Zhu Rongji, who died on August 12 aged 98, belonged to the generation of Chinese technocrats who made economic administration an instrument of national transformation. An electrical engineer, a victim of Maoist political campaigns, mayor of Shanghai and ultimately China’s premier, Zhu acquired an international reputation unusual for a Chinese head of government.
He was impatient with incompetence, hostile to corruption and willing to close factories, restructure banks and confront bureaucratic interests. His death invites comparison with the two premiers who bracketed his tenure: Li Peng before him and Wen Jiabao after him. The conventional ranking appears straightforward. Zhu was the great reformer; Wen the humane crisis-manager; Li the dour conservative remembered principally for Tiananmen Square. Yet history looks different when judged by consequences rather than reputations. Zhu may have been the finest economic administrator of the three, but Li was arguably the most consequential premier.
Born in 1928, Zhu studied engineering and joined the Communist Party in 1949. Criticism of economic policy brought political disgrace and rural exile during Maoism, followed by further persecution during the Cultural Revolution. The experience did not turn him against the party. Instead, it helped produce a distinctly Chinese political type: the communist technocrat who distrusted ideological economic management without embracing Western liberal democracy. Shanghai became Zhu’s laboratory. As mayor and later party secretary, he encouraged foreign investment, attacked bureaucratic obstruction and helped prepare Shanghai’s re-emergence as China’s financial centre. Importantly, the city remained comparatively calm during the upheavals of 1989.
Deng noticed. Zhu was promoted to Beijing in 1991 and soon became China’s principal economic troubleshooter. By the time he became premier in March 1998, Zhu had already helped curb inflation and strengthen Beijing’s fiscal control. As premier, he attacked the inefficiencies of the socialist economy. Government ministries were reduced, state employment cut, indebted state enterprises restructured and banks forced to confront bad loans. Millions lost the security of the old ‘iron rice bowl’. It was socially painful reform on a scale few democratic governments could have contemplated.
Zhu’s crowning achievement was China’s accession to the World Trade Organisation in 2001. Zhu and president Jiang Zemin understood WTO membership as more than a trade agreement. Foreign competition could serve as an external lever for domestic reform. China accepted international commercial disciplines and gained vastly improved access to world markets. The arrangement helped turn China into the world’s workshop.
Zhu and Jiang formed one of modern China’s most effective political partnerships. Jiang, Communist Party general secretary and president, provided political authority; Zhu supplied economic execution. Their China restructured state industries, modernised banking, encouraged private enterprise and entered the WTO. Jiang’s eventually opened Communist Party membership to entrepreneurs. Capitalism was not defeating the Chinese Communist Party; the Party was absorbing capitalism.
Yet Zhu was no Chinese Gorbachev. He wanted efficient markets, disciplined banks and competent government, not competitive elections. Economic liberalisation was intended to strengthen Communist rule rather than dismantle it. His predecessor, Li Peng, could hardly have possessed a more different reputation. Premier from 1987 to 1998, Li was cautious where Zhu was adventurous and politically conservative where Zhu championed economic reform. Above all hangs Tiananmen. During the 1989 confrontation, Li became the government’s most visible advocate of martial law. Deng remained China’s paramount leader and the ultimate authority behind the army’s deployment, but Li’s responsibility was substantial. The crackdown caused an unknown number of deaths and permanently damaged his reputation internationally.
Consider China’s predicament in 1989. Communist governments were collapsing across Eastern Europe. The Soviet Union would disappear two years later. At home, inflation, corruption and economic disruption had combined with demands for political reform. The Chinese leadership perceived not an ordinary protest movement but a potentially existential crisis. Li’s answer was stability first. One may condemn the methods while acknowledging the historical consequence. Unlike the Soviet Communist Party, China’s Communist Party survived. More remarkably, economic reform subsequently resumed. Deng’s southern tour in 1992 reasserted market-oriented development; Zhu rose rapidly, and Li, despite his conservative instincts, governed during a period when China’s economy increasingly moved toward markets.
Li was also a premier of infrastructure. An engineer with long experience in the electricity sector, he believed intensely in power generation and gigantic state projects. The Three Gorges Dam became the supreme symbol of this approach. It displaced communities, submerged cultural sites and created environmental controversy, but it also embodied something fundamental to China’s later development: the state’s willingness and ability to build on an enormous scale.
China’s transformation, after all, was never simply a story of market liberalisation. Factories needed electricity; exports needed ports; cities required roads, water and power. Markets operated inside infrastructure constructed and coordinated by a powerful state. Li helped preserve that state and enlarge its physical foundations. Zhu then made it economically more efficient. When Wen Jiabao succeeded Zhu in March 2003, the problem had changed again. China no longer needed to demonstrate that market reforms could generate growth. It needed to manage the consequences of success.
Under President and Party chief Hu Jintao, Wen presented a softer face of government. Whereas Zhu appeared most comfortable confronting bankers and factory managers, Wen cultivated an image of concern for farmers, migrant workers and disaster victims. The Hu-Wen administration emphasised the ‘harmonious society’, expanding social protection and paying greater attention to rural education and healthcare.
Then came 2008. The global financial crisis threatened the export machine Zhu had helped construct. Wen’s government responded with an enormous stimulus programme based on infrastructure, state-directed lending and investment. China maintained rapid growth while Western economies plunged into recession. Beijing’s ability to mobilise banks, provincial governments and state enterprises demonstrated the continuing strength of the state-led model. But the rescue had costs. Credit expansion contributed to debt, excess industrial capacity and dependence on property investment. Wen saved the machine partly by making it larger.
The three premiers thus performed three distinct historical functions. Li preserved the political machine and strengthened its physical foundations. Zhu rebuilt its economic engine and connected it to the world. Wen kept that engine running through a global crisis while cushioning some of its social consequences. Who, then, mattered most? If the criterion is economic reform, Zhu wins comfortably. Few premiers anywhere have supervised restructuring on such a scale. WTO accession alone altered China and eventually the world economy. If the criterion is social policy and crisis management, Wen has the stronger claim. He governed through SARS, natural disasters and the greatest international financial crisis since the 1930s.
But if the question is which premiership was most indispensable to the entire transformation, Li Peng deserves reconsideration. This is an uncomfortable argument, deliberately so. His association with Tiananmen makes admiration difficult. Political stability obtained through lethal force carries a moral cost that GDP statistics cannot erase. Historical importance, however, is not the same as moral attractiveness.
Li governed for approximately a decade, twice as long as Zhu. He occupied the premiership while China crossed the dangerous bridge between the revolutionary state inherited from Mao and the developmental state consolidated under Jiang and Zhu. He served under Deng’s paramount leadership and remained premier while Jiang established himself as party chief and president. He championed electricity generation, gigantic infrastructure projects and the state-directed developmental model that became characteristic of China’s rise.
There is a revealing paradox. Zhu could transform China’s economy because there remained a powerful Chinese state to transform. Wen could spend enormous sums rescuing growth because Zhu had helped create a vastly richer economy. But the continuity between these eras depended partly on the political and institutional survival achieved during Li’s premiership. Modern China was therefore not made by one reformer. Deng supplied the strategic break with Maoist economics; Li maintained the state through its most dangerous post-Mao crisis; Jiang institutionalised the new order; Zhu engineered its integration into global capitalism; and Wen managed its increasingly complicated consequences.
The writer is dean of the faculty of liberal arts at a private university in Karachi. He tweets/posts @NaazirMahmood and can be reached at: [email protected]
