Tough-talking Zhu may be China premier Economic manager credited with keeping inflation under control

March 04, 1998|By Frank Langfitt | Frank Langfitt,SUN FOREIGN STAFF

BEIJING -- Vice Premier Zhu Rongji is the bad cop of Chinese politics.

In recent years, he has summarily sacked prominent officials and is said to have suggested that managers of the nation's money-losing, state-owned businesses commit suicide to atone for their failures. Combining aggressive management with a keen mind, Zhu has kept China's rapidly evolving economy from running off the rails while earning the respect of citizens and foreign business leaders.

This month, he is expected to be rewarded for his work with a promotion to premier -- the head of China's government -- when the National People's Congress holds its annual meeting beginning tomorrow.

Diplomats, China-watchers and ordinary Chinese are applauding the anticipated move because they see Zhu as a pragmatic economic manager in a nation where the economy is paramount. Among other things, Zhu is credited with reining in inflation after it rose to about 24 percent in 1994.

"I think Mr. Zhu's record is without parallel in China in the reform period," says Nicholas R. Lardy, a senior fellow who studies China's economy at the Brookings Institution, a Washington think tank. "His role in bringing inflation under control after he took over as governor of the central bank -- without sending the economy into the tank -- was masterful."

Now, Zhu faces even greater challenges: avoiding the economic virus that has spread throughout much of Asia and reforming the nation's creaking, state-run businesses. He must also find a way to re-employ millions of laid-off workers who could destabilize China as the government tries to make the painful transition toward a more market-oriented economy.

As recently as 1996, it didn't look as if Zhu had a shot at the premier's job, which has been held for the past decade by Li Peng. Li is stepping down this month at the end of his second term and is expected to head the National People's Congress.

Many thought Zhu had made too many enemies within China's corrupt and hidebound bureaucracy to become the next premier. He began managing the economy in 1993, sacked the head of the central bank and took over the job himself. The next year, he fired the governor of Heilongjiang in China's rust belt for failing to reduce financial losses among the province's state-owned enterprises.

Zhu's "off-with-their-heads" approach appears to have played well with some Chinese who are tired of officials they perceive as interested in little more than preserving their own power. He also has an uncommon reputation for being scrupulously honest.

Despite concerns that Zhu had poisoned his chances for higher office with his heavy-handed tactics, the results seem to have trumped potential political enemies.

"People stopped arguing with success," says a Western diplomat in Beijing.

For all the talk of Zhu's brusque nature, he can be relaxed, engaging and even disarming with people he sees as intellectual and professional peers, according to those who have met him. He impresses foreign visitors with a detailed knowledge of their work.

When greeting a senior, Western central banker last year, "he recited every interest rate decision the visitor had made since their last meeting a couple of years before," according to a diplomat who attended the meeting.

Zhu, 69, grew up in a poor family in the city of Changsha. His parents died when he was young and he later moved to Shanghai. He graduated in 1951 from the electric motor engineering department of Qinghua University.

Zhu worked as a government economic planner, but lost his job in 1957 after he was branded a "rightist" for criticizing the Communist Party. He was sent to the countryside and worked as a teacher before being rehabilitated more than two decades later.

As mayor of Shanghai in the late 1980s, he helped put together a team that launched the successful Pudong industrial zone. He also pared down the approval process for investors, earning the nickname "one-chop Zhu." A "chop" is a government stamp and many are often required to move matters through China's notoriously slow bureaucracy.

Zhu received credit for not sending in troops when Shanghai residents staged demonstrations during the Tiananmen Square uprising in Beijing. His performance during Tiananmen and his economic pragmatism led some in the Western press to label him "China's Gorbachev" -- a kiss of death in Chinese politics -- which Zhu has rejected.

Given his record and style, he appears best suited to continue handling the nation's daunting economic challenges and working with China's more consensus-minded president, Jiang Zemin. "Zhu's well-earned reputation for being hard-headed is an asset in a situation like this," says Joseph Fewsmith, a China scholar at Boston University.

Yet, Zhu's position could also be a precarious one. Many of the problems affecting Asia's economies are beyond his control and reforming China's state-owned enterprises is an enormous task that has a long way to go.

"My guess: He's going to be an excellent premier," says Mike Lampton, who spent 2 1/2 weeks traveling around the United States with Zhu in 1990 and serves as director of China studies at the Johns Hopkins University's School for Advanced International Studies. But, "if there is large-scale, political instability, they will be looking for people to blame and he will be right there, available."

Pub Date: 3/04/98

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