Bo Chi <chi@vlsi> (02/09/91)
* C h i n a N e w s D i g e s t *
(News General)
February 8, 1991
Table of Contents # of Lines
News Briefs ...........................................................15
1. China, South Korea To Exchange Industial Exhibits ..................20
2. Inflation Fear Returns in China ....................................65
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News Brief ............................................................15
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From: chenh@ucs.indiana.edu
Source: AP NEWS 2/8/91
-- U.S. warplanes knocked out an Iraqi mobile missle launcher and scored
possible hits on three others overnight, U.S. military sources said.
another SCUD hit central Telavi of Isreal. Only slight injuries reported.
-- Defense Secretary Dick Cheney and Gen. Colin Powell, Chairman of the
Joint Chiefs of Staff, arrived Friday in Saudi Arabia as they began a
quit prepare advice for President Bush on moving into the ground
phase of the campaign.
-- Iraq has organized "execution battalions" to punish soldiers attempti
to desert on the battlefield, and to discourage those who might be thinki
deserting. This information came from prisoners of war.
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1. China, South Korea To Exchange Industial Exhibits ..................20
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From: chenh@ucs.indiana.edu
Source: Dow Jones News 2/8/91
SEOUL -(AP-DJ)--South Korea and China will exhibit industrial products for
the first time in each other"s capitals this year, the state-run Korea Trade
Promotion Corp. (KOTRA) said Friday.
Officials said that the China Chamber of International Commerce (CCOIC) will
display Chinese goods in Seoul for a week in May, while KOTRA will hold an
exhibit in Beijing in September. Exact dates were not given.
The two countries, which have yet to establish diplomatic relations, had
two-way trade in the amount of 3.3 billion U.S. dlrs in the first 11 months of
1990. China is South Korea"s biggest communist trading partner.
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2. Inflation Fear Returns in China ....................................65
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From: "Charles P. Mok 08-Feb-1991 1136" <mok@fortsc.enet.dec.com>
Source: World Economy Section, Investor's Daily. February 6, 1991
BEIJING (Reuter) - The specter of renewed inflation has returned to haunt
China, recalling memories of the panic buying that helped to spark the social
unrest in 1989.
The main culprit is inefficiency in the economy, according to a report from the
State Statistical Bureau published in official newspapers yesterday.
"Social demand is gradually recovering, production is increasing by the
quarter, but making progress in improving economic efficiency has been slow,"
the Economic Information Daily said. "Within economic development, the
potential for inflationary pressure has increased," it said in an analysis
based on the bureau's report.
Loss-making state enterprise continue to make products that no one wants to
buy, Western diplomats say, and even efficient industries are hampered by
chronic shortages of energy and raw materials and by a transport network that
has trouble moving goods to where they are needed.
If demands picks up, supply may not be able to keep pace, resulting in higher
prices, the diplomats say.
"The old problem of low economic efficiency has not yet been changed. Add to
that the new pressure of potential inflation, and out economic task will still
be arduous," the newspaper said.
Fierce inflation in 1988 and the first half of 1989 - approaching 30% in cities
- contributed to the publci anger at Communist authorities that resulted in
pro-democracy demonstrations and unrest.
The army crushed the challenge to the party's leadership in June 1989 when it
cleared Tiananmen Square with tanks and guns.
Economic authorities clamped down on inflation with an austerity program that
brough price rises down to 2% last year while stifling economic growth.
"People in government are talking about 8% inflation this year, which people
can live with," said a Western diplomat. "If it goes over 10%, however, that's
when you get into trouble with rekindled inflationary expectations starting
massive demand that can't be met with increased supply."
"If they can manage inflation, they could have a very good year. If they don't
manage it correctly, it could be disastrous since there's so much cash in the
system," he said.
Diplomats say they anticipate a sharp tightening of credit to try to head off
inflation.
The government relaxed credit last year to stimulate the economy, resulting in
a huge amount of new lending. But much of the new lending was not used
productively.
"Loans were thrown out with reckless abandon...but the funds were stagnant,"
said Economic Information Daily, adding that credit often did not go where it
would do the most good.
Another key problem was China's lack of a system for rewarding good enterprises
and letting bad companies fail, it said, quoting a State Statistical Bureau
analysis. Many poorly managed enterprises were simply taking new loans in
order to pay off old debts, it said.
The State Statistical Bureau was encouraged by the upturn in demand, however,
and cited a 10.1% increase in investment by state-owned enterprises in 1990.
It pointed to investment in 200 key construction projects.
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