Chinese Dismiss Premier Li Peng From Key Post

Chinese Premier Li Peng was dropped today from a key government post overseeing the country’s stalled economic reform program.

State-run media said the standing committee of the National People’s Congress appointed a little-known former Shanghai politician and business executive to replace Li as minister of the State Commission for Restructuring the Economy.

Radio Beijing and China Central Broadcasting said Li’s replacement is Chen Jinhua, 61. The China News Service said Chen was a “longtime leader in economic work” who had been president of the China National Petrochemical Corp. since 1983.

Li took charge of the commission in 1988, the same year he became premier.

The China News Service said Li asked to be relieved in order to concentrate on his duties as premier. But Li has been criticized for his strict economic policies and his role in the 1989 crackdown on the nation’s pro-democracy movement.

Li’s austerity program has reduced inflation, which peaked at about 40% in 1988. But the economic measures have also brought the nation to the brink of recession and forced millions of small factories to close.

The program also halted many market-oriented reforms and returned much of the economic decision-making power to the central government. Local and provincial governments had gained a greater say in economic affairs during the last decade.