GORBACHEV IN CHINA: The Communist Summit : Gorbachev Hails China’s Economy as Trip Ends

Soviet President Mikhail S. Gorbachev, completing a four-day trip to China, on Thursday visited one of the special development zones that for a decade have helped the Chinese economy grow at an average of 9.6% a year, and he speculated how the Chinese economic reforms could be adopted in the Soviet Union.

Touring the Minhang Economic Development Zone in Shanghai, Gorbachev questioned Lu Youming, one of its general managers, about incentives that in less than three years have brought 56 enterprises to the zone, most of them with advanced technology and with a total investment of $275 million.

“You have done a lot here,” Gorbachev told Lu. “And China has done a lot in recent years. . . . There are important lessons for us here.”

The Soviet Union for several years has been considering the establishment of such development zones, common throughout East Asia, as a way of attracting foreign capital and technology through low taxes, rents and other fees as well as freedom from the bureaucratic control of state planning.

“The opposition to special economic zones in our country is incredible,” a senior Soviet Communist Party official accompanying Gorbachev commented as the group toured a plant manufacturing escalators and elevators. “They bring out every vested interest we have, from the central planners to the industries to our bankers and tax collectors to the labor unions.

“Everybody says he wants change, but nobody wants his little world, or big world, affected. . . ,” the official said. “What the Chinese have done in breaking down such barriers to economic development, as well as what they have built, is very impressive.”

But Soviet officials were perplexed by China’s growing political crisis.

Downtown Shanghai was virtually paralyzed Thursday as tens of thousands of students, workers and farmers streamed into the city, the largest in China, to endorse the demands for greater democracy, even at the cost of replacing the leadership that in the past decade has managed to double the gross national product, national income, government revenues, return on investment and personal incomes.

“People want more than prosperity--that’s obvious,” one Soviet official commented as he read banners calling for the replacement of many top officials, including Deng Xiaoping, China’s most senior leader for more than a decade. “Deep forces are at work here, however, and a judgment on the balance of economic and political gains is hard to make.”

Jiang Zemin, first secretary of the Shanghai Communist Party committee and a member of China’s ruling Politburo, summed up the situation for Gorbachev in two sentences.

“Hope and difficulties exist side by side,” he told the Soviet leader over lunch. “Opportunities and challenges come hand in hand.”

Gorbachev, speaking just before boarding his plane for the return flight to Moscow, told Wu Xueqian, a Chinese state councilor who oversees foreign affairs, that he hoped “the current situation will be eased and settled,” the official New China News Agency reported.

The “traffic problem,” as Shanghai officials referred to the widespread demonstrations, curtailed Gorbachev’s six-hour program here as the protests had in Beijing earlier in the week.

Nonetheless, he described his visit, the first Sino-Soviet summit meeting in 30 years, as of “epoch-making significance” and “a watershed event.”

Gorbachev arrived home in Moscow shortly before midnight, telling Soviet television, “We saw in China an atmosphere of friendship and hopes for cooperation,” news agencies reported.

A joint communique, published in Beijing, showed a broad measure of agreement on most of the issues that had divided the two great Communist powers and brought them to the brink of war.

In a key declaration, the two countries pledged that “neither side would seek hegemony of any form” in Asia or any other part of the world. China, throughout the Sino-Soviet dispute, called the Soviet Union the “major hegemonist” and accused it of trying to dominate weaker nations.

The communique announced intensified efforts to resolve long-standing border disputes and to reduce “to a minimum level commensurate with normal, good neighborly relations” the forces deployed along their 4,500-mile frontier, the scene of serious clashes in 1969 and continuing incidents until two or three years ago.

The two countries also said that their Communist parties would resume direct contacts on a wide range of issues, including political and economic reforms, and put aside the ideological differences that had so bitterly divided them.

They will work more closely in the future on the resolution of international issues, the communique said, noting that extensive agreement already exists in their view of world problems. But they reiterated their separate statements that their rapprochement would not harm their relations with other countries.

The main remaining difference between them, as expected, is the future of Cambodia. While welcoming Vietnam’s pledge to withdraw all its troops from the country by the end of September, ending a decade-long occupation, China and the Soviet Union could not agree on how an independent, nonaligned government should be formed.

“It is essential that no civil war in Cambodia should follow the complete Vietnamese troop withdrawal,” the communique said, “and the future Cambodia should be an independent, peaceful, neutral and nonaligned state.”

China continues to call, however, for a transitional, four-party coalition government, headed by Prince Norodom Sihanouk, the former Cambodian chief of state, after the withdrawal, while elections are being organized and conducted. This would bring the Khmer Rouge, ousted from power by Vietnam but still supported by China, back into the government.

The Soviet Union, which supported Vietnam in the 1979 invasion and subsequent occupation, called for the Cambodian parties to work out a solution to this problem themselves. Moscow’s hope is that Khmer Rouge influence would then be minimized.

The Sino-Soviet communique also envisions increased trade and the rapid expansion of economic cooperation.