Li sees threat to China's stability

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CHINA'S Prime Minister, Li Peng, yesterday painted a picture of a booming economy that is proving hard to tame, and where high inflation, a widening wealth gap, and corruption are contributing to possible flashpoints in Chinese society.

The need for stability and control were the themes of Mr Li's state of the nation address at the opening of this year's National People's Congress. Peking is in no mood to be lenient towards any signs of political activism, as the recent detentions of dissidents showed. China must maintain a balance between reform, development and stability, said Mr Li.

He also robustly reiterated China's policy on human rights dialogue. China was 'willing to discuss the matter with other members of the international community on the basis of mutual equality. However, it will never allow anyone to interfere in its internal affairs under any pretext'.

The US Secretary of State, Warren Christopher, is due in Peking today, with talks on human rights topping his agenda ahead of the US decision in June on renewal of China's Most Favoured Nation trading status. 'Economic interest is becoming a primary consideration in international relations,' Mr Li said pointedly.

Dissidents made two further moves yesterday in advance of Mr Christopher's arrival. A group of eight scholars and writers issued a statement appealing to the authorities 'bravely to put an end to China's practice over thousands of years of punishing people for their thinking, speech and writings'. And Wang Dan, the former student leader who has been taken in for questioning twice in the past week, issued an open letter calling for the NPC to discuss human rights.

On the economy, Mr Li admitted there were still 'some major contradictions and problems in the midst of progress'. These included excessive investment in fixed assets, a sharp rise in prices, and the loss-making state industries. 'Many aspects of the economic structure are still irrational . . . In some areas public order is poor, and not enough has been done to combat social evils.

'The corrupt practices of a few government functionaries, such as embezzlement, fraud, accepting bribes and bending the law for personal gain . . . have impaired the close ties between the government and the people,' Mr Li said.

(Photograph omitted from First Edition)