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. Last Updated: 07/27/2016

Five-Year Plan Forecasts Stable, Wealthy China

BEIJING -- Beijing unveiled a five-year plan Tuesday to guide its economic boom to 2000, naming President Jiang Zemin as China's key leader into the 21st century, but offering more consolidation and less initiative on reform.


The 1996-2000 IX Five-Year Plan, a legacy of command planning that Beijing still uses to guide its thorny path to the marketplace, included economic and political objectives for the period up to the year 2010.


The 87-page plan forecasts the gross domestic product to grow an average of 8 percent after racing to lead the world with average increases of 11.4 percent over the last five years, while crucial grain production is targeted to increase by between 25 million and 35 million tons by 2000 to total production levels of between 490 million and 500 million tons.


The plan also stressed the importance of ironing out widening regional disparities with incomes in the prosperous east -- recipient of most foreign investment -- far outstripping the more remote and backward western provinces.


Chinese officials are anxious that paramount leader Deng Xiaoping's maxim to allow some people to get rich first was creating yawning income gaps that could threaten social stability.


"Maintenance of political and social stability is the basic prerequisite for the promotion of reform and development, and stability in turn is realized through the deepening of reform," Premier Li Peng told parliament in his state-of-the-nation address.


China will introduce a tax on interest earnings in the next five years and implement a tax on inheritance, policies to prevent the rich from getting richer and the poor from becoming poorer.


"The state ... will employ tax and other adjustment measures to resolve the problem of excessive social disparities," the plan stated.


The plan identifies seven trans-provincial economic regions to be set up in the next five years to coordinate development and narrow differences among provinces. Beijing hopes to direct more than 60 percent of soft loans from international donors to central and western regions.


The plan also tries to tackle reform of lumbering and loss-making state enterprises whose growth has been outpaced by the expansion of collectives and the private sector in a competitive marketplace.


State enterprises should lay off workers to boost efficiency, the plan says, confronting the taboo of unemployment that some leaders fear could trigger social unrest and jeopardize unbroken Communist rule since 1949.


"State Enterprises should declare bankruptcy if their liabilities outstrip assets, if they make long-term losses and if they lose out in market competition," the plan says.





The plan and long-term goals to lead China into the 21st century appeared unambitious, and designed partly to consolidate the grip on power of state president and party chief Jiang, now 69, in the face of a campaign to rejuvenate the leadership.


"The Communist Party central committee, with Comrade Jiang Zemin at its core and the solidarity of the party and the people, is an important guarantee that we will walk from victory to victory," the plan said.


to the National People's Congress, the communist-controlled parliament, for approval --


leader Deng Xiaoping