China: Report Card on Reform

Wearing a gray Mao jacket, Premier Zhao Ziyang delivered the keynote address last week at the opening session in Peking of the National People's Congress, China's nominal parliament. His theme was "socialist economic construction," a euphemism for the wide-ranging reforms instituted by Paramount Leader Deng Xiaoping that have decentralized economic planning and decision making. Zhao spoke of "gratifying major successes" over the past year in industry, housing and agriculture. Then, in a surprising admission before the 2,712 delegates, he acknowledged that there were problems.

The Premier complained of rises in prices, wages and credit and decried "selfish departmentalism," meaning corruption and...