The legacy of Zhu Rongji

 His crowning achievement was securing American support for China’s entry into the World Trade Organization, which came in 2001.

Since its founding almost 77 years ago, the People’s Republic of China has had eight premiers. But only two—Zhao Ziyang and Zhu Rongji—deserve credit for the country’s economic rise.

In the 1980s, Zhao translated Deng Xiaoping’s vision of “reform and opening up” into policy, pushing through the reforms that underpinned China’s economic miracle. In the 1990s, Zhu—who recently passed away at age 97—racked up his own lengthy list of accomplishments, becoming one of China’s most respected senior leaders.

Zhu’s rise to the pinnacle of Chinese politics could not have been predicted. Born in 1928 in Changsha, the provincial capital of Hunan, Zhu’s life was marked by tragedy from the start. His father died shortly before he was born, and his mother succumbed to illness when he was just nine, leaving him to be raised by his uncle.

Nonetheless, Zhu excelled in school. After finishing high school in 1947, he was admitted to the prestigious Tsinghua University, where he majored in electrical engineering.

After graduating in 1951, he found a job in the State Planning Commission, where he stood out for his talent and work ethic. Before long, Zhu was promoted, becoming the executive assistant for a senior commission official.

But, soon after, it looked like Zhu’s rise through the ranks of the Communist Party of China might be cut short. In 1957-58, during Mao Zedong’s campaign against the intelligentsia, Zhu was labelled a “rightist” for criticising Mao’s economic policies, expelled from the CPC, and banished to the countryside with other disgraced government workers and party members for “re-education” through manual labour. He was subsequently transferred to a two-year college to teach mathematics.

After five years, Zhu was deemed sufficiently reformed and was permitted to return to his old job at the State Planning Commission. His “rightist” label was officially removed in 1962, but it continued to haunt him. Few were inclined to trust, let alone promote, a former rightist. As the Cultural Revolution unfolded later in the decade, Zhu was again purged and sent for “re-education”.

Once that dark period ended with Mao’s death in 1976, Zhu’s prospects brightened considerably. In 1978, he was allowed to rejoin the CPC, and he was appointed to a mid-level position in the powerful State Economic Commission (the successor of the State Planning Commission) the following year. In 1983, he became vice-minister of the commission.

Then came Zhu’s big break. In 1987, he was appointed mayor of Shanghai, where he began to build a reputation as an effective economic reformer, loyal party member, and fervent opponent of corruption. He also caught Deng’s eye.

After purging Zhao in the weeks following the Tiananmen Square crackdown in June 1989, Deng was looking for another competent technocrat to take charge of the economy. And he was reportedly deeply impressed by Zhu’s grasp of economic issues during his visits to Shanghai in 1990 and 1991. So, in 1991, Deng appointed Zhu as a vice-premier of the State Council.

Less than two years later, Zhu joined the Politburo Standing Committee and became executive vice-premier — essentially China’s economic czar. Again, he proved more than up to the job, quickly taming high inflation and implementing a series of ground-breaking reforms.

Notably, he oversaw the unification of China’s official and swap-market exchange rates in 1994, resulting in a massive one-time devaluation that would facilitate the country’s emergence as an export powerhouse within a decade.

Zhu also restructured China’s outdated tax system, dramatically increasing the central government’s revenue—and thus its ability to make pro-growth investments. Moreover, he pursued financial-sector reforms that transformed a hidebound, centralised banking system into a dynamic, commercially-oriented sector.

And when the Asian Financial Crisis erupted in 1997, Zhu saved the Chinese economy by restructuring its state-owned industries, privatising some enterprises and shutting down others, and ensuring that state-owned banks received the capital they needed to shore up their balance sheets.

Zhu solidified his legacy of deft economic leadership after being promoted to premier in 1998. His crowning achievement was securing American support for China’s entry into the World Trade Organization, which came in 2001. This was a decisive moment for China’s economy. Total Chinese exports soared from US$253 billion in 2000 to US$1.65 trillion in 2010.

In terms of style, Zhu bore little resemblance to a typical party apparatchik. Nicknamed “Boss Zhu,” he was an outspoken, highly gifted technocrat who suffered no fools. But Zhu was not a political reformer.

Yes, he managed to avert a bloodbath in Shanghai after the Tiananmen Square massacre—an achievement for which he was widely praised. But he never advocated political liberalisation.

Even Zhu’s institutional reforms were not necessarily focussed on market liberalisation. On the contrary, they ended up doing more to strengthen the state’s administrative capacity than to empower the private sector.

Likewise, even as he restructured the state-owned sector, he left large state-owned enterprises essentially untouched, enabling them to retain their near-monopolies in energy, telecommunications, and financial services.

In short, Zhu was not easy to categorise. He was both an exceptional reformer and a loyal CPC member—a technocratic trailblazer. When journalists called him “China’s Gorbachev” during his visit to the US in 1990, an annoyed Zhu shot back: “I am not China’s Gorbachev. I am China’s Zhu Rongji.”

Zhu’s rise from banished “rightist” to distinguished premier was as unlikely as it was astonishing. It might not have been possible at all without Deng’s personal intervention. In hindsight, there is no question that Deng made the right choice. - FMT

Minxin Pei is professor of government at Claremont McKenna College.

The views expressed are those of the writer and do not necessarily reflect those of MMKtT.