Sanctions Will Backfire, China Warns

BEIJING —  Premier Li Peng, speaking to foreign diplomats and Chinese guests at a National Day reception, declared Saturday night that economic sanctions against China will backfire against those who impose them.

“The economic sanctions applied by some Western countries against China will bring it temporary difficulties,” Li acknowledged. “But (they) will also stimulate the Chinese people to even greater enthusiasm for making their country strong through self-reliance. Those who apply sanctions will suffer from their own actions.”

President Bush acted in June to ban the export of military-related equipment to China, and several other Western nations also have imposed limited sanctions in response to the bloody June 3-4 martial-law crackdown against pro-democracy protests in Beijing.

U.S.-China business ties have been chilled but not cut off. There is now some movement toward a resumption of greater contacts, a point that was marked at Saturday’s reception by the presence of former Secretary of State Alexander M. Haig Jr. in a place of honor at one of the head tables. The reception was held in a large banquet room in the Great Hall of the People.

Haig, now a private businessman, is scheduled to speak at an event this week marking the 10th anniversary of the founding of the China International Trust and Investment Corp. (CITIC), China’s leading state-owned trading firm.

Also present at Saturday’s reception, sitting at one of the ordinary tables for Chinese guests, was Hu Qili, the second-highest official to be removed from office as a result of the June crackdown. Hu, 59, who was ousted from the policy-setting Politburo Standing Committee, had been a key reform-oriented ally of former Communist Party chief Zhao Ziyang.

Brushes Questions Aside

Hu, in his first public reappearance since the June crackdown, looked tired and somewhat tense at Saturday’s reception. When approached by foreign reporters, he responded with friendliness and thanks to their greetings but declined to answer any questions, other than to say that he is “fine.”

Zhao, who has been accused of supporting the student demonstrations and splitting the party, was not present. But in an indication that further action against Zhao is unlikely, Politburo Standing Committee member Li Ruihuan, who was promoted at the time of Zhao’s ouster, told a foreign reporter at the reception that it now appears Zhao will be allowed to maintain his Communist Party membership.

In his 25-minute speech, Premier Li recalled the establishment of the People’s Republic of China on Oct. 1, 1949, and reviewed the accomplishments of the past 40 years.

Looking to the future, Li placed primary emphasis on development of the state-controlled sector of China’s economy.

Li said that an economic retrenchment program launched last fall as part of an attack on inflation and economic imbalances must be continued for “probably three years or even longer.”

The retrenchment effort--which involves tightening of credit, reimposition of some price controls and efforts to reduce the scale of investment in light industries--has led, as intended, to an economic slowdown, Li said.