In his ten years running China's economy, Zhu Rongji achieved explosive growth. But Zhu never dared touch China's political system, putting social stability and economic progress above all other considerations.
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1928 Where did Zhu Rongji Come from?
Born in 1928 in Hunan Province, Zhu Rongji attended Tsinghua University and joined the Communist Party in college. Zhu joined a generation of technocrat-leaders, educated in the sciences and engineering at China’s top universities. Zhu was purged from the party for criticizing Mao’s economics during the Great Leap Forward, and purged again for reformist tendencies during the Cultural Revolution. After Mao’s death, he rose through the bureaucratic ranks as a relative unknown until he burst onto the scene as Shanghai Mayor in 1988, handpicked by Deng Xiaoping.
Zhu succeeded Jiang Zemin as Shanghai’s mayor in 1988, when Jiang was called to Beijing to assume a national role. Zhu received plaudits for his work in Shanghai, especially the development of Pudong district. Zhu’s economic success in Shanghai attracted the attention of Deng Xiaoping in Beijing.
The development of the Pudong district of Shanghai
In the turmoil following the violence in Tiananmen Square, Zhu played a pivotal role in restoring Deng’s influence by providing a launch pad for Deng’s Southern Tour. Out of gratitude and admiration, Deng picked Zhu to move to Beijing and take charge of running China’s economy.
In 1991, Jiang Zemin met Bill Clinton in Beijing for a press conference broadcast live across China. This was a new face of Chinese foreign policy, an attempt by a new generation of leaders to put a more democratic face on China.
Zhu, like Deng, understood that the Chinese Communist Party could maintain legitimacy, as long as they maintained growth. As China’s top economic policy maker, Zhu won over initially skeptic conservatives like Chen Yun by displaying a streak of caution that Deng lacked. Zhu satisfied Deng, the Chinese people, and conservatives, by giving them the growth they craved while avoiding the pitfalls of hyperinflation. Journalist Michael Anti talks about the role of growth in China’s new social contract:
"If we can increase the speed of economic construction, and continually raise the people's living standards," Zhu preached to a crowd of local cadres, "then the Party will be trusted and respected, and the people will support us." PAGE 334
1997 Zhu’s Record: Centralization
As Zhu Rongji took charge of China’s economy he achieved several key goals that had eluded China’s leaders.
Zhu put limits on Deng’s policy of allowing local governments to keep the revenue they generated through market reforms, a tactic former Assistant Secretary of State Susan Shirk called “playing to the provinces.” Susan Shirk explains:
Like playing a massive ultimatum game, Zhu revamped China’s federal tax policy along U.S. lines to bring new revenues to Beijing without upsetting the provinces.
Zhu confronted China’s ancient and dilapidated State-Owned Enterprise system, letting some fail, bailing out others, and gradually pushing the economy in a more private direction. But Zhu hesistated to call his plan a “privatization,” fearing that rapid reform could lead to an East German or Soviet-style collapse.
Beijing University Economist Yao Yang discusses this euphemism:
As Premier, Zhu faced political challenges that were, for him, a slightly bigger challenge than management of China’s complex economy. In 1999, an American bomber over Serbia fired five missiles into the Chinese embassy. A diplomatic uproar ensued, and Chinese took to the streets in protest. Zhu urged moderation, arguing that stability was more important than vengeance and that continued protests would put China’s upward trajectory at risk.
In 2001, after years of arduous negotiations, Zhu finally secured China’s entry to the World Trade Organization. The process had been fraught, with Chinese accusing the Americans of reverting to old imperialist ways and making unreasonable demands from the Chinese. Chief American negotiator Charlene Barshefsky explains the importance of WTO membership to China:
Despite the wealth Zhu had generated for the country as a whole, rural Chinese began to feel that they were bearing an unfair share of the costs. While a rising tide did lift all boats, Zhu’s attempts to appease urban areas had started widening the gap between rich and poor. As Zhu prepared to hand over power to the next generation of leaders, Hu Jintao and Wen Jiabao, bankers and venture capitalists joined the ranks of China’s Communist Party.
Charlene Barshefsky again on Zhu’s importance to China’s growth: