China's much-promoted major industrial reforms have reached a state of near deadlock, according to official press reports published here today.
It is now two years since China's State Council issued regulations aimed at decentralizing economic power and expanding the decision-making powers of industrial enterprises.
But an article published today in the official Peking Review said many factory directors complain that "some powers were withdrawn as soon as they were given out."
"Many factories that seemed on the verge of new life once again slacked off," it said. "The directors of some large and medium-sized enterprises are burning up with anger and anxiety. They want back their decision-making powers."
The director of an electronics factory in Peking is quoted as saying, "To break the current deadlock in urban economic reform, there must be a breakthrough in giving enterprises more powers."
The rural reforms introduced by senior leader Deng Xiaoping have raised production and living standards in much of the countryside. But the more recently introduced urban and industrial reforms have encountered strong resistance from bureaucrats and Communist Party cadres who fear a loss of power and privileges.
"They see their fiefdoms being reduced," said a western diplomat.
From Deng's point of view, the reforms are the key to making China an advanced industrialized nation. Previously, almost all decisions were made by the central government. The reformers have been trying to give factories more autonomy and make them more responsible for their own profits and losses.
But according to reports published in today's People's Daily, middle-level bureaucrats and party cadres have been attacking reformist factory managers through "unreasonable investigations" and bringing false charges against them.
They have apparently exerted new controls over factories by creating administrative bureaus to supervise them.
The People's Daily said that in one case jealous superiors tried to grab all the profits created by a particularly successful and reform-minded vehicle factory director in Zhengzhou. He was fired, but reinstated a few days ago.
In articles published over the past few weeks, the People's Daily and other official papers have reported that many factory managers have been frustrated in their attempts to exercise the right they supposedly enjoy to market their products and to hire and fire workers.
The Economic Daily reported recently that the autonomy that supposedly belongs to factories is often taken back by the administrative bureaus that local governments superimpose on the factories.
These bureaus intercept raw materials allocated by the state to the factories and sell them to the factories at elevated prices. They also try to assume a monopoly over the marketing of some of the factories' most popular products. They force efficient enterprises to buy products from less-efficient enterprises under their protection.
The Peking Review quoted Zou Ruqing, director of a chemical factory in Shandong province, as saying that in theory enterprises have the power to do many things.
"But when it comes to reality, all the overseers come along, leaving enterprises with little power in the end," Zou said.
He said that to reflect the principle of distributing wages according to one's work, his factory decided to increase the rewards for good performance, but the administrative bureau over his factory insisted that the matter had to have their approval.
The authorities have considered the matter for two years, Zou said, but it remains unresolved.
The official New China News Agency reported recently that an economist who interviewed more than 100 enterprise leaders concluded that what they need most is political backing.
Feng Yuzhong, president of northeast China's Liaoning University, said his interviews showed that many reformers felt vulnerable to attack from "orthodox forces" because they are often not supported by their leaders when they are in trouble.
Official press reports indicated that some factory directors have been attacked or ousted from their jobs in direct violation of central Communist Party directives.
The People's Daily today devoted an entire article to the downfall of a 37-year-old reformer, Xia Renfan, director of a trolley company in Shenyang who had greatly increased profits and wages in his enterprise. He was selected in 1985 as one of the country's 100 outstanding young enterprise managers.
According to the People's Daily, Xia made several relatively small errors of judgment but that was enough to cause his superiors to send an investigating team to look at his alleged "violations of discipline." Despite his high performance rating, he was fired.
The People's Daily concluded that Xia's main problem was not his mistakes, but the fact that he had forced some high-level officials in the enterprise to resign, thus bringing their wrath down upon him.
In an editorial, the party newspaper criticized "some leading comrades" who it said are lenient toward cadres who do not pursue reforms but who "cannot tolerate those cadres who are bold and have made achievements in carrying out reforms."