CHINA: REASSERTING ECONOMIC RETRENCHMENT

Created: 6/15/1989

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Reasserting Economic Retrenchment

eng'* "put endowment of economic reform and call foreffortr to combat inflation in his speech to senior officialsIndicatewill seek to tighten central controls duringfere m -

In Ms first major remarks on the economy since the turmoil began, Li claimed success in slowing inflation earlier this year but said controlling price rises remainsop economic priority. To case inflationary pressure, he called for curbs oa capital construction and conaumeraad stressed the need to shift resources from rapidly growing, locally run enierprUes to key sectors, like energy and transporuiion. InaDed for solving problems In agriculture, particularly rural credit shortages that reportedly haveHc procurement agents lo pay peasants with lOUs instead of

speech wm designed to nndrrscorc continuity wiib che ctjoocsrdc policy coon* Uldtac It* winch emphaalied aaataritr over rcsonn. aod lo lay out the harrUtrten' political agenda. towdia*new ideological and taUo^nruption campaigns. Beijingxpand its coauol of prevkmlr Crcod price, and may ^rnoHan ibe acccw of botoc localo raw maierfaja

Odnc+r, leader* almost certaJnlj rcalirr, hoanrver, thai (he recent tunnoq kas made It more djtacclt fix tbem to case fundamental smnomic imbalances aad reassert central controls. The warning to Odifceao taediarhe Hoc showsetermination to control ctotcJy the rcpoctUg oa the ecooomy this vtarmxr. Wt virtual swnoe oo Cut's economic poticy toward gbc Wert ^uracils that

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