The People's Republic of China will celebrate the 50th anniversary of its founding Oct. 1, and major national events are scheduled to take place at that time. President Jiang Zemin has been promoting the slogan of "stability first" -- a reflection of his desire to complete the ceremonies successfully and consolidate his leadership.

Prime Minister Zhu Rongji, in his first report on government activities to the recent National People's Congress, only reiterated the year-old policy of achieving reforms in three areas -- government organizations, state enterprises and the financial sector -- within three years and emphasized the difficulties lying ahead. He failed to tell the congress how much progress had been made so far and where problems had been encountered. Zhu presumably took a conciliatory stance toward the Chinese Communist Party -- choosing not to touch on specific problems, for instance -- in compliance with Jiang's wishes.

I doubt if such dilly-dallying is warranted in the light of China's present economic difficulties. The recent bankruptcy of the Guangdong International Trust & Investment Corp. was not an isolated instance of a local bank in trouble, but part of a serious bad-loan crisis affecting almost all banks and nonbank financial institutions in China, including state-owned banks. Most of the commune-type state enterprises, dating back to the Mao Zedong years, are stuck with obsolete production equipment and inflexible structures, imposing enormous fiscal and financial burdens on the government. Mass unemployment has resulted from the restructuring of these enterprises. Faced with the challenge of guaranteeing a livelihood for the jobless, the government has been trying to expand private enterprises.