July 11, 1985

Don't we say that at the beginning of a war we have to be cautious to ensure victory? We need to look back over the period since the Third Plenary Session of the Twelfth Central Committee.

I said a while back to some foreigners that the reform had been going well. I made this remark at a time when there had been panic buying in Beijing, and the people here had been in a state of anxiety for two weeks. Nevertheless, I was optimistic. Things are still going well; I have thought so all along. It will be three to five years before we can tell whether the reform of the economic structure is successful and to what extent. Only when it has shown positive results will we be able to convince people that the resolution of the Third Plenary Session was correct.

The purpose of the reform is to lay a solid foundation for sustained development over the next decade and throughout the first half of the next century. Without the reform, there could be no sustained development. So, we should think not in terms of just three to five years, but in terms of the last 20 years of this century and the first 50 of the next. We must persist in the reform.

Price reform will be the hardest nut to crack, but we have to crack it. If we don't, there will be no foundation for sustained development. In the nine months since the Third Plenary Session of the Twelfth Central Committee, practice has proved that the decision to reform prices was correct. I am afraid it will take three years to straighten out the prices of consumer goods. It may take even longer, if the prices of capital goods are reformed simultaneously. If price relations are straightened out in five years, that will be a tremendous achievement. It will be a difficult task. The reform has been going well, and we must keep at it: we must continue on this path. Even if disturbances, major disturbances, occur, reform must continue. Otherwise, we shall accomplish nothing over the next decade. We must seize this highly opportune moment for reform.

As for the manufacture of industrial products, especially export goods, the central task is to improve quality; quality should be placed above everything else. Township enterprises should pay attention to quality, too. If we are going to improve quality, we must carry out reform. We should make some laws regarding quality, establish criteria for quality inspection and set up a powerful body to ensure that the criteria are strictly adhered to. If this is done, we shall be able to reduce the number of problems considerably and put a stop to deceptive practices. We've always stressed the importance of quality, but only in general terms. That's not enough: we have to give it priority and take practical steps to ensure it.

(Excerpt from a talk with leading members of the Central Committee of the CPC who were reporting on the current economic situation.)