Prices

The central documents granting jihua danlie clearly state that prices are included in the areas now under Wuhan's competence. Yet Hubei has flatly refused to give the city any real authority in price management. "Hubei still sets the prices and subsidies for food. This is a sensitive problem and the mayor has to negotiate this directly with the governor."^[58] For example, provincial and municipal authorities, fearful of "disorderly price increases," announced that basic monthly food subsidies would go up from 10 yuan per Wuhan resident to 13.50 yuan on April 1, 1988.^[59] The city had sought to limit the subsidy's increase because inflation, combined with increasing population, makes it increasingly difficult to pay for them. Up until 1988 Wuhan was paying about 1 billion yuan per year for food subsidies. The province, fearful of adverse public reaction to inflationary pressures being felt for the first time in China in two generations, forced the city to accept a higher subsidy than it wanted. The city objected to what it sees as "direct interference" in its new authority, but it had little choice.^[60]

By late October strong efforts to control inflation were being pushed by provincial authorities. With pressure from Hubei's first Party secretary, Guan Guangfu, Wuhan city Party secretary, Zheng Yunfei, publicly agreed to follow Hubei's price control index, abrogating city-approved price increases that were made after September 1. Further, the city agreed to forgo any price increases through spring 1989 and expansion of the scope and range of commodities with floating prices, and refused to allow any temporary price increases. Wuhan, at Hubei's insistence, agreed that no authority over prices would be delegated below the provincial level until some undetermined time in 1989.^[61]

Wuhan's acquiescence to Hubei in these matters, in contrast to the 1984 effort to bargain with the province, indicates it lost the backing of

the Center on this issue. Indeed, it was the Center that pushed lower levels to, first, deal with public complaints about inflation and, when this failed, to bring it under control by means of the economic retrenchment. By early 1990 that program was clearly in place in Wuhan, where commercial activity was considerably less than that of mid-1988.