the 13th Congress of 1987, Mr Deng had decided that several of the politburo heavyweights will also hold major positions in the government and legislature. {para} For example, party boss Mr Jiang, who already doubles as the chairman of the Central Military Commission, is a candidate to succeed Mr Yang Shangkun as State President. {para} Both Mr Tian and Mr Qiao have a good chance of taking over from Mr Wan Li as the Chairman of the National People's Congress, China's legislature. {para} And Mr Wei, whose portfolio is combatting corruption in government, is a leading candidate to succeed Mr Qiao as the Head of the party's Central Commission for Disciplinary Inspection. {para} ``It has been a long-term goal of reformists close to Zhao that the anti-corruption functions of the party be separated from those of the government,'' a source said. {/article}

{headline} A power shift from the centre to the provinces {byline} By WILLY WO-LAP LAM {article} THE 14th party congress has confirmed a trend in China that power is shifting from the centre to the regions. {para} Chinese sources said the 23-member politburo would have at least six representatives of major provinces and cities, namely Beijing, Tianjin, Shanghai, Sichuan, Shandong and Guangdong. {para} They said there was a good chance that, because of last-minute lobbying, there would be a seventh ``regional seat'' for the party secretary of coastal Fujian province, Mr Chen Guangyi. {para} If Mr Chen, 59, is inducted, he would acquire the seat originally reserved for the chief of science and technology, Mr Song Jian. {para} Analysts said the expansion of regional power was made possible because of the lopsided strength of congress delegates who hail from the localities. {para} The 1,401 regional delegates account for 70.43 per cent of the total of 1,989. {para} By contrast, representatives from central-level party and government offices, which in previous congresses took up at least half of the seats, number only 329, or 16.54 per cent of the total. There are also 259 army delegates. {para} The analysts said the regions' representation on the policy-setting Central Committee would be higher than that in the politburo. {para} It is understood that while touring southern China in January and February, patriarch Mr Deng Xiaoping gave specific instructions on giving more powers and autonomy to the regions, most of which are bastions of reform. {para} Chinese sources said in view of the fact that central funds were broke while local economies were booming, the best and brightest among younger cadres were forsaking central-level positions for the regions. {para} A source said: ``Party elders are encouraging their sons and daughters to go south.'' {para} Beijing was in the past week abuzz with speculation that the daughter of Mr Deng, Ms Deng Nan, a Vice- Minister of Science and Technology, might be transferred to a senior post in Shandong, a ``model'' province. {para} The migration of well-connected cadres to the regions, in turn, makes it even more difficult for Beijing to maintain the type of control that it has had since 1949. {para} Analysts said, however, not all of the seven regional leaders tipped for the politburo were clear-cut liberals. {para} Beijing mayor Mr Chen Xitong, who will succeed Maoist Mr Li Ximing as party boss of Beijing, played a large role in persuading Mr Deng to crack down on the student demonstrators of 1989. {para} However, Mr Chen is deemed a ``radical'' in the area of attracting foreign capital to his city. {para} Even though he hails from a province that has a long tradition of the open door policy, Mr Chen Guangyi is considered a conservative by foreign businessmen. {para} Sources in Fujian said Mr Chen Guangyi owed his rise to the patronage of the retiring member of the politburo Standing Committee in charge of personnel, Mr Song Ping. {para} Both had worked in Gansu, and Mr Song is reported to have blocked efforts by the reformist faction to replace Mr Chen with a younger and more reform-minded cadre. {para} The party bosses of Guangdong and Tianjin, Mr Xie Fei and Mr Tan Shaowen, are considered moderates rather than radical reformists. {/article}

{headline} Reforms denounced in advance {headline} Lu Ping denounced reforms in advance {byline} By LOUIS NG {article} THE proposed Government-Legislative Council Committee was a de facto Executive Council, the top Chinese official in charge of Hongkong affairs told Governor Mr Chris Patten four days before his policy speech was made public. {para} The Governor's reform blueprint was flatly denounced in what was described as only a ``written message'' from Mr Lu Ping, the Director of the State Council's Hongkong and Macau Affairs Office. {para} The letter, dated October 3, was read by New China News Agency vice-director Mr Zhang Junsheng to a special meeting of local delegates to the National People's Congress and Chinese People's Political Consultative Committee yesterday. {para} Mr Lu's ``message'' was in response to a letter from Mr Patten dated September 26 outlining the political reforms he was going to propose in his speech. {para} The letter was passed on to Mr Lu by the British Ambassador to China, Sir Robin McLaren. {para} Mr Lu launched a two-pronged attack on Mr Patten's constitutional development plan, singling out the proposal of a Government- Legco Committee as particularly objectionable. {para} Mr Lu said the establishment of such a committee would be a major change to Hongkong's constitutional system. He was particularly worried that some of the 13 legislators of the United Democrats of Hongkong would be allowed to enter the core of the Government. {para} China has vehemently opposed the appointment of United Democrats to the Executive Council, the Governor's inner cabinet. {para} Mr Patten said in his policy address that the committee would serve as a forum where the administration could discuss with legislators the ``handling of the administration's legislative and financial programmes''. {para} On the 1995 electoral changes, Mr Lu was angry with Mr Patten's insistence on disclosing all his proposals to the public before the two sides sat down together. {para} Mr Lu made it clear in the letter that it was not sufficient to just ``inform'' China. Mr Patten should have discussed matters with China all along the way. {para} He said changes made in 1995 would need to converge with the political blueprint laid down in the Basic Law. {para} Mr Zhang is also known to have accused Mr Patten of ``playing tricks'' with the NCNA in ``informing'' it of the contents of his address. {para} Mr Zhang pointed out that Mr Patten did not keep the NCNA fully-informed even as late as October 6 - the day before the address was delivered. {para} He told yesterday's meeting that when vice-director Mr Wang Pinqing met Mr Patten at Government House on the afternoon of October 6, Mr Patten said a written copy of the address was not yet ready and therefore he could not give it to the agency. {para} But on the same day in Beijing, Sir Robin handed a copy to the Deputy Director of State Council's Hongkong and Macau Affairs Office Mr Chen Ziying. {para} Meanwhile, local deputy to the National People's Congress, Mr Cheng Yiu-tong urged the Chinese Government to establish a special department next year to look after a smooth transition. {para} ``If convergence cannot be reached between China and Britain, it is necessary for China to set up a special department to minimise the problems arising from transition,'' Mr Cheng said. {para} ``The Conservative Party has made a fundamental change in its policy to China. We must make corresponding changes,'' he added. {/article}

{headline} Media `to speak with one voice' {byline} From DANIEL KWAN in Beijing {article} THE Chinese media has been ordered to ``speak with one voice'' in covering the 14th Party Congress. {para} Effusive eulogies on the virtues of patriarch Mr Deng Xiaoping dominate television news and have been spread across the front pages of national newspapers. {para} While almost all major papers yesterday devoted much of their editorial space to the congress, they mainly used dispatches by official news agencies, not stories from their own reporters. {para} For example, the People's Daily used only reports provided by the New China News Agency on its front page. {para} It also published a special feature glorifying the achievements of the party in the past 14 years, saying the Chinese people would continue to follow Mr Deng's reform instructions. {para} The national television network, China Central Television (CCTV), was no less zealous. {para} In its newscast last night, CCTV devoted more than five minutes to a series of group discussions held by congress delegates. {para} While the delegates shown ranged from party secretaries from prosperous cities such as Shanghai and Tianjin to ordinary cadres from impoverished provinces such as Gansu and Shaanxi, all expressed support for the idea of a ``socialist market economy''. {para} The story even included such well-known conservatives as Mr Wu Shuqing, the president of Beijing University. {para} The hardline economist was quoted as saying that since the market economy was not the monopoly of capitalism, China could also experiment with market forces. {/article}

{headline} Students `free to go abroad' {article} CHINA is set to further liberalise its policy on education by granting passports to all students who want to go abroad to further their studies, a senior party official said. {para} Mr Li Tieying, a Politburo Standing Committee member and head of the Education Commission, recently said that China would lift its quotas on the numbers of students allowed to study abroad. {para} According to the latest issue of Pai Shing, Mr Li reportedly said that China would issue passports to students who have been accepted by foreign universities. {para} And the Government would respect their ``freedom of travel'' when they returned to China after graduation. {para} Mr Li was quoted as saying that while the authorities encouraged Chinese students to go abroad, they hoped that they would return after graduation. But they would not be required to stay in China. {para} The relaxation marked a significant change of attitude by the authorities. China began to impose an annual quota on the number of students allowed to go abroad after the 1989 student-led pro-democracy demonstrations. {para} Mr Li also said that China would begin to phase out the number of government-sponsored students. {para} In addition, China would further lift its control on education institutions. {para} According to Mr Li, the salary of university professors would be raised from the current 400 yuan (HK$572) to about 1,000 yuan a month. {byline} - DANIEL KWAN {/article}

{headline} New propaganda, culture chiefs {byline} By WILLY WO-LAP LAM {article} A MODERATE and a conservative have been appointed to head the Communist Party's Propaganda Department and the Culture Ministry, respectively. {para} Sources in Beijing said the Organisation Department had issued documents on the appointment of Mr Zheng Bijian as first vice-chief of propaganda and Mr Liu Zhongde as first vice-minister of culture. {para} It is understood the two will assume the leadership of their units following the retirement of Propaganda Chief Mr Wang Renzhi and acting Culture Minister Mr He Jingzhi soon after the 14th Party Congress. {para} Mr Zheng, 60, the Vice- President of the Chinese Academy of Social Sciences (CASS), is considered a political moderate who is acceptable to both the liberal and conservative wings of the party. {para} Being one of the personal secretaries of Mr Hu Yaobang in the mid-1980s, Mr Zheng helped the late party chief draft many of his reformist policies. {para} However, Mr Zheng, who was trained as a Marxist theorist, also has a conservative streak. {para} After the Tiananmen Square crackdown, he helped discipline free-thinking intellectuals in the CASS, deemed by the conservatives as a ``disaster zone'' of bourgeois liberalisation. Chinese sources said Mr Zheng was charged with re- organising the Propaganda Department, long a bastion of remnant Maoism. {para} Under retiring Propaganda Chief Mr Wang, the department has consistently blocked efforts by the Deng Xiaoping faction to disseminate the patriarch's instructions on fast-paced reforms. {para} Intellectuals in Beijing, however, have cast doubt on the ability of Mr Zheng to rein in the hardline ideologues. {para} ``Zheng may be a shade more liberal than the other commissars,'' said a newspaper editor in the capital. {para} ``However, having been trained as an ideologue himself, Mr Zheng has the same background as many of his leftist colleagues.'' {para} The editor added that most of the senior staff of the department were loyal disciples of conservative patriarchs Mr Chen Yun and Mr Deng Liqun, and that Mr Zheng lacked the seniority and prestige to impose a more liberal agenda. {para} Mr Liu, who will take over as culture minister following the imminent retirement of the ailing Maoist, Mr He, is a protege of the Premier, Mr Li Peng. {para} An engineering graduate from the elite Harbin Polytechnic University, Mr Liu, 59, got his big break when he was appointed vice-minister of the State Education Commission (SEC) in 1985. {para} It is believed that Mr Liu got on well with Mr Li, who was SEC minister in the mid-1980s. {para} In 1988 Mr Liu was promoted to deputy secretary-general of the State Council and he became a vice-chief of propaganda early this year. {para} Analysts said a sign of Mr Liu's rising star was that he was appointed spokesman and head of the propaganda team for the 14th congress. {para} They added intellectuals in Beijing were generally disappointed with the new appointments as they had been hoping Mr Deng might use his influence to install bona fide liberals to the important positions. {para} For example, propaganda chief under Mr Hu, Mr Zhu Houze, and Mr He's predecessor, Mr Wang Meng are deemed better candidates to implement the Deng faction's more open-minded policies on ideology and propaganda. {/article}

{headline} Jiang goes his own way {byline} By WILLY WO-LAP LAM {article} COMMUNIST Party General Secretary Mr Jiang Zemin, who has secured his re-election to a second term at the 14th congress, is toeing a line that is markedly different from the liberal pronouncements of patriarch Mr Deng Xiaoping. {para} During marathon sessions with delegates to the conclave, Mr Jiang has put his emphasis on orthodox values such as ``collectivism'' and ``communist ideals''. {para} The party chief, who owes his rise to the conservative elders, has also offered protection to Maoist ideologues. {para} While speaking to delegates from Shanghai, Mr Jiang laid down the criteria for picking a new generation of leaders. {para} ``It is necessary to be good at discovering and boldly promoting outstanding young people,'' the national media yesterday quoted Mr Jiang as saying. {para} ``It is important to educate the young people with patriotism, collectivism, socialism and communist ideals.'' {para} Political sources in the capital said in his lectures on propagating new leaders, Mr Deng had put the ability to blaze new trails in reform before ideological rectitude. {para} The sources said since the summer, Mr Jiang had subtly offered protection to many Maoist ideologues. {para} For example, the party chief funnelled support to the hardline director of the People's Daily, Mr Gao Di, during his dispute with the Voice Of Overseas Chinese paper, an organ of the Office of Overseas Chinese Affairs. {para} After Mr Gao had in July published a commentary attacking intellectuals in Beijing for leaking stories to the foreign media, Voice published an article satirising his Maoist ways. {para} Upon the urging of Mr Gao, Mr Jiang forced Overseas Chinese Affairs chief Mr Liao Hui to discipline the editor of Voice. {para} Sources said Mr Jiang also declared his backing for the leftists while visiting the sick bed of ideologue Mr Hu Qiaomu, who died last month. {para} The sources said in spite of the fact that his Political Report to the congress appeared to be a eulogy of Mr Deng, Mr Jiang had subtly tried to undercut his authority. {para} While talking to congress delegates, Mr Jiang made it clear the report was a ``product of collective wisdom''. {para} The party chief said more than 3,000 representative people, including the elders in the Central Advisory Commission, had offered their views and made corrections to the earlier drafts of the report. {para} An Asian diplomat said: ``If the report is a product of collective wisdom, the status of Deng as chief architect of reform has been undercut. {para} ``Moreover, Jiang is hinting that in addition to Deng, he also has to take into account the views of the other wings of the party, including conservatives in the Advisory Commission.'' {para} Diplomats in Beijing said in spite of his failure to back Mr Deng, Mr Jiang had a good chance of succeeding Mr Yang Shangkun as state President next spring. {/article}

{headline} Top cadres refuse to toe Deng line {byline} By WILLY WO-LAP LAM {article} TOP conservative cadres have refused to toe patriarch Mr Deng Xiaoping's line about concentrating on fighting ``leftism'' in spite of its having been enshrined at the 14th Congress. {para} And the son of conservative patriarch Mr Chen Yun, Mr Chen Yuan, said his father had all along been a supporter of market forces. {para} During small-group discussions among congress delegates, senior politicians have expressed a surprising divergence of opinions. {para} The outgoing member of the politburo Standing Committee, Mr Song Ping, has stuck to his well-known stance by saying nothing about combatting ``leftism''. {para} While talking to representatives from Gansu province, Mr Song, whose portfolio is personnel, said the priority task of the party was to ``strengthen party-building and [ideological] education among members''. {para} He added ``only those who are faithful to the party's basic line and have made outstanding achievements'' can be promoted to the leading bodies. {para} A veteran party member in Beijing said: ``By the party's basic line, Deng Xiaoping means putting economic work before class struggle.'' {para} ``For Song Ping, however, it means instilling in party members the most orthodox interpretations of Marxism.'' {para} By contrast, in his address to delegates from Anhui province, Mr Wan Li, another retiring politburo member, played up the importance of combatting ``leftism''. {para} ``We must guard against `leftist' tendencies,'' Mr Wan said. ``Leftist thinking is deep-rooted in the history of our party and it is very harmful. It should be got rid of now.'' {para} Mr Wan, an ally of Mr Deng, added party members must ``emancipate their minds and persist in whatever can promote productive forces''. {para} Analysts said it was significant Mr Wan made not a single reference to ideological education. {para} Mr Wan's views were seconded by security chief Mr Qiao Shi, who openly disputed Mr Song's argument that ``morality'' goes before ability as a criterion for promoting cadres. {para} In his Political Report to the congress, General-Secretary Mr Jiang Zemin upheld Mr Song's line when he said officials being groomed for promotion ``must have both morality and ability''. {para} In his talk to delegates from Zhejiang province, however, Mr Qiao put competence - a cadre's achievement in the reform enterprise - before Marxist morality. {para} ``To ensure that the party's basic line will remain unchanged for 100 years, this congress will elevate a batch of younger cadres in accordance with the principle of choosing those with both ability and political integrity, good education and professional proficiency.'' {para} Meanwhile, while talking to Hongkong reporters yesterday, Mr Chen Yuan, a vice-president of the People's Bank of China, claimed his father was not a conservative. {para} ``From the very beginning he [Chen Yun] advocated retaining a considerable amount of market forces in the economy. He did not want to entirely adopt the Soviet model.'' {para} Mr Chen said his father, who is nearly 90 years of age, could no longer have a clear understanding of concrete policy issues. {para} He added his father's health was generally good and his aides regularly read out papers for the conservative patriarch. {/article}

{headline} Deng loses chance at knockout blow {byline} By WILLY WO-LAP LAM {article} PATRIARCH Mr Deng Xiaoping could have delivered a knockout blow to the feudal bureaucratic system that has shackled the productivity and freedom of his countrymen for a millennium. {para} However, as Mr Deng's likely last party congress opens in Beijing today, intellectuals in the capital say the New Helmsman has missed his final opportunity. {para} This is, of course, not to belittle the immense achievement Mr Deng has made in imposing a ``reform consensus'' on the highest echelons of the Chinese Communist Party (CCP). {para} Market reforms having been enshrined in the Political Report to the 14th Party Congress, there will be no closing of the door that Mr Deng opened in late 1978. {para} The pity is that, with the army and the regional leaders solidly behind him, Mr Deng could have done much more for the nation. {para} While the chief architect of reform pulled out all the stops to promote the integration of the Chinese economy with that of the capitalistic world, he has done as much to preserve the CCP's stranglehold on power. {para} Political reform has been frozen despite Mr Deng's realisation that the global trend towards democratisation and ``people power'' is irreversible. {para} It is doubly disturbing that in spite of his commitment to maintaining the achievements of the 13th Party Congress in 1987, the patriarch has presided over a country that has moved backwards. {para} The brainchild of both Mr Deng and former general secretary Mr Zhao Ziyang, the 13th Congress has gone down in history as the high point of Chinese-style glasnost and perestroika. {para} Among other things, it enshrined the principle of the separation of party and government, to be attained through the gradual paring down of the authority of party organs in both government and business. {para} The 13th Congress also hinted that the CCP might allow a higher degree of ``inner-party democracy'', meaning cadres and members would have more leeway in expressing individual opinions. {para} Thirdly, the conclave conceded that the people had ``the right to know'', and that the veil of secrecy that shrouded policy deliberations must be shattered. {para} Five years later, Mr Deng has abandoned all these ideals. {para} In his remarkable speech to Shenzhen cadres last January, Mr Deng said with reference to the experience of the former Soviet Union, that a socialist country must have a well-developed economy to gain the support of the people. {para} What the patriarch did not mention was that he was committed to maintaining the party's supremacy through military means if necessary. {para} The Political Report to be presented to the Congress today indicates party cells will be strengthened in units including government departments, factories and schools. {para} In an oblique reference to the ``crimes'' committed by Mr Zhao, the manifesto warns against ``activities that split the party'', implying the CCP will remain a Maoist ``chamber of one voice''. {para} According to well-placed sources, senior party and government appointments that will be announced between the 14th Congress and the National People's Congress (NPC) next spring will bear out the ``new'' goal of the fusion of party and government. {para} Mr Jiang Zemin, who is likely to retain his positions of Party Chief and Chairman of the Central Military Commission, may be appointed State President at the NPC next April. {para} Member of the politburo Standing Committee, Mr Qiao Shi, may get the extra position of NPC Chairman. {para} The overlapping of the functions and personnel of party and government is ominous because, in his more liberal days, Mr Deng himself warned against the dangers of ``the party minding over everything''. {para} Equally disquieting is the fact that, to shore up his own power, Mr Deng has elevated several of his cronies and personal aides to top positions. {para} The role of three heavyweight members of the new politburo, Generals Liu Huaqing and Yang Baibing as well as Mr Ding Guan'gen, is, to use General Yang's words, to ``protect the emperor and provide an escort for his voyage''. {para} Reports from Beijing say two Deng loyalists may be inducted into the Central Committee Secretariat. {para} They are Qingdao Mayor Mr Yu Zhengsheng, a classmate of Mr Deng's eldest son; and the Director of the Deng Xiaoping Office, General Wang Ruilin. {para} In addition, the Deng Office and the five Deng children are expected to wield more power after the Congress. {/article}

{article} PATRIARCH Mr Deng Xiaoping is putting the final touches to a reshuffle of the regional and local level military commands. {para} It follows the announcement on Monday of a new line-up for the Central Military Commission and new designated chiefs of the departments of General Staff, Logistics and Political Work. They are respectively General Zhang Wannian, General Fu Quanyu and General Yu Yongbo. {para} Sources close to the military said commanders and political commissars of the seven military regions as well as smaller districts below them would be reshuffled. {para} The personnel change will reflect Mr Deng's desire for elevating professional officers who are in tune with the requirements of a strong army as well as a ``socialist market economy''. {para} The patriarch is also anxious to flush out proteges of President Mr Yang Shangkun and Chief Political Commissar General Yang Baibing. Many of the proteges were promoted in the three years after the June 4, 1989, crackdown. {para} The last large-scale reshuffle of the regional commands, which took place in mid-1990, was orchestrated by General Yang. {para} Analysts said the head of the Deng Xiaoping Office, General Wang Ruilin, who retained his seat on the party Central Committee, would play a similar role. {para} The patriarch would also take the advice of CMC Vice-Chairmen General Liu Huaqing and General Zhang Zhen. {para} ``Wang has advised Deng on key personnel moves since the early 1980s,'' a military source said. {para} ``For example, in 1987, Wang recommended that [General] Chi Haotin, then Political Commissar of the Jinan Military Region, be promoted Chief of General Staff.'' {para} At the same time, many of the Yangs' cronies at headquarters level are expected to retire shortly. {para} They include the Vice-Chief of General Staff, General Xu Xin. {para} - WILLY WO-LAP LAM {/article}

{headline} Opinions divided in Chinese press {byline} From GEOFFREY CROTHALL in Beijing {article} CHINA's spin doctors yesterday pronounced judgement on the first United States presidential debate and, just as in the US, opinions were divided. {para} The Shanghai-based Wen Hui Bao newspaper claimed Mr Bush was the big loser in Sunday's debate with Democratic candidate Mr Clinton. {para} Its local rival the Liberation Daily gave the debate to Texas billionaire Mr Perot, who it said had the most ``realistic'' economic plan for the United States. {para} The conservative Beijing-based Guangming Daily was more impartial, declining to make a definitive judgement on who won but appearing to side with the President simply because of his more accommodating policies toward China. {para} The Wen Hui Bao was perhaps the most forthright in its judgement, claiming that Mr Clinton was the ``clear winner''. Under a banner headline saying ``Bush fails to score'', it predicted that unless the President made a dramatic improvement in the forthcoming debates he would be a sure loser in the election on November 3. {para} ``Bush currently trails Clinton by 18 points in the polls. Unless he can narrow that gap to 10 per cent by the end of the third debate [on Monday], many experts here say he could have already lost the election,'' the newspaper said. {para} It described Mr Bush's performance as dull and uninspiring, suggesting that he had been ``pacified'' by having to deal with Mr Perot as well as Mr Clinton. {para} The Arkansas Governor on the other hand was portrayed as being full of life and passion and responding vigorously to the President's attacks on his character. {para} The newspaper described Mr Perot's presence at the debate simply as an ``interesting diversion'' for the American public but said he was not a real contender in the race for the White House. {para} The Liberation Daily on the other hand praised Mr Perot, saying his radical plan to cut the federal budget deficit had been endorsed by many American economists and was perhaps the only real option if the US was to solve its economic woes. {para} The plan would involve considerable sacrifice for the American people and as such it would be ``political suicide'' for either Mr Bush or Mr Clinton to propose it, the Liberation Daily said. But Mr Perot, being outside mainstream politics, had nothing to lose. {para} The Guangming Daily, without specifically endorsing the President, suggested he was the better candidate because of his persistent support for the unconditional renewal of China's Most Favoured Nation trading status. {para} ``Bush pointed out that Clinton's philosophy of isolating China was an enormous mistake,'' it said. {/article}

{headline} Officials set to promote openness {article} TWO new faces have been appointed as official spokesmen for the forthcoming 14th Congress of the Chinese Communist Party, it was reported yesterday. {para} They are the Vice-Chief of Propaganda, Mr Liu Zhongde, and the Vice-Minister of Foreign Affairs, Mr Liu Huaqiu. {para} Mr Liu Zhongde is believed to be close to Premier Mr Li Peng, and Mr Liu Huaqiu is the Foreign Ministry's leading expert on the United States. {para} The two will handle questions from the Hongkong and overseas press, in the process projecting an atmosphere of toumingdu, or ``transparency''. {para} According to a report in the pro-Beijing Wen Wei Po yesterday, the authorities have asked mainland reporters to reflect a four-point theme: ``Emancipating the mind, raising the spirit, boosting confidence and unifying [the party].'' {para} ``[Reporters] should demonstrate the spirit of `openness' in their report of the congress,'' the daily said. {para} Foreign journalists will be allowed to cover the opening and closing sessions as well as special press conferences arranged in between. {para} Party General Secretary Mr Jiang Zemin, who will almost certainly be re-elected to his post, will meet the press immediately after the congress closes on about October 20. {para} There will, however, be certain restrictions. Sources in the capital said non-Chinese journalists would be barred from internal discussion sessions. {para} In contrast, the foreign press is allowed to sit in on comparable meetings during the National People's Congress. {para} Moreover, in answering press questions, the two spokesmen and other senior officials will toe a ``unified line''. {para} Only senior Communist Party members from among mainland journalists will be allowed to cover the congress. {/article}

{headline} Advisory body to be disbanded {byline} From GEOFFREY CROTHALL in Beijing and WILLY WO-LAP LAM {article} THE Central Advisory Commission of the Communist Party will be disbanded during the 14th Party Congress, according to spokesman Mr Liu Zhongde. {para} ``An important part of the Central Advisory Commission's report to the 14th congress is a suggestion and recommendation that the commission be abolished,'' Mr Liu said at a press conference yesterday. {para} ``According to this recommendation and proposal, relevant and corresponding revisions will be made to the party's constitution.'' {para} The commission's chairman, conservative elder Mr Chen Yun is believed to be undergoing medical treatment at Shanghai's Huashan Hospital. {para} Chinese sources said it was proposed in the summer that a much smaller, informal group called an advisory committee be set up to replace the commission, a largely conservative body which has held up reforms advocated by Mr Deng Xiaoping. {para} President Mr Yang Shangkun was tipped to become head of the committee. {para} However, to give the new leadership a free hand, the Central Committee last week decided not to replace the commission. {para} The sources said the decision meant that if Mr Yang decided to stick to an earlier decision to resign from all his party and government positions, the political heavyweight would be left without an office. {para} The extent to which Mr Deng has overcome opposition to his reforms was further indicated yesterday by the appointment of one of his chief lieutenants, Mr Qiao Shi, as congress secretary-general. {para} Three other liberal or moderate officials, the former party secretary of Tibet, Mr Hu Jintao, United Front chief Mr Ding Guan'gen and the head of the Central Committee General Office, Mr Wen Jiabao, were appointed as deputy secretary- generals. {para} All three men are expected to be promoted to the politburo during the congress. {para} Mr Liu said the congress would be guided by Mr Deng's theories on building socialism with Chinese characteristics and that it would sum up the experiences of the past 14 years of reform. {para} ``Deng Xiaoping's important remarks during his tour of southern China early this year have made an important ideological and theoretical contribution to the preparations for the convocation of the congress,'' he said. {para} ``Deng Xiaoping is the chief architect of China's socialist reform. His theories on building socialism with Chinese characteristics have opened up the only correct path for China's modernisation and development.'' {para} Many observers expect that the party's constitution will be amended to include Mr Deng's theories as one of its basic canons. {para} Mr Liu refused to comment yesterday on the status of former party chief Mr Zhao Ziyang, saying only that Mr Zhao was not a delegate to the congress. {/article}

{headline} Jiang's key report aims to reach compromise {byline} From JOHN KOHUT in Beijing {article} WHILE endorsing the general thrust of Mr Deng Xiaoping's economic reform programme, Communist Party leader Mr Jiang Zemin yesterday added several notes of caution in his keynote address opening the party's national congress. {para} Analysts interpreted the document as a compromise between conservatives and reformists, showing the latter had not been able to get their way entirely in the current political struggle. {para} ``We should proceed from actual conditions, keep development within the limits of our capabilities and maintain an overall balance,'' Mr Jiang said. {para} ``In our efforts to speed up economic growth, we should avoid the mistakes of the past,'' he said, referring to the boom and bust cycles, such as the one since the last party congress five years ago, which have characterised the economy. {para} ``We should not rush headlong into action, neglecting economic results, vying with each other in pursuit of a higher growth rate and seeking only increased output value, new construction projects and expanded capital construction. {para} ``We should do solid work, proceeding boldly but prudently and making concerted efforts to accomplish a few major tasks that will pave the way for faster growth and better economic results in future,'' he said. {para} As expected, Mr Jiang called for economic expansion of eight or nine per cent annually through to the end of this decade, higher than the six per cent stipulated in the current five-year plan before Mr Deng relaunched his economic reform programme last January, but less than the 10 per cent Mr Deng is said to have advocated. {para} Mr Jiang spoke in favour of using pricing and competition to decide the priority for distributing productive resources to enterprises, ``so that the efficient ones will prosper and the inefficient one will be eliminated'', of resorting to free markets to decide economic issues, of reforming China's irrational pricing system and of other economic reforms. {para} ``It is therefore necessary to proceed more rapidly with that reform, in accordance with the tolerance of the different sectors of society, straightening out price relations and establishing a system in which most prices are determined by market forces,'' he said. {para} He also called for opening up new regions to foreigners, in particular, along borders, the Yangtze River and in the interior of the country. {para} Guangdong and other coastal areas should open up so that they can ``basically achieve the goal of modernisation in 20 years'', he said. {para} Yet, for all the talk of reform, analysts saw the speech as a compromise between liberals and conservatives. {para} They felt Mr Jiang was more conservative in his address yesterday than he was when delivering a speech to the Central Party School in early June. {para} ``We did not see one side being overwhelmed by the other,'' said one diplomat. ``Reformists are not getting their own way completely . . . there is still some resistance.'' {para} Another said he was struck by the heavy ideological content of what was expected to be a speech mainly about economic reform. {para} The need to fight bourgeois-liberalism was mentioned, while Mr Jiang made it clear there would be no change in the political structure. {para} The furthest he went on political reform was a reference to simplifying administration, a task which should be completed ``basically within three years''. {para} ``You can find something to eat for everybody,'' another diplomat said. ``There are a lot of reformists who want to go faster, who want to be bolder.'' {para} Some observers felt that while the most liberal of reformists got less than they wanted, Mr Jiang's speech reflected Mr Deng's policy of opening up the economy while keeping tight controls on politics. {para} ``It's a middle of the road policy, and that is typically Deng Xiaoping,'' said one analyst. {/article}

{headline} Top cadres quit Central Committee {byline} By DANIEL KWAN in Beijing and WILLY WO-LAP LAM {article} EIGHT senior cadres have offered to resign as the 1,989 delegates to the 14th Party Congress yesterday cast their votes during first-round balloting for the new Central Committee. {para} Communist Party sources said a few well-known leftists were dumped during the elections, where candidates outnumbered the actual number of seats by about five per cent. {para} The eight who took themselves out of the running for the Central Committee were President Mr Yang Shangkun, 85; Defence Minister General Qin Jiwei, 78; National People's Congress (NPC) Chairman Mr Wan Li, 76; organisation chief Mr Song Ping, 75; Vice-Premier Mr Yao Yilin, 75; Vice-Premier Mr Wu Xueqian, 71; Beijing party secretary Mr Li Ximing, 66; and Sichuan party chief Mr Yang Rudai, 66. {para} Since Central Committee membership is a prerequisite for a senior post in both the party and government, the eight have, in effect, also tendered their resignation from all other major positions, including membership in the politburo. {para} However, Mr Yang, General Qin, Mr Yao and Mr Wu will likely keep their state and government positions until the NPC convenes next March. {para} Mr Yao, Mr Song, and Mr Li are classified by Western diplomats as either Maoist ideologues or central planners. {para} The sources said during balloting yesterday afternoon, a few Maoists who had been criticised by patriarch Mr Deng Xiaoping for sabotaging reform were eliminated. {para} They included leaders of ideological, propaganda and cultural departments. {para} However, the sources said there was a possibility leftists already eliminated might still have a chance during the second, and final, ballot tomorrow, when the congress closes. {para} A source said yesterday: ``The results of the balloting today will be referred to the presidium of the congress, which will put together a final short-list for Sunday. {para} ``It is possible the presidium might reinstate candidates spurned by the delegates. The final vote will be a formality as the number of candidates will be the same as the number of seats on the new Central Committee.'' {para} Yesterday, the delegates also engaged in preliminary voting for alternate members of the Central Committee as well as members of the Central Commission for Disciplinary Inspection. {para} Meanwhile, well-placed cadres in Beijing said the Cultural Ministry would soon be revamped. {para} Acting Minister Mr He Jingzhi, who will likely lose his Central Committee seat, will step down in favour of vice-chief of propaganda Mr Liu Zhongde. {para} A well-known Maoist, Mr He is suffering from cancer. {para} Mr Liu, who is likely to be inducted into the Central Committee, will have his position confirmed during the next NPC. {para} An indication of Mr He's imminent fall is that his protege, the party secretary of the Chinese Dramatists' Association, Zhao Xun, was recently put under investigation for alleged ``economic crime'' and breach of party discipline. {para} Other followers of Mr He, who were promoted soon after the Tiananmen Square crackdown to leading positions in the Chinese Writers' Association and the Federation of Literary and Art Circles, will also be replaced later this year. {para} Sources in the ministry said there was a good chance the moderate Vice-Minister Mr Gao Zhanxiang would be promoted to be party secretary of Tianjin. {para} The incumbent, Mr Tan Shaowen, is a candidate for the politburo, whose new lineup will be announced on Monday. {para} The sources said Mr Gao's place would be taken by the son of President Yang, Yang Shaoming, a career photographer and adviser to many quasi-official foreign-affairs organisations. {/article}

{headline} Warning over Western ideas {article} PRESIDENT Mr Yang Shangkun has warned against the misguided and ``inappropriate'' introduction of capitalistic mechanisms into the economy. {para} Meanwhile, the president of the People's Bank of China, Mr Li Guixian, has vowed China will not privatise its economy in spite of its commitment to a ``socialist market economy''. {para} Speaking yesterday to army delegates to the 14th party congress, Mr Yang said while patriarch Mr Deng Xiaoping had said China could adopt the ``useful things of capitalism'', ``sometimes we have used [capitalistic mechanisms] improperly''. {para} Citing the ``storm'' in Shenzhen in August, a reference to the rioting that broke out over the sale of share certificates, Mr Yang said China had not solved the problem of how to develop a securities market. {para} He indicated that was why Beijing had decided that experiments with stock exchanges would be restricted to Shenzhen and Shanghai. {para} The President added he was personally against the setting up of gambling facilities. {para} ``We must be discriminating when we introduce [things from the West],'' he said. ``Such a category [as gambling] should not be brought in.'' {para} Mr Yang also deplored certain undesirable practices in the thriving real estate market. {para} ``Some places have sold plots of land to foreign companies,'' he said. ``However, these companies have failed to develop them three or five years [after their acquisition]. They are just waiting for the land to appreciate.'' {para} Meanwhile, in a talk to delegates from Liaoning province, central banker Mr Li disputed assumptions held by Western economists that China would privatise its economy in order to pursue market reforms. {para} ``While we want to shatter the high degree of planning, we do not want privatisation,'' Mr Li said. ``Our system of public ownership will not change. {para} ``We want to synthesise the good points of a planned economy with those of a market economy. It will not do to totally negate the planned economy just because [the goal of the] market economy has been raised.'' {para} Mr Li's conservative views, however, seemed to have been challenged by the party secretary of Liaoning, Mr Quan Shuren. {para} Calling on party members to ``change their mentality'', Mr Quan said the party must ``transform the practices and customs of the planned economy of the past to those of a market economy''. {para} - WILLY WO-LAP LAM {/article}

{headline} Authorities try to gag intellectuals {article} IN a bid to silence public dissent, the authorities have warned liberal intellectuals not to accept interviews from Hongkong and other foreign reporters during the 14th party congress. {para} For example, Mr Wang Ruishui, the former editor- in-chief of the People's Daily, was told it would be a violation of government discipline if he talked to foreign journalists. {para} Since Mr Wang has officially retired from the government-funded newspaper, the restriction was seen as an attempt by the authorities to silence their critics. {para} Analysts said the authorities were anxious to paint a picture of unity and this was evident in the fact that liberal economists who had the same views as the leadership were allowed to express their opinions. {para} -DANIEL KWAN {/article}

{headline} `Nothing new' in report {byline} From KENT CHEN in Taipei {article} A SENIOR Taiwan official in charge of mainland policy yesterday said the political report to be adopted at the 14th congress of the Chinese Communist Party offered no new initiatives on the issue of re-unification. {para} Dr Ma Ying-jeou, vice-chairman of the cabinet level Mainland Affairs Council, said some of the proposals, such as negotiations to end hostility across the Taiwan Strait, were put forward as early as 1989. {para} He insisted that although negotiations would be inevitable, they should not be conducted between the CCP and the Kuomintang, because in Taiwan only the Government could represent the people. {para} Dr Ma proposed that the two sides should proceed with the peace talks at a government-to-government level. {para} On domestic development on the mainland, Dr Ma predicted that economic development would continue after the 14th congress, to open in Beijing on Monday. {para} ``In the past decade, we have seen drastic changes taking place on the mainland. Five years ago, we could not imagine there would be stock exchanges on the mainland and the editorials of the People's Daily talking about the commodity economy,'' he said. {para} ``We believe that after the 14th congress, the mainland will continue the current policy of opening to the west and internal reform,'' he added. {para} But he predicted that the situation of fast-track economic development coupled with slow-paced political reform could not last long. {/article}

{headline} Major cuts planned for ministries {byline} By WILLY WO-LAP LAM {article} MAJOR government ministries and departments will be trimmed after the forthcoming 14th congress of the Chinese Communist Party. {para} Personnel in such powerful units as the State Planning Commission and the Ministry of Foreign Economic Relations and Trade (Mofert) could be slashed by up to 80 per cent, according to sources in the capital. {para} And a number of economic-related units, including the Commerce Ministry and the State Administration for Industry and Commerce, may be abolished altogether. {para} The Political Report to be presented to the congress next week indicates the task of ``the reform of [governmental] structure, abolishing sinecures and simplifying administration'' should be finished in three years. {para} Many of the functions of existing ministries, especially those dealing with the economy, will be replaced by corporations that are financially self-sufficient. {para} Moreover, a modern civil service system will be set up where rules for recruitment, promotion and retirement will follow international norms. {para} Chinese sources have denied recent speculation that Mofert will be abolished. {para} But they said that its staff would be drastically cut, and most of its functions taken over by existing or newly set up trade corporations. {para} ``The slimmed-down Mofert will only handle issues like China's relations with GATT and other international bodies, as well as liaison with foreign governments over matters including tax and tariffs'', a source said. {para} ``As more and more companies are being granted autonomy in import and export, many functions of Mofert have become superfluous''. {para} In a dispatch yesterday, the China News Service (CNS) reported that the Commerce Ministry, in charge of the circulation of products, had formed several new companies this year. {para} ``After setting up these economic entities, the number of departments and bureaus within the ministry has been drastically cut'', CNS said. {para} ``The remaining units are changing their functions - from distributing [products] according to plan to adjustments and controls, providing services, and management''. {para} Chinese sources said the entire ministry would probably be closed down in the next year or two. {para} The sources added, however, that reformists in the party faced immense difficulties in streamlining government structures and in chopping away dead wood. {para} While reformist or business-minded officials are eager to leave government to exploit opportunities in the market place, more conservative ones fear their ``iron rice bowl'' will be broken. {para} Even reformist leaders are worried that it may be difficult for Beijing to exercise control over the new corporations. {para} Most of these want to be converted into stock companies, meaning the management will be responsible to their shareholders rather than to the state. {para} Analysts said the Political Report to the congress did not spell out any plans for administrative restructuring in the provinces and localities, where resistance to reform could be even more serious. {/article}

{headline} Universities fall short of students {byline} By DANIEL KWAN {article} TWO of China's most prestigious universities, Beijing University and Fudan University in Shanghai, have for the first time failed to recruit enough first year students. {para} According to the semi-official Hongkong China News Agency (HKCNA), Chinese high school graduates have shunned these two prestigious schools because they want to stay away from the compulsory military training programmes required. {para} ``The situation has caused great shock among the community at the Beijing University,'' the dispatch said. {para} The military programmes were introduced after the 1989 military crackdown, as the authorities tightened their grip on university students blamed for stirring up the ``turmoil''. {para} Quoting from information supplied by Beijing University, HKCNA said the university had at least 60 vacancies after the conclusion of its recruitment drive. {para} The gap was even greater in major cities such as Beijing, Shanghai and Tianjin, and their vacancies were partly filled by students from poorer provinces and cities. {para} In order to meet its recruitment target, the dispatch said Beijing University was forced to lower its entry requirements. {para} ``The shortfall has greatly affected the quality of students . . . it [Beijing University] had to lower its admission score from 30 to 50 above the average to almost the same level of other universities,'' it said. {para} The report said most parents felt that compulsory military training had lowered education standards. ``Moreover, they saw no practical gains in any way, except that the military programme would be counted as a year of working experience for their children,'' the dispatch said. {/article}

{headline} Vote system to guarantee election {article} THE Chinese Communist Party has adopted a voting mechanism to avoid the embarrassment of a nominee to a high office being voted down by the 1,989 delegates to the 14th Congress. {para} The pro-Beijing Wen Wei Po yesterday reported that two days ahead of the final elections on Sunday, , pre-elections would be held to select the new full and alternate members of the Central Committee and the members of the Central Commission for Disciplinary Inspection (CCDI). {para} According to the report, a ``differential voting system'' - where candidates outnumber the number of seats available - will be adopted for the pre-elections. {para} The report said the party would nominate at least nine per cent more candidates in the election for alternate members of the Central Committee but the percentage would be lowered to five per cent in the elections for full members of the Central Committee and the CCDI. {para} While the delegates would be able to indicate their preferences in the pre- elections, they would be deprived of such freedom during formal voting on Sunday, when the congress is adjoined. {para} According to the Wen Wei Po report, delegates would have no choice in the final elections meaning they would be required to endorse all candidates nominated by the party in the final elections. {para} Results of the final voting are expected to be kept confidential. {para} It is believed the scheme is designed to avoid any embarrassment for leaders who may fail to get elected. {para} Differential elections of the Central Committee and the CCDI members were first introduced at the 13th Party Congress of 1987. {/article}

{headline} Chongqing's growth target `attainable' {article} THE party boss of Chongqing, Mr Xiao Yang, has defended the ``high- speed growth'' model his city is following on the grounds that it is ``practical and attainable''. {para} Mr Xiao, 63, a protege of deposed party chief Mr Zhao Ziyang, is a candidate for promotion to the politburo during the 14th Party Congress. {para} In an interview with the New China News Agency, Mr Xiao, who was trained in East Germany, said: ``We cannot judge whether the economy of a certain place is overheated just by looking at the figures. {para} ``What is important is whether the growth rate tallies with reality. If the target can be achieved, one should not put artificial limits on it.'' {para} Mr Xiao said Chongqing, a business centre in Sichuan province, had the requisite conditions for fast take-off due to the investments in infrastructure which the municipal government had undertaken in the past decade. {para} Meanwhile, in a small-group discussion among delegates, the former governor of Guangdong, Mr Ye Xuanping, said he was pleased that the Political Report to the congress had made more than 40 references to the need to ``speed up'' economic reform and development. {para} ``We have been craving for these two words for many years, and now they have been talked about openly,'' he said. {para} Mr Ye, who is a well-known reformist, said ``old and new taboos'' must be shattered if they did not meet the new requirements set forth by the Political Report. {para} The former governor also indicated it was wrong for the critics of Guangdong to label its officials ``rightists'', a code word for ``bourgeois liberalisation''. {/article}

{headline} Wealth gap to grow: official main head page 1 {headline} Gap between rich and poor to grow: Guangdong chief {byline} From GEOFFREY CROTHALL in Beijing and agencies {article} THE gap between China's prosperous coast and impoverished heartland will grow in spite of new government policies designed to develop the country's hinterland, the Communist Party boss of China's richest province predicted yesterday. {para} ``In the course of economic development, some regions will get rich first and this will continue in the future,'' Guangdong party secretary Mr Xie Fei said. {para} ``As such, the gap between the rich and poor regions will increase.'' {para} Mr Xie was speaking at a press conference where his counterparts in Shanghai and Shandong province, Mr Wu Bangguo and Mr Jiang Chunyun, also spoke. {para} The three are expected to be inducted into the powerful politburo when the 14th party congress closes on Sunday. {para} Mr Xie, 60, said the growing regional disparity was a ``very real problem'' but stressed his province would continue full steam ahead in its drive to become even wealthier. {para} The Guangdong economy is expected to grow by more than 20 per cent this year, and local statisticians said there would be no let up of this pace in 1993. {para} Urban residents of Guangdong already have an average income approaching 3,000 yuan (HK$4,240), seven times higher than in the rural areas of inland provinces such as Gansu where the average income is about 400 yuan a year. {para} But Mr Xie insisted Guangdong should not be considered a truly wealthy region and repeated his government's pledge to turn the province into Asia's fifth ``Little Dragon''. {para} This would be done, he said, by further developing the province's market economy, enterprise reform and communications and infrastructure development. {para} The central Government's policy of ``multi-directional reform'', which is designed to help develop the inland provinces by opening them up to foreign investment, would actually be of benefit to Guangdong, Mr Xie said. {para} For example, in the six months since the Government introduced multi-directional reform, foreign investment in Guangdong had significantly increased and would continue to do so, he said. {para} Total foreign investment in Guangdong last year was US$2.5 billion (HK$19.32 billion), but had already reached US$3.1 billion in the first nine months of this year. {para} ``By developing the whole country and boosting the market place, this will provide good opportunities for Guangdong and help us develop further,'' Mr Xie said. {para} The party secretaries of Shanghai and Shandong seconded Mr Xie's views on the desirability of the ``high-speed growth model'', which was advocated by patriarch Mr Deng Xiaoping during his tour of Guangdong early this year. {para} Shandong's Mr Jiang, 62, said his province planned to grow at up to 12 per cent annually and its gross output of goods and services would double between 1994 and 2000. {para} By 2010, he said, Shandong's output would be at ``the level of the middle-developed countries in the world''. {para} The three party leaders acknowledged that the country's fast-paced reforms were causing some social unrest, but they stressed the situation was manageable. {para} Mr Wu, 51, indicated that the millions of Chinese being put out of work as the country modernises bloated, inefficient industries might pose a threat to stability. {para} ``Since we introduced some of the reform measures with regard to the labour system and the optimisation of the labour force, some people have been excluded, and they constitute a destabilising factor,'' Mr Wu said. {para} He said officials ``have taken a very cautious and positive attitude to solve this problem'', but provided no further details. {para} Mr Jiang said social stability had ``changed dramatically'' since early 1989, when the country was rocked by the pro-democracy movement. {para} He claimed most students now believed the movement was wrong, although a small number of them might disagree. {para} ``The students have reflected and rethought about the June 4 event, and they have realised that that movement was wrong, because it was detrimental to the country, and the people have come to such a realisation,'' he said. {para} The three rising stars in Chinese politics skirted questions on whether they would be promoted to the politburo. {para} ``The question of [who is joining] the politburo will have to be decided during meetings of the central authorities'', Mr Wu said. {para} ``Recently, there has been a lot of rumours and speculation overseas'', Mr Xie said. ``They do not mean much to me''. {/article}

{headline} Identity crisis for son of president {article} EVEN the son of President Mr Yang Shangkun can be mistaken for a nobody at a time when as many as 2,000 delegates are gathering in the Chinese capital for the 14th Party Congress. {para} Yang Shaoming, who is president of China's Society of Contemporary Photography, was stopped from taking pictures of Hongkong reporters outside the Great Hall of the People. {para} Officially, the junior Yang is a deputy director of the Central Party Literature Research Centre. {para} A family photographer of senior leader Mr Deng Xiaoping, the ``princeling'', in his 40s, is also the appointed photographer of the congress. {para} However, when he was trying to take pictures of Hongkong reporters, who were coming out of the Great Hall of the People after a press conference, he was stopped by security guards, who at one stage seemed prepared to take him away. {para} The junior Yang was seen on television being pushed by security guards. {para} Without disclosing his identify, he shouted to the guards: ``You don't understand the impact of the party congress overseas. You don't understand its political implication.'' {para} It was not until Hongkong reporters told the security guards the identity of the junior Yang that they were aware they had offended the ``princeling''. {para} One of the security guards later patted Yang's shoulder to apologise for obstructing him. {para} Many past congresses were conducted in secrecy. This one easily rates as the most heavily reported news event of the year in China's official media. {para} - KENT CHEN {/article}

{headline} General facing a threat to his power {article} PATRIARCH Mr Deng Xiaoping has manoeuvred to counterbalance the predominance of the so-called Yang faction in the Army by promoting officers more oriented towards modernisation and professionalism. {para} Military analysts in Beijing said the influence of the ``professionals'' had been strengthened at the expense of the ideologically inclined commissars, as represented by the Chief Political Commissar General Yang Baibing. {para} In the first three years after June 1989, General Yang, backed by his half-brother, President Mr Yang Shangkun, had expanded his power base by promoting ideological education among senior officers. {para} General Yang, who is also the Secretary-General of the policy-setting Central Military Commission (CMC), has also installed his proteges in key positions. {para} Since Mr Deng's trip to southern China in January, General Yang has sought to boost his power by coining the apparently pro-reformist slogan ``to protect the emperor and provide an escort for his voyage''. {para} At a secret commission meeting in late April, he was promised the CMC vice-chairmanship later this year. {para} However, sources in Beijing said that the ``professionals'' led by another CMC vice-chairman, General Liu Huaqing, who is tipped to join the politburo Standing Committee, were trying to block General Yang's rise. {para} If they were successful, the commissar might be unsuccessful in his bid for the CMC vice-chairmanship and a ``professional'' elevated in his place, the sources said. {para} An indication of General Yang's troubles is that army delegates to the 14th congress have failed to mention the ``protecting the emperor'' slogan. {para} But Western military experts say he remains a force to be reckoned with. {para} The commissar, who will probably be made a politburo member on Monday, was successful in nominating his protege, General Yu Yongbo, as his successor as Chief Political Commissar. {para} - WILLY WO-LAP LAM {/article}

{headline} No exoneration for Zhao {byline} By WILLY WO-LAP LAM {article} PATRIARCH Mr Deng Xiaoping has decided not to exonerate Mr Zhao Ziyang for fear that overturning the verdict on the ousted party chief will cause instability and threaten economic reform. {para} The ninth plenary session of the Communist Party Central Committee yesterday decided to uphold the decision of the fourth plenum of June 24, 1989, which accused Mr Zhao of supporting the 1989 ``turmoil'' and splitting the party. {para} However, the former party boss will be allowed to keep his party membership and no criminal proceedings will be launched against him. {para} In a terse communique, the plenum, which ended in Beijing yesterday, said it upheld the politburo's report ``on the further examination and investigation of the mistakes made by comrade Zhao Ziyang during the political turmoil in 1989''. {para} The communique said that the Central Committee endorsed the fourth plenum decision, and that ``the examination and investigation'' relating to Mr Zhao would be ended. {para} At the fourth plenum, which replaced Mr Zhao with Mr Jiang Zemin, the Central Committee said: ``Zhao Ziyang made the mistake of supporting the turmoil and splitting the party and he had unshirkable responsibilities for the shaping-up of the turmoil. {para} ``The nature and consequences of his mistakes are very serious,'' it said. {para} Sources close to the Central Committee said the decision not to exonerate, let alone rehabilitate, Mr Zhao, was made by Mr Deng. {para} Moreover, both the Deng Xiaoping faction and the conservative wing agreed that exonerating Mr Zhao might further split the party and jeopardise stability. {para} This is despite the fact that investigations into Mr Zhao's ``crimes'' by a team led by the late party elder Mr Wang Renzhong, which effectively ended in late 1990, failed to unearth any evidence linking Mr Zhao to the ``black hands'' behind the 1989 movement. {para} The sources said Mr Deng also gave instructions that the ``Zhao question'' not be put on the agenda of the upcoming 14th party congress, and that the 1,989 delegates should not mention Mr Zhao's name during small-group discussions. {para} ``In spite of the lack of incriminating evidence, Deng knows clearing Zhao's name means the verdict on the 1989 democracy movement will have to be reversed,'' a veteran cadre said. {para} Citing an internal party report, the cadre added that during a secret meeting with North Korean leader Mr Kim Il-sung last year, the patriarch had said: ``With Jiang [Zemin] as party boss, I feel at ease. If Zhao were in charge, I'd feel uneasy.'' {para} ``Deng is reviving many of the economic reform programmes first proposed by Zhao, his former protege,'' said another Chinese source. {para} ``If Zhao is cleared of his `guilt', the former party chief should be running the country, not Deng.'' {para} He added that many liberal leaders also believed exonerating Mr Zhao could ignite another round of the democracy movement - and that economic reform would be endangered. {para} Mr Zhao has repeatedly rejected Mr Deng's suggestion that he be given an honorary position in return for a ``full confession of guilt''. {para} The only consolation for Mr Zhao, who turns 73 next week, is that Mr Deng shot down suggestions by hard-liners, including Prime Minister Mr Li Peng, that criminal proceedings be brought against him. {para} Moreover, the former party chief still draws his full salary. {para} He lives in a large house in central Beijing, which is being watched over by a detachment of Ministry of State Security agents stationed in an adjacent building. {para} The disgraced leader cannot leave Beijing but is allowed to play golf or go fishing on the approval of ministry cadres. {/article}

{headline} Top planner warns Xinjiang {article} CHINA'S master-planner has warned the country's northwest provinces not to compete with coastal provinces for the same markets but to explore opportunities in central Asia and the Commonwealth of Independent States (CIS). {para} Vice-premier and head of the State Planning Commission, Mr Zou Jiahua, told economic planners in Urumqi of Xinjiang Autonomous Region that instead of looking to the east, the provinces should aim for markets in the north and northwest. {para} The comments, reported by the New China News Agency, highlight the contradiction between China's prosperous coastal provinces and their impoverished inland neighbours. {para} Conservative planners have criticised the fact that capitalist-style reform has led to an economic gap between the coast and the hinterland. {para} But according to Mr Zou, the gap could be bridged by tapping the huge market in Central Asia and the CIS which have an insatiable demand for Chinese goods. {para} Instead of expecting extra incentives from central Government, Mr Zou said the northwest provinces should make use of their preferential policies. {para} He also urged planners to capitalise on the current reform drive initiated by patriarch Mr Deng Xiaoping and take measures to spur their economies. {para} However, he warned that in the pursuit of prosperity, state planners should pay attention to economic efficiency too. {byline} - DANIEL KWAN {/article}

{headline} Protester sent to mental hospital {byline} From JOHN KOHUT in Beijing and WILLY WO-LAP LAM {article} BEIJING has committed a man who staged a lone protest to commemorate the third anniversary of the Beijing massacre to a hospital for the mentally ill, sources said. {para} And the authorities are still holding up the application by dissident journalist Zhang Weiguo to go to the United States. {para} Wang Wanxing, 43, an unemployed man who had served two prison terms in the late 1970s on political charges, was taken to the mental institute about 90 kilometres outside Beijing after being arrested in Tiananmen Square on June 3. {para} He was seized by police within seconds of unfurling a banner at the foot of the Monument to the People's Heroes criticising patriarch Mr Deng Xiaoping for his appointment of top leaders. {para} In a letter dated July 14 and addressed to world leaders, including UN Secretary- General Mr Boutros Boutros-Ghali, US President Mr George Bush and British Prime Minister Mr John Major, Mr Wang asks for international help to get him out of his predicament. {para} The letter calls for justice and for salvation from this ``human hell''. Mr Wang says he does not suffer from mental illness, but rather is being punished for unfurling the banner. {para} His wife was asked last month to sign a letter declaring her husband was mentally ill. When she refused, an official told her that the decision to commit him to a mental institute would be carried out with or without her consent. {para} She later signed the letter, but added a line to it stating he had not suffered from mental illness before his most recent arrest. {para} Because Mr Wang was unemployed, he has no work unit to cover hospital costs. His wife has been forced to pay 1,000 yuan (HK$1,422) to cover hospital expenses, the sources said. {para} He is being given medicine. And the authorities have not made it clear how long they intend to keep him at the institute. {para} In his banner Mr Wang also asked Mr Deng for 10,000 yuan in compensation for the suffering he incurred after expressing his political views, the first time in 1976, when he wrote a letter to Mao Zedong calling for the rehabilitation of Mr Deng, in political disgrace at the time. {para} Meanwhile, in Shanghai yesterday, dissident journalist Zhang Weiguo held talks with local public security officials on his planned visit to the US to take up a fellowship at the University of California. {para} Zhang's friends said the police were still dragging their feet on when they would abrogate his status of ``taking bail to await trial'', without which the journalist could not apply for a passport. {para} Yesterday, the officers quizzed Zhang in detail over who would underwrite his expenses abroad and who had pulled strings to find the fellowship for him. {para} Zhang was also asked to give an account of the foreigners he had met in the past two months. {para} Another Shanghai-based dissident, bio-chemist professor Wen Yuankai, however, was given a passport last week to enable him to take up a fellowship at the California Institute of Technology. {/article}

{headline} US in arms talks appeal {byline} From MICHAEL CHUGANI in Washington {article} THE United States has urged China to rejoin Middle East arms control talks which Beijing boycotted to retaliate against outgoing US president Mr George Bush's approval of warplane sales to Taiwan. {para} Washington's new appeal to Beijing comes amid press reports that China had been on the verge of selling a nuclear research reactor to Iran but scrapped the deal under pressure from the US. {para} The State Department's top spokesman Mr Richard Boucher was quizzed about the nuclear sale and the status of the Middle East arms control talks during his daily press briefing. {para} In a written statement, the State Department said about the Chinese boycott of the arms control talks: ``We hope that China, a significant arms exporter and permanent member of the United Nations Security Council, will reconsider its position.'' {para} The statement said the US was now consulting Britain, France and Russia about the next steps of the arms control talks following China's pullout. {para} Mr Bush had called for the arms control talks among the five permanent members of the Security Council after the Gulf War. {para} In reply to another question, the State Department said China was keeping its promise to abide by international arms control treaties. {para} Beijing had under pressure from the US, agreed to sign the nuclear non-proliferation treaty and abide by the guidelines of the Missile Control Technology Regime (MTCR). {para} ``The US believes that China is meeting its non-proliferation treaty commitments and adheres to the MTCR guidelines,'' the State Department said. {/article}

{headline} Family in bid to free Zhao aide {byline} By WILLY WO-LAP LAM {article} THE family of Bao Tong, the jailed aide to ousted party chief Mr Zhao Ziyang, is lobbying the authorities to release him on the technicality of ``bail to seek medical treatment''. {para} And Bao, who passed his 60th birthday in the Qincheng maximum security prison last Thursday, has said he does not regret his actions. {para} The family members, who are only allowed visiting rights once every two months, got permission at the last minute to see Bao on his birthday. {para} ``Bao Tong looks reasonably good,'' a relative said. ``A medical test he recently underwent indicated his health was normal.'' {para} However, he added, Bao was still suffering from a chronic stomach ailment. {para} The relative said the Bao family was lobbying senior officials for ``bail'' to be granted on November 28, when the former head of the Research Office for Political Reform would have served half his seven-year sentence. {para} While official judicial proceedings against Bao did not begin until this spring, the former secretary of Mr Zhao had been arrested in late May 1989. {para} A source close to the Bao family said they had at least temporarily given up on a further appeal or petition for his release. {para} ``In contravention of the criminal code, Qincheng authorities have ruled that if Bao were to lodge a petition, he would not be able to see his family,'' the source said. {para} He added there were many precedents of Beijing granting ``bail'' to political prisoners after they had served half their jail terms. {para} According to the relative, Bao was in a relatively cheerful mood when he met his wife, daughter, and three other relatives in the guest- room of Qincheng. However, a guard sat in on the meeting, which lasted more than an hour. {para} Bao requested from his relatives a large number of books, including such ancient texts as Strategies of the Warring States. {para} ``I have no worries, no regrets, and no white hair,'' Bao said, apparently referring to his decision to stick by Mr Zhao in the crucial weeks before the June 4, 1989, crackdown. {para} Family members said the former member of the Central Committee seemed to have kept abreast of latest events, including the 14th party congress. {para} Kept in solitary confinement in Qincheng, Bao is allowed to take a bath at a communal facility once or twice a week. {para} Informed sources said the decision on whether the sentence of Bao might be commuted depended on China's relations with the West, particularly the United States. {para} ``The [Communist] Party may decide to shorten the sentences of Bao Tong and other dissidents just before [President-elect Mr Bill] Clinton decides whether to renew Most Favoured Nation status in mid-1993,'' a source said. {para} The jail terms of such well-known dissidents as Wang Dan and Wei Jingsheng are coming to an end in one to two years. {para} The source said Beijing could reap immense public relations benefits through a token act of magnanimity such as setting them free early next year. {/article}

{headline} Drivers given deadline to belt up or face fine {byline} From GEOFFREY CROTHALL in Beijing {article} By the middle of next year, Chinese drivers will have a choice, either belt up or pay a five yuan (HK$6.95) fine. {para} Two decades after Western countries first introduced seat belt regulations, China yesterday decreed that all cars should be fitted with front seat belts by the end of June 1993 and that drivers and front-seat passengers be required to use them. {para} Passenger vehicles without seat belts fitted by that date would not be allowed on the roads and drivers who did not buckle up would be subject to a warning or five yuan fine, the Public Security Ministry announced yesterday. {para} The new regulations were being promulgated in response to the rapid increase in the number of vehicles on China's roads and the increasingly high speeds of those vehicles, the head of the ministry's traffic administration office, Mr Zhang Zhengchang, was quoted as saying in yesterday's Legal Daily. {para} The number of accidents had increased dramatically over the past decade, with more than 50,000 deaths and 170,000 serious injuries occurring last year, Mr Zhang said. {para} The compulsory wearing of seat belts would significantly help reduce the number of fatalities and injuries resulting from collisions. {para} However, many drivers doubted that the new regulations would be strictly enforced. {para} ``With a maximum fine of five yuan, most drivers are not going to bother wearing a seat belt,'' a Beijing taxi driver said. {para} ``Besides, most traffic cops are too busy just keeping the traffic moving.'' {para} However, the ministry does seem determined to make sure every car is fitted with seat belts, even if there is no guarantee drivers and passengers will actually wear them. {para} All cars have to be examined by government test centres once a year and those without seat belts will not be deemed road-worthy. {para} The regulations apply not only to passenger cars, but to jeeps, minivans and small trucks, vehicles not usually fitted with seat belts and which, in many cases, will require a considerable feat of engineering to get them installed. {para} The cost of having seat belts fitted in a small passenger car such as the popular Tianjin Daihatsu is about 1,000 yuan, while for jeeps and minivans, which are not really designed to accommodate belts, the cost could be double, drivers say. {/article}

{headline} Town to mark Mao's birthday {byline} From KENT CHEN in Shenzhen {article} THE hometown of the late chairman Mao Zedong will launch a series of activities next year to commemorate the 100th birthday of the Great Helmsman. {para} Mao, who led the Chinese Communist Party to victory in 1949, was born in Shaoshan, a small township in the city of Xiangtan in Hunan province, in 1893. {para} Hundreds of thousands of Red Guards made their pilgrimage to the birthplace of the helmsman during the Cultural Revolution, but officials today want tourists who can help stimulate the local economy. {para} Speaking in Shenzhen yesterday, vice-mayor of Xiangtan Mr Zhang Hanliang admitted the district had been accorded special status because it was Mao's birthplace. {para} ``But today, the erstwhile `special political zone', is just like any other city, striving for economic development,'' Mr Zhang said. {para} ``Next year will be the 100th birthday of Mao Zedong. Shaoshan is stepping up the construction of scenic spots, a martyr's park, and memorials and shrines with inscriptions featuring Mao Zedong's poems,'' he said. {para} Existing attractions include Mao's former residence and the Mao Zedong Museum. {para} As part of next year's commemorative activities, a six-metre bronze statue will be erected in front of the museum. {para} Apart from Mao, Xiangtan, billed as a ``spiritual land harbouring prominent heroes'', also gave birth to several renowned Chinese personalities, including the late army leader General Peng Dehuai and master painter Qi Baishi. {para} To further promote tourism, the municipal government is inviting mainland and foreign investment in several infrastructure projects in Shaoshan. {para} A 17-square-kilometre plot covering four villages is set for development into a multi-function holiday resort, with hotels, playgrounds, shopping arcades, a cultural village and a sanatorium. {/article}

{article} VETERAN naval officer General Li Jing has been made a vice-chief of the General Staff of the Army. {para} A much-decorated career officer, General Li, 62, is a protege of the vice-chairman of the Central Military Commission, General Liu Huaqing. {para} A native of Shandong province, General Li's previous postings include deputy commander of the Navy and commander of the Naval Air Force. And the head of military intelligence, General Xiong Guangkai, has been made an assistant chief of the General Staff. {para} Generals Li and Xiong are keen exponents of the modernisation of weaponry. {/article}

{headline} Patriarch gives support to Jiang {byline} By WILLY WO-LAP LAM {article} AILING patriarch Mr Deng Xiaoping has promised to shore up the authority of party General Secretary Mr Jiang Zemin in the remaining years of his life. {para} In a meeting with Mr Jiang soon after the 14th party congress, Mr Deng said he would use whatever resources and energy he had to ensure his protege remained the ``core'' of the leadership. {para} ``What more can I do for you in the next few years?'' Mr Deng, believed to be suffering from prostate cancer, reportedly told Mr Jiang. {para} While the party chief was not effusive in his demands, the patriarch indicated that Mr Jiang, who is also Chairman of the Central Military Commission, would have more say over personnel matters. {para} Large-scale reshuffles in the party, government and army are taking place in the wake of the congress. {para} Speaking in a half-jovial manner, Mr Deng reportedly also asked Mr Jiang to help ``take care of the children'' when he was no longer around. {para} The patriarch indicated he felt sad about the fate that had befallen the late Chairman Mao Zedong's offspring. {para} Political sources in Beijing said that while the patriarch had more than once fumed about Mr Jiang's failure to push fast-paced reform, he had decided nonetheless to pass the baton to the former Shanghai party chief. {para} It is Mr Deng who insisted that in addition to his party and army positions, Mr Jiang would take over the state presidency from Mr Yang Shangkun next April. {para} ``Deng has accepted Jiang's explanation that whatever lapses he is guilty of were due to `interference' from such leftist elders as Chen Yun and Li Xiannian,'' a Chinese source said. {para} ``Now that Li is dead and Chen has sworn his allegiance to the Deng line, the patriarch feels Jiang can again be trusted.'' {para} The source added that Mr Deng was fully aware of Mr Jiang's mediocrity and lack of vision. {para} However, just because of this, Mr Jiang was acceptable to most factions in the Communist Party, and Mr Deng saw in his protege an obedient and safe cadre who could hold together the nation in the transition period after his death. {para} At the same time, Mr Deng has given authority to another of his proteges, the dynamic Vice-Premier Mr Zhu Rongji, to implement radical market reforms. {para} ``Jiang's portfolio is defensive, just to ensure the party is not overwhelmed by either factional strife or challenges posed by `bourgeois liberals','' an Asian diplomat said. {para} ``Zhu's role, that of pushing the reforms, is offensive in nature. But because of Zhu's unpopularity, he cannot become the `core' of the leadership.'' {para} Analysts in Beijing, however, have reservations about whether Mr Jiang can broaden his power base, even given Mr Deng's new assurance of support. {para} Unlike other politburo heavyweights such as Mr Qiao Shi, the party chief does not have a body of subordinates who have been promoted to key positions. {para} One of his closest proteges, the vice-chief of the General Office of the Central Committee, Mr Zeng Qinghong, failed in his bid to be elected to the Central Committee at the 14th party congress. {/article}

{headline} Commodity scam hits mainland {byline} By ALAN BOYD and LINDA CHOY {article} MAINLAND Chinese firms are being milked of millions of dollars by commodity traders through an elaborate network of blackmail and bribery. {para} Operating through underground subsidiaries in Shenzhen, dealers target poorly-paid senior managers in state enterprises using such lures as a high-class prostitution ring and illegal backdoor payments. {para} Four firms registered in Hongkong are known to be canvassing funds for investment in commodity futures in Shenzhen - a violation of Chinese regulations prohibiting speculative trading. {para} Their activities are the latest indication that Chinese authorities are losing control of the illicit movement of funds out of the country, which itself points to a widening problem with commercial crime. {para} ``Most of the investors are attracted because they have too much money and there are few investment opportunities,'' admitted a senior official at the People's Bank of China, which monitors the Shenzhen financial community. {para} ``We are aware of the surge of illegal futures investment activities in Shenzhen.'' {para} Commodity traders have been operating in Guangdong province for some time, but fraud directed at state-run firms has only begun to surface recently. {para} In an unrelated case, four ``illegal investment firms'', which used schoolchildren to sell forex, gold bullion and commodity futures, were shut down in Guangzhou earlier this year. {para} One of the companies was alleged to have had links with a Hongkong group. {para} The Guangdong authorities also disclosed in September that police had identified more than 100 white- collar criminals known to be exploiting affluent Chinese in Shenzhen through fly-by- night investment and currency schemes. {para} An employee of a Hongkong commodities firm active in Shenzhen said traders were playing on the inexperience of state employees and economic uncertainties in China. {para} ``The first step to attract customers in China is by telling them that we are going to open our own futures market there, but because of some procedural problem, the plan is held up and `let's invest in other countries' futures markets first','' he said. {para} Some state funds are believed to have been diverted without authority to the Hongkong securities market, with managers later being informed it has been lost during futures trading. {para} Financial regulators in Hongkong are investigating the activities of at least one company, but are powerless to act unless local commodity regulations are breached. {para} The Shenzhen firms trade under different names from their Hongkong parents and have no official links. They mostly use expatriate staff, especially Singaporeans, who work independently. {para} Chinese authorities are trying to improve liaison with Hongkong on commercial crime, but are hampered by investigators' unfamiliarity with the problem. {para} ``In many cases, even the public security people who are charged with investigations don't really know what the laws are, and what the specific provisions of laws are. They don't have that kind of legal training,'' said Hongkong University lecturer Mr Don Lewis. {para} The Shanghai Metal Exchange will launch China's first regulated commodities market later this year, but in the meantime, illegal trading is expected to flourish. {para} A senior official with Shenzhen's Government Economic System Reform Committee said the problem was an unavoidable side-effect of China's open- door policy. {para} ``The fact that Chinese people have become richer and there is a lack of investment opportunity here has given foreigners a chance to come and cheat,'' he said. {para} ``Trading coffee'' leaves a bitter taste - Page 5 {/article}

{headline} Shenzhen forex scam leaves mainland companies with investment problems {headline} `Trading coffee' means big losses are brewing {article} IN market parlance, the seemingly innocuous words ``trading coffee'' can trigger a nightmarish sequence of illegal transactions that are used to cheat scores of futures investors in Hongkong and China. {para} The threat of a deliberate, rapid-fire destruction of commodity margins is held against both staff and client, and has enabled a small number of unscrupulous firms to defraud large mainland Chinese enterprises. {para} Traders operating in Shenzhen single out managers of regional level for speculative investments in commodities listed on Hongkong markets, appealing to their low wages in comparison with Hongkong employees. {para} In one operation, senior staff are offered a percentage of the profits if they invest their firm's money. {para} ``I deal with the decision- makers of [mainland] corporations in Hongkong. If a China director is approached, I would say `we have an investment opportunity', but he won't be interested until he is offered something himself,'' said one dealer with experience in China. {para} ``Afterwards I will tell his company they made less and give [the difference] to him instead.'' {para} Amounts averaging $300,000 to $500,000 have been handed over to one commodity firm with an office in Shenzhen, with some investments ranging as high as $800,000. {para} After several apparently legitimate transactions, reaping profits of five to 10 per cent, the remaining money is ``burned'', or traded off rapidly to accumulate commissions. {para} When the managers object, they are confronted with documentary evidence of the transaction. Chinese regulations provide for stiff jail terms or even the death penalty for serious fraud. {para} ``There is a double deception here. He's looking at his own tombstone, he will be the victim of both parties,'' the trader said. {para} Another company operates a prostitution ring aimed at the same group of managers with authority to handle large funds. The specially-chosen women are used as bait for investments and - if necessary - blackmail. {para} A second commodities dealer said: ``They don't care how they get it, you can sell your body or steal to get an account.'' {para} Similar methods are used to gain control over staff. Employees who answer advertisements, offering jobs with such inflated titles as ``marketing director'' and ``investment consultant'', are encouraged to make limited personal investments of their own in the firm. {para} They are also urged to bring friends and relatives into the market, creating a financial bond between the three tiers of investment. Problems start when either the client or account manager tries to pull out. {para} ``When clients want their money back, they hold on to it. They say it is still in progress and they may keep it for weeks so they can use it somewhere else,'' said an employee of a commodities firm. {para} ``If you try to leave yourself, they say, `OK, you can go, but not without a great loss'.'' {para} Account managers are later told their own investment and that of their client has been ``traded in coffee'' - shorthand for a heavy market loss. {para} The firm's directors will already have manoeuvred the lowly-paid account managers right out of the picture by a mixture of fraud and manipulation. {para} One company's chain of command is intentionally so complex that it can take days to work through the layers of management structure to find the immediate superior responsible for returning the money. {para} Employees effectively lose control of their clients' market positions within days of signing them on. Senior directors trade their money on the market without authorisation - or simply pocket it. {para} ``I found out one of my accounts was being traded and they signed the trading [authorisation] themselves. It was already settled, they said `now you can read it','' said one account manager. {/article}

{headline} Inexperienced capitalists prove easy prey in SEZs {article} LIKE carpetbaggers of another era, opportunists are descending in force on China's special economic zones, drawn by the lure of quick profits in a vulnerable and poorly regulated business environment. {para} In Shenzhen, economic hothouse for the nationwide market reforms, novice homegrown capitalists are easy prey for the slick investment advisers and middlemen working out of Hongkong. {para} ``My boss said because of the big potential market in China, you don't think about $10,000 or even $20,000. In China, you can earn 10 or 20 times this,'' said an employee of one commodities firm operating in the city. {para} Dealers operate out of modern offices and expensive hotel suites, creating an aura of respectability that impresses unwitting mainland businessmen. {para} They evade arrest by continually changing addresses or arranging protective partnerships with well- placed communist cadres and security officials. {para} The China News Service warned recently that Chinese enriched by the Special Economic Zone (SEZ) boom, were being caught by ``high-interest investments'', ``commodity exchanges'' and ``information consulting services''. {para} ``Currency speculation is being used more and more as bait for other illegal financial scams. These speculation dens then siphon customers' investments into their own accounts or into Hongkong,'' it reported. {para} Economic crimes began to re-emerge in China at the end of the Cultural Revolution, and reached endemic levels in 1988, forcing Beijing to launch an anti-corruption drive. {para} In one of the most widely publicised cases, two business managers were accused of approving illicit personal bank loans of five million yuan and 4.1 million yuan respectively in Shenzhen. {para} More than 90,000 cases of economic crime were uncovered throughout China in the first six months of this year, with Guangdong and Fujian - site of the key SEZs - responsible for half of the revenue recovered by investigators. {para} Futures trading, involving foreign exchange, gold and commodities transactions, has only just begun to emerge as a problem, following the closure of four illegal firms in Guangzhou. {para} The cases pointed to a deeper problem of the loss of control over illegal movement of foreign currency out of the country. {para} Investigators involved in the Guangzhou raids found that ``the clients' money was not invested; instead, it was deposited in secret accounts and could be misappropriated at any time'', the Hongkong China News Agency said. {para} The lack of high-yield investment outlets for mainland businessmen flush with cash who seek a hedge against China's political uncertainty has prompted a huge foreign exchange exodus. {para} Fund managers in Hongkong say at least US$3 billion to US$5 billion (about HK$23 billion to HK$39 billion) in mainland money, much of it belonging to government enterprises, is illegally finding its way each year into property in the United States, Europe and Hongkong or offshore tax havens. {para} Chinese caught investing in Hongkong markets without prior approval can face severe consequences. {para} A five-year jail term applies for foreign exchange violations, with the death penalty for the theft of 50,000 yuan. Speculation involving 10,000 yuan to 200,000 yuan in profits brings a maximum sentence of 10 years. {para} ``When you couple the penalty provisions on foreign exchange control with the criminal code provisions and the regulations on bribery and corruption, these people could be looking at capital punishment,'' said Mr Don Lewis, a lecturer at the University of Hongkong. {para} Beijing has tried to soak up some of the excess SEZ funds through legalised stock exchanges and has approved two investment funds in Shenzhen to buy into the securities market. {para} In July, the Shenzhen authorities were granted autonomy over economic laws in a bid to suppress growing abuses of the system, which led to 11,000 arrests of government officials following a single internal inquiry. {para} During the next three years, 84 economic laws will be progressively introduced, mostly modelled on existing legislation in Hongkong. {para} At the same time, China's Central Government has tightened credit for local companies operating in Shenzhen in a bid to retain control over the movement of money. {para} Monitoring of foreign companies is also being stepped up, with a special police department established in Guangdong to improve co-operation between Hongkong and China. {para} Shenzhen handled 206 economic disputes last year involving Hongkong, Taiwan and Macau residents, but the absence of an extradition treaty is hampering efforts to rein in organised syndicates. {para} Criminals manage to keep one step ahead of Shenzhen's poorly-equipped security agencies by resorting to ever more sophisticated methods - and a few old ones. {para} Some Guangdong syndicates used ``the bait of money or female charm'' to involve members of the security forces in economic crimes, the People's Daily reported. {para} State-owned firms are becoming adept at covering up losses from illegal foreign exchange dealings and fraud. {para} The Commercial Bank of China found 11 billion yuan in hidden losses during a survey of 10,000 government businesses last year. {/article}

{headline} West accused of Cold War {headline} Diplomats warn of hostile turn in policies {byline} By WILLY WO-LAP LAM {article} THE Beijing leadership is studying ways to counter what it calls a new ``anti- Chinese'' containment policy imposed by the West. {para} The Chinese media, including the left-wing press in Hongkong, has quoted top cadres and diplomats as issuing warnings against a hostile turn in the China policy of Western countries, specially the United States. {para} Yesterday, a ``senior communist Chinese figure'' was quoted as saying that the Western world had begun a new Cold War against China. {para} ``Looking at the international situation, it cannot be said that the Cold War has ended,'' the senior leader said. {para} ``On the one hand, China's diplomacy should be based on the principle of `observe [the world] cool-headedly; consolidate our position; respond calmly; and avoid taking the lead'. On the other, China must strive to do something.'' {para} The senior leader pointed out that the Cold War, at least so far as relations between China and the West are concerned, had not ended. {para} ``The Cold War between the East and West [Blocs] may have ended,'' he said. ``Yet the Cold War waged by Western countries against the Third World has begun. In particular, economic pressure [exerted on the Third World] is very severe. {para} ``Under such conditions, our foreign policy should be based on doing something concrete in addition to the 16-character goal [of making cool-headed observation and never taking the lead].'' {para} An informed source said the senior leader was none other than patriarch Mr Deng Xiaoping, who remained the country's highest authority on foreign policy. {para} The source said the 16-character policy was laid down by Mr Deng when the former East Bloc started crumbling in 1990. {para} However, since the summer, the patriarch and his advisers, including Foreign Minister Mr Qian Qichen, had perceived a hostile turn in the China policy of Western nations. {para} ``Deng is afraid that with the `Soviet threat' gone, the West no longer needs to seek China's help in counter-balancing the influence of Moscow,'' the source said. {para} ``Moreover, the patriarch thinks the West is using Taiwan, Hongkong, and human rights issues to block China's advance.'' {para} In internal speeches, senior cadres have decried the decision by Washington and Paris to sell fighter jets to Taiwan. {para} Alleged attempts by Hongkong Governor Mr Chris Patten to breach the Joint Declaration have also been cited as part of the ``conspiracy of the West''. {para} Chinese sources said under Mr Deng's guidance, Chinese diplomats had mapped out plans to ``do something concrete''. {para} These included exploiting ``contradictions'' within the Western world, for example, trade and other frictions between the US and Europe, and between the US and Japan. {para} For example, Beijing could use its US$300 billion (HK$2,320 billion) import programme for the 1991-95 period to award Western countries that refuse to join in the ``anti-Chinese containment effort''. {para} China is also playing the Russian and the Japanese cards against Washington. {para} Relations with Tokyo have improved after the visit of the emperor, and ties with Moscow are in for a leap forward upon the visit of President Mr Boris Yeltsin next month. {/article}

{headline} Migrant workers flood capital {byline} By DEDE NICKERSON {article} MIGRANT workers are flocking to Beijing in search of money, and the floating population in the nation capital, estimated to be more than one million, is continuing to grow. {para} The largest of the provincial groups living in Beijing comes from the coastal province of Zhejiang. Residents of the so-called ``Zhejiang Village'' in southern Beijing believed there were between 200,000 and 300,000 people from their province living in the capital on a temporary basis. {para} Much of this population consists of young people between the ages of 13 and 17 who have left school in an effort to make money and raise the standard of living of their families when they return home. {para} These young workers hardly see the light of day as they spend most of their time at sewing machines or sleeping in the same small rooms in which they labour. {para} One 12-year-old girl who was looking after her two-year-old niece and working with her 15-year-old brother said: ``Of course we miss our home, but we need to make some money.'' {para} She had dropped out of school last year to move to Beijing with her two older brothers, sister-in-law and niece. {para} The five lived in a dirty, one-room apartment and shared one bed. The room also served as their work space. Their four sewing machines were kept busy making clothing labels. {para} Most of the adolescents who come to work as well as the small children who join their parents cannot go to school in Beijing as they do not have a residency permit. {para} But the children of people running the small sweatshop operations are more fortunate in some cases. {para} ``My parents pay 500 yuan [HK$694] a year and I can attend school here in Beijing,'' said an eight-year- old boy who came from Hangzhou, Zhejiang's provincial capital. {para} His parents have a small shop in the village which produces leather jackets for stores in Xidan and Wangfujing, two of the largest shopping areas in downtown Beijing. Most of the young workers who produce the clothing do not see the stores in which it is sold. {para} ``We simply work and sleep. I have never seen the Forbidden City or the Summer Palace and probably never will. I am here to earn money and after I do, I will go back,'' said a 17-year-old female worker. {para} ``At home I made 150 yuan per month working as a store clerk, here I will make almost 600 yuan per month,'' she said. {para} But she said she was not sure exactly how much she would earn as many of the workers didn't get their full salary until the end of the year and the salary depended on how much of what they produced was actually sold. {para} Some of the migrants stay on for quite some time and manage to obtain temporary residence permits making their stay in Beijing legal. {para} ``I have been here for five years and earn over 1,000 yuan per month. Although it is legal for me to be here and I am earning a good salary, I miss my three children who are at home,'' said Mr Zhao Ling who manages a small group of workers who produce leather jackets. {/article}

{headline} MFN worry if Clinton wins {byline} From GEOFFREY CROTHALL in Beijing {article} THE Chinese Government has expressed ``serious concern'' at the possibility of United States Democratic presidential nominee Mr Bill Clinton being elected to the White House in November. {para} ``There is a very real fear now that, should Clinton be elected, China's Most Favoured Nation [MFN] status will be lost, or at the very least be made conditional on human rights improvements,'' a well placed Chinese source said. {para} Concern over a possible Democratic election victory has been heightened in the last two weeks by the departure from the presidential race of independent candidate Mr Ross Perot and Mr Clinton's sudden surge in the polls which gives him a 2-to-1 lead over US President Mr George Bush. {para} The Government has commissioned two studies looking into how best to counter the perceived threat to Sino-US relations posed by a Democratic incumbent, focusing on the issue of MFN, the source said. {para} The studies recommend China launch a major diplomatic offensive in the event of a Clinton victory designed to emphasise MFN has been the ``cornerstone'' of the Sino-US relationship for 15 years and that any attempt to change that relationship would be extremely damaging. {para} The message will be that revocation of MFN will set Sino-US relations back decades and may cause great harm to US business interests. {para} ``Everyone knows the US economy is in very bad shape so the loss of US export earnings and jobs caused by the revocation of MFN will be a major part of the strategy,'' the source said. {para} Other sources familiar with the studies say in addition to advocating scare tactics over MFN, the reports recommend offering an olive branch to Mr Clinton in the hope he will soften his line against Beijing. {para} ``One study recommends that China state its willingness to discuss all problems in a co-operative and conciliatory manner and to stress the importance it attaches to good relations with the US,'' one source said. {para} ``It is important to show that we are willing to co-operate as much as possible with the US and not give Clinton any excuse for taking unilateral action against the mainland.'' {para} However, the sources admit it will be a struggle to win Mr Clinton over to China's point of view. {para} Mr Clinton's comment during his acceptance speech at the Democratic convention in New York that the US needed a government that ``does not coddle tyrants from Baghdad to Beijing'', has convinced many Chinese officials he will be a tough customer to deal with. {para} ``President Bush is perceived as an old friend of China, Mr Clinton clearly is not,'' one source said. {/article}

{headline} Inquiry launched into copter crash {byline} From GEOFFREY CROTHALL in Beijing {article} THE Chinese military has launched a detailed investigation into why one of its helicopters crashed into a crowd of spectators during a commercial leaflet drop killing 33 people and seriously injuring 46. {para} The investigation will focus not only on the cause of last Thursday's crash in Yuanyang county, Henan province, but also why the M-17 helicopter had been hired out to a cosmetics company for a promotional air display in the first place. {para} Officials from the Henan provincial government, which is also conducting an investigation, say it is too early to determine the exact cause of the crash. Initial reports say the helicopter was flying far too low in a built-up area. {para} Eyewitnesses described the helicopter hovering at little more than 30 metres above the ground before the crash, the Shanghai based Wen Hui Bao newspaper reported yesterday. {para} People on the ground could clearly see passengers in the helicopter waving to them, it said. {para} The helicopter had been hired by the Harbin Friendship Cosmetics Factory, in the northeastern province of Heilongjiang, and the local Yellow River Department Store to stage a leaflet drop near the retailer. {para} After two high passes, during which electronic watches and towels were dropped along with advertising flyers on the crowd, the helicopter came in much lower for its third run. As it was turning from east to south the helicopter's tail struck the top of the department store, the Wen Hui Bao said. {para} The helicopter broke into two sections and fell ``like a giant locust'' to the ground where it burst into flames. {para} About 10 people were killed instantly. Others died or sustained serious injuries after countless explosions ripped through the panic-ridden crowd at the foot of the building, the newspaper said. {para} Several others, who had been standing on top of the department store, were decapitated by the helicopter's rear rotary blades after the tail broke off, it said. {para} The crash has once again raised serious questions over China's air safety record, particularly for aircraft operated by small independent companies. {para} All four crashes to be reported this year involved aircraft owned by non-state run companies. {para} Last week's crash in Yuanyang was the first this year to involve a military aircraft that had been commercially hired. {para} Analysts say the military investigation may end with the recommendation that tighter restrictions be imposed on the commercial use of military aircraft. {/article}

{headline} University lecturer of law arrested {article} A BEIJING University law lecturer has reportedly been arrested for alleged involvement in underground political organisations. {para} The lecturer, Wang Tiancheng, was reportedly detained on November 2 by police. {para} He is said to be a key organiser of the two underground political groups called the ``Young Marxism Party'' and the ``Democratic Freedom Party''. {para} According to a report by the Taipei-based United Daily News yesterday, Wang, who was also an editor of a college legal magazine, was arrested in Beijing. {para} His democratic views were reflected in an article called ``Constitution and Human Rights'' which was printed in the college magazine he published this year. {para} A Hunan native, the 29- year-old lecturer is said to be an ardent admirer of the 18th century French political philosopher Montesquieu who pioneered the political theory of the tripartite division of state power. {para} Quoting sources who knew the professor, the report said Wang had planned to travel to Germany this month as a visiting scholar. {para} Officials at Beijing University said yesterday they had no information on the case. {para} The communist authorities have stepped up their surveillance on intellectuals since this summer. {para} Human rights organisations said both before and after the third anniversary of the Tiananmen Square crackdown, secret police in Beijing and other cities arrested at least a few dozen members of underground rings. {para} - DANIEL KWAN {/article}

{headline} West wooed with promise of profits {byline} By WILLY WO-LAP LAM {article} BEIJING is pursuing a ``dollar diplomacy'' to promote ties with Western countries, especially the United States. {para} Western diplomats said a new breed of Chinese diplomats was trying to win friends by dangling the prospect of multi-billion dollar imports - and of business opportunities that will open up on Beijing's entry into the General Agreement on Tariffs and Trade (GATT). {para} More than three years after the Tiananmen Square massacre, China has failed to restore its relations with the West to pre-June 4, 1989, levels. {para} However, foreign policy- makers are confident the lure of profits will soon consummate Beijing's re-integration to the world community. {para} A key thrust of China's new diplomacy is to remind Western countries, as well as Japan and the rest of Asia, that it is scheduled to import US$300 billion (HK$2,318 billion) worth of goods between 1991 and 1995. {para} In his recent meeting with German Foreign Minister Mr Klaus Kinkel, Prime Minister Mr Li Peng said Beijing would even go beyond the US$300 billion target. {para} Moreover, reformist cadres led by Vice-Premier Mr Zhu Rongji have reiterated Beijing's readiness to scrap tariff barriers in its bid to join GATT by 1993. {para} Mr Zhu has told foreign businessmen and Chinese officials China was willing to accept losses that would be incurred in the wake of the influx of foreign products. {para} Diplomatic analysts said that, especially at a time of recession in the US, Beijing was brandishing the ``economic card'' before Washington. {para} Beijing's first reaction to Mr Bill Clinton winning the US presidential election was to announce the purchase of American wheat. {para} The analysts said that despite the crisis in Sino-American relations precipitated by the sale of F-16 fighters to Taiwan, China was ready to continue sending ``buying delegations'' to America. {para} ``Beijing is telling American diplomats and businessmen that the US will miss out on the commercial action if Washington were to hold on to its `rigid' stance on issues like human rights,'' a Western diplomat said. {para} In a dispatch yesterday, the semi-official Hongkong China News Agency said that in the first quarter of this year, American businesses had invested in 235 new projects in China. {para} Quoting ``businessmen from various quarters'', it said: ``Even though Clinton's China policy is still unclear, from the point of view of the long-term economic interests of the two countries, friendly co-operation and the development of trade dovetail with the interests of the two peoples.'' {para} Sources in China said that in recent directives Foreign Minister Mr Qian Qichen and his deputy, Mr Liu Huaqiu, had asked Chinese embassies abroad to pursue an aggressive economic diplomacy. {para} Meanwhile, in a report yesterday, the Taipei-based United Daily News quoted Mr Qian as lambasting the US for using Taiwan, Hongkong, and Tibet to block China's advance. {para} Washington and some other countries ``will not give up on Taiwan, the `unsinkable aircraft carrier'; they make a big fuss out of Tibet; they block Hongkong's reversion to the motherland; and they create the so-called South China Sea issues'', Mr Qian said. {/article}

{headline} Dissident's wife vanishes after protest {byline} From JOHN KOHUT in Beijing {article} THE homeless wife of a prominent jailed Chinese dissident disappeared yesterday within hours of launching a protest outside a police station in Beijing. {para} Ms Zhang Fengying, the wife of veteran human rights activist Ren Wanding, and her 15-year-old daughter were seen dumping all their possessions in front of the police station in charge of monitoring dissidents in the afternoon. {para} But by mid-evening, both Ms Zhang, 44, and her daughter had disappeared. Friends of hers said they did not know what had happened to the pair. {para} Earlier, Ms Zhang had threatened to camp outside the police station until she was given adequate housing. {para} They arrived at the police office late yesterday afternoon carrying all their possessions and threatened to stay there. {para} Ren's employer, the Beijing City Equipment Installation Company, evicted Ms Zhang and her daughter from their apartment early this year on the grounds that the head of the household was in jail and no longer working for the company. Thus, the company argued, it was not obliged to provide accommodation for the family. {para} In China, most urban dwellers live in housing provided by their work units for a nominal rent. {para} Ms Zhang has moved five times since being evicted. At one point, she was living in a peasant house outside Beijing which police had arranged for her temporarily. {para} Most recently, she had been staying at a friend's house, but those friends returned to their apartment yesterday and Ms Zhang and her daughter had to leave. {para} The authorities offered her a tiny nine-square-metre apartment far from central Beijing for 90 yuan (about HK$125) per month, or about nine times what Ren and Ms Zhang paid for their old apartment. In China, 90 yuan is about half what most workers earn in a month. {para} But Ms Zhang has no income because she has not been able to work since her husband was jailed more than three years ago on counter-revolutionary charges. {para} Penniless, she has relied on friends and family for support. Her daughter, who has not been able to attend school for about a year, has been hurt psychologically by the ordeal. {para} At 4 pm yesterday, Ms Zhang and her daughter arrived at the police station on Bei Chizi, near the police office where all foreign residents have to register, and unloaded bundles, suitcases, bags, a wash basin and a supply of apples. They intended to stay there until police satisfied her demand for suitable housing. {para} An official came out and asked reporters to leave. ``Break it up,'' he said. He then asked Ms Zhang to move to another police office, but she refused saying she could not carry all of her belongings there. {para} ``I want them to give me back my original home,'' Ms Zhang told reporters. ``I think I'll spend the evening here.'' {para} Ms Zhang said she saw her husband yesterday, and his many illnesses were getting worse for lack of proper treatment. Living in a cell with three common criminals at the Beijing No 2 prison, Ren has a cataract in one eye and fears losing his sight. He also has sinus problems and other ailments. {/article}