CHINA MUST REFORM IRRATIONAL PRICE SYSTEM, ZHAO
China's Premier Zhao Ziyang said the
country must continue to reform its "irrational" price system
although this will mean price rises and cause living standards
for some people to fall.
    Zhao said China's price system is irrational due to
"prolonged negligence of the law of value and due to the rigid
and excessive state control."
    "The prices of farm products, energy, raw and semi-finished
materials and other primary products have long been too low and
many products have long been in short supply," he said.
    Price reforms are necessary to "establish a new vigorous
socialist economic structure, to effectively promote production
and commodity circulation and provide correct guidance to
consumption," Zhao added.
    Reforms are bound to lead to a rise in the general price
level but will only be implemented after careful studies so as
to keep the increase within the capacity of society and the
people "to withstand the strain."
     He said the general price level will rise in 1987 less
than in 1986, with price increases of a very small number of
products.
 REUTER
