On March 21, 1989, Nicholas D. Kristof reported in New York Times that Premier Li Peng called on China "to increase its reliance on central planning rather than market economics." The report noted that the tone of the speech, delivered to the annual National People's Congress, was remarkably different from that of a year before, when Li Peng had called for putting reform at the center of all.
The reform of 1988 was largely a rush job of an attempt to breakthrough the rigid pricing structure. It was not going well. Growth and spending was out of control during the summer and inflation was rampant. Indeed, it was the first taste of significant inflation for the majority of Chinese who had lived their entire life under central planning. Inflation, plus official corruption and profiteering, was fast becoming the major source of social discontent.
The NYT report also noted that Li Peng received loud applauses from delegates when he warned Western countries not to support the independence movement in Tibet, a critical threat back in 1989 as it is today.
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