China faces an economic crisis, with a government deficit of more than $6 billion, 20 million people unemployed and 100 million not getting enough to eat, according to a speech reportedly being circulated within the Communist Part.
Analysts here say they consider the statistics in the speech, reported today in the independent Hong Kong newspaper Ming Pao, authentic although they have not been officially confirmed. An analysis of the Chinese economy just completed by foreign experts here concludes that Chinese agricultural production has increased only 0.7 percent annually in the last three years, lagging behind population growth.
"China has a poor economic base. The sabotage done to the state's economy by the Gang of Four cannot be repaired in a short time," Ming Pao quoted Chinese Vice Premier Li Xian-nian as saying in a speech at April's central work conference in Peking.
The speech indicated that China would have to continue to rely on large imports of grain, much of which recently has come from the United States. It also would have to delay some ambitious industrial projects because of their serious drain on government finances, according to the report, from China's senior economic official, party Vice Chairman Chen Yun.
The April work conference met to try to work out a new, more modest economic plan that could be approved by the National People's Congress, China's parliament, which is to convene Monday.
The Chinese Communists have indicated clearly in their official press their desire to husband their resources by shutting down plants that have not been profitable and by delaying or refinancing enterprises involving borrowing abroad, such as a$500 million deal to build several Intercontinental hotels and a Japanese-financed plan for construction of a steel plant near Shanghai.
Ming Pao said the statements were gathered by a reader who recently visited Peking, Shanghai and Canton. The newspaper takes an independent but sympathetic stance toward the Peking government and in the past has disclosed other internal party documents whose authenticity eventually has been confirmed.
A deficit of $6 billion and unemployment of 20 million, compared to other nations with only a fraction of China's population, does not appear large.But Communist officials in the past have prided themselves on operating a debt-free socialist system that provides work for everyone.
In his speech, Li reportedly said that some government departments would have to cut their spending by a third and that more money would be used to increase farm production.
According to the report, the $6 billion government deficit grew out of massive new investments and payments to workers and former disgraced officials over the last two years. These payments included lavish bonuses and rewards to workers, which recent press reports say went to too many people.
They also included a 1977 wage increase for about 60 percent of workers and office staff, back wages to officials who had been purged unjustly and reimbursements to capitalists and others who had property illegally confiscated during the Cultural Revolution and other times when the government was under radical control.
Ming Pao quoted Li as telling the work conference that "China is facing an economic crisis. . . . Food grain is so insufficient that 100 million people in the country have not got enough food."
He reportedly said the monthly grain ration of about 40 pounds is not sufficient for people doing heavy labor with little nonstaple food, like meat and vegetables.
"The people are unsatisfied," he was quoted as saying. "We Communists are even more unsatisfied."
The Ming Pao report did not say if the 20 million unemployment figure referred just to urban areas, with a total population of about 200 million, or to agricultural areas as well, where about 800 million people live. In the past, Chinese officials have not appeared to calculate unemployment in the countryside, since most people receive harvest shares. The official press recently has complained, however, of overabundance of rural labor, leading to such abuses as men pulling plows.
Li was quoted as saying, "There are many graduates from schools to assign to jobs every year. We will have 2 or 3 million more jobless people in 1985 if the economic situation does not improve."
A recent analysis of the economy by foreign experts here says grain and total agricultural production improved last year, but not enough to make up substantially for disastrous years in 1976 and 1977.
The figures, based on partial Chinese statistics and conversations with Chinese officials, say total food production dropped by 1.5 percent in 1976, then increased by 1 percent in 1977 and 2.5 percent in 1978. Grain production did better, but poor production of oils, meat and other non-grain foods pulled down the total figure.
The New China News Agency reported today that peasant income, not counting private plots, rose 13 percent in 1978. Analysts said the report seemed designed to bolster the view of Vice Premier Deng Xiaoping that paying peasants more for grain will increase their bank accounts and give the government more money for needed investment than it would get if it accumulated capital through virtual confiscation of grain.