Premier Zhu Rongji gave his prescriptions for the country's weak consumer demand, declining exports and foreign investment, slow increase in fixed-asset investments, and dropping consumer prices to cabinet members and provincial governors in Beijing on July 15.

This included increased investment in infrustructure, technology and education, revamping state-owned enterprises (SEO), and allowing foreign investment in more industries.

Zhu said that the economic situation has been positive and encouraging thanks to the "active" financial policy of late last year. The GDP for the first half of 1999 grew 7.6 percent over the same period of last year, summer harvests were satisfactory, industrial production was on the rise, and SEOs saw growth in profits.

However, because of the changing international and domestic situation in March and April, certain problems in the Chinese economy have surfaced and insufficient market demand is especially noticeable, he said, pointing to 5 aspects of work that need to be considered for economic development this year:

-- More government funds need to go to infrastructure, technical innovations at SEOs, and especially to the interior of China.

--Consumer spending should be increased by increasing incomes of urban and rural people, with special attention being paid to the large number of medium and low-income people and the large rural population. Policies on increasing consumer loans must be formulated as soon as possible.

-- Exports should be increased by taking steps to attract more foreign investment and to use it effectively. Foreign investment should be allowed in a wider range of fields and policies that adversely affect foreign investment should be adjusted and services for foreign-funded enterprises in China should be significantly improved.

-- Reforms of SEOs are to be carried out according to recent instructions from President Jiang Zemin. The process of modernizing their management must be sped up and burdens on enterprises need to be eased to reach the goal of revamping large and medium-sized SEOs by the end of next year.

-- The 9-year compulsory education system must be implemented and high-school, vocational, and higher education need to be encouraged to make education a lucrative business, to stimulate the growth of related fields, and to benefit society in the long run.

Zhu told those gathered that they should have a clear idea about the current economic situation, and recommit themselves to combating problems. He said he himself is confident about the prospect.