China Pledges 1987 Price Stability in Move to Contain Student Unrest

PEKING —  China moved Tuesday to prevent student unrest from spreading to other sectors of society by pledging to keep the prices of retail goods stable next year.

Over the last few weeks, people in some cities have been buying up large quantities of consumer goods in the expectation that there would be a wave of price increases at the beginning of 1987. Rumors began spreading recently of dramatic increases for such items as cigarettes and sugar.

In Peking, after higher 1987 prices were announced this month for coal gas, the commonly used residential heating fuel, some residents were seen ripping down placards that explained the increases.

In recent days, amid a wave of student demonstrations on behalf of democracy, there had been some concern that a new round of price increases for food and retail goods might touch off wider urban unrest.

But on Tuesday in a front-page article in the Communist Party newspaper People’s Daily and in a series of radio broadcasts, government authorities indicated that there will be no drastic changes in retail prices next year.

Line Held on Basic Items

For the two most basic food items, grain and cooking oil, both of which are still rationed, the regime said flatly that prices will be held at current levels.

For other retail items, the announcement said, there might be some “moderate adjustments” next year, but these will be made “in a planned, orderly way and only in cases where prices are exceptionally unreasonable and unfavorable to production.”

This wording still appeared to leave the regime with some leeway to carry out price reforms in a gradual way next year, perhaps delaying the implementation of some price increases until after the student demonstrations die down.

Lifting price controls and eliminating state subsidies for food and other low-priced retail goods are key elements in the market-oriented economic reform program of the Chinese leadership.

Since the urban economic reforms were initiated in 1984, price increases have proved to be politically sensitive. In early 1985, prices for meat, fish, eggs and vegetables were allowed to rise by anywhere from 20% to more than 100%. These increases brought about the most serious bout of inflation China has experienced under Communist rule and helped touch off a round of student demonstrations near the end of the year.

Lower Inflation Expected

Premier Zhao Ziyang had announced that 1986 would be a year of “consolidation” in which there would be no major price changes. In fact, late last summer and fall the regime began permitting price increases on some items. But the overall inflation rate for 1986 is expected to be far below last year’s officially reported rate of 12% in the cities.

Tuesday’s announcement was said to be the result of decisions made at a national meeting on price policy held in Peking from Dec. 15 to 24.

“The overall state control of prices will be strengthened and improved to ensure stable prices,” the government’s New China News Agency said.

Meanwhile, a senior Chinese education official told a press conference Tuesday that none of the students who have taken part in the demonstrations have been arrested.

He Dongchang, the senior vice minister of the State Education Commission, said that “no more than 2%” of the students at Chinese universities have taken part in the protests, which spread to at least 11 cities.

Reflection of Youth

He avoided criticizing the students and took the position that their protests on behalf of democracy were a reflection of their youth and inexperience. Most of the protesters, he said, have been first- and second-year students.

“They believe they know a lot, but in fact they know little,” he said. “ . . . They are the sons and daughters of new China. We take great care of them. God allows young people to make mistakes. When we were young, we basically did the same thing.”

Nevertheless, he made it clear that the authorities will not permit any challenge to the rule of the Communist Party, the socialist system, Marxist philosophy or the dictatorship of the proletariat--the so-called four cardinal principles set out in the Chinese constitution.

“The question of winning democracy from the government and the party does not exist,” he said. “Without the leadership of the Communist Party, China will disintegrate. The country will experience turmoil.”

Stronger Training Due

Because of the student demonstrations, he said, “we will strengthen the ideological and political training at our universities.”

Peking’s university campuses were quiet Tuesday, but in several places students had erected new wallposters bearing political messages. The new posters went up despite a government warning in the Peking Daily the previous day reminding the students that wallposters are illegal and that violating the law can carry a sentence of three years in prison.

One, at Peking University, said, “Without Democracy, There Is No China.” A poster put up at nearby Peking Teachers’ College said, “Abolish Authoritarianism,” and another there said, “The Marcos Government Was Overthrown by a Mass Uprising of the People”--a reference to the uprising that brought down President Ferdinand E. Marcos of the Philippines last February.