How Xi changed the China system – Ian Johnson

 

Ian Johnson

Under Xi Jinping, China’s system for picking its top leader, set up by Deng Xiaoping, has changed dramatically, writes China analyst Ian Johnson. The world has to look at a different China, that might be less stable, he tells CNN.

CNN:

This system worked for Deng’s two hand-picked successors, Jiang Zemin and Hu Jintao. Jiang retired more or less on schedule in 2002 as did Hu in 2012.

If Xi had followed this system, he would retire at the party congress next week. Not only that but in fact we would have known his successor in 2017, just as we knew a decade earlier, in 2007, that Xi was going to succeed Hu.

Another part of Deng’s system of orderly succession was telegraphing halfway through one leader’s term who their successor would be. That was meant to forge consensus and prevent wild swings in policy.

But no successor was appointed in 2017, meaning we knew around then that Xi wanted a third term. Xi’s intentions became clearer in 2018 when China’s parliament lifted term limits on the presidency.

Even though ceremonial, the post had term limits enshrined in the constitution. Changing the constitution to lift those limits made clear that come 2022, Xi was going to go for a third term as supreme leader.

So in some ways what is happening this year was set in motion years earlier, but it’s still hugely significant. This will play out in ways that people around the world will experience in three important ways.

The first is in continued tension and conflict in foreign policy. Under Xi, China began projecting power beyond its borders. Under his watch, China massively built up its military presence in the South China Sea, constructed military bases in South Asia and Africa and instructed its diplomats to use very blunt, aggressive language in dealing with other countries — something known as “wolf warrior” diplomacy.

Most importantly, China took a new, harder-line approach toward Taiwan. In August, his administration released a white paper that carries a marked change in tone from previous white papers in 1993 and 2000.

Unification with Taiwan is now described as “indispensable” for Xi’s key overarching policy goal of “the rejuvenation of the Chinese nation.” That likely means more tensions with democratic countries over Taiwan and an increased threat of Chinese invasion.

Second is slower economic growth. Xi’s government has initiated few market-oriented reforms, leaving huge swaths of the economy still in state hands. That’s contributed to slowing economic growth during his decade in power and growing youth unemployment.

Over the past few decades, one thing that the world economy could count on was strong Chinese economic growth. That may no longer be the case.

Finally, China faces political uncertainty for the first time in decades. Even though Deng’s system lasted only a generation, it did give China a period of political stability that it hadn’t enjoyed in more than a century.

More at CNN.

Ian Johnson is a speaker at the China Speakers Bureau. Do you need him at your (online) meeting or conference? Do get in touch or fill in our speakers’ request form.

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How Xi Jinping moved away from Deng Xiaoping's reforms - Arthur Kroeber

Arthur Kroeber

One of the key legacies of president Xi Jinping is moving away from some of the key reforms initiated by his predecessor Deng Xiaoping, for example, where it comes to the importance of private companies for China's economy, says leading economist Arthur Kroeber in Global Village Space.

Global Village Space:

One of Xi’s overarching goals in terms of economic management is to effectively, if not formally, declare the end of the era of reform of Deng Xiaoping,” said Arthur Kroeber, a founding partner and managing director at research firm Gavekal Dragonomics.
Whereas Deng and subsequent leaders bolstered the role of private businesses in the economy and reduced that of the state, Xi seems to think that the balance is now about right, Kroeber said.

More in Global Village Space.

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China's struggle between capitalism and communism - Shirley Ze Yu

Shirley Ze Yu

China’s former leader Deng Xiaoping allowed the country to embark on a liberal economy, while repressing communist ideology. That “China Model” helped economically, but it was only useful in a temporary transition, writes political analyst Shirley Ze Yu in the Interpreter. Now president Xi Jinping swallows Deng’s bitter capitalist poison pill, she writes.

Shirley Ze Yu

China’s contemporary economic renaissance, measured across the past 40 years, is largely an orchestration of the expansion of capitalism, and the repression of communist ideology. The economic divergence brought forth by the Global Financial Crisis, between China and the West gave China the legitimacy to crown its unique “China Model”.

This China Model is a fallacy. It was liberalism that has led China to its reform success, not in spite of. China’s economic growth has been in lock step with a liberal reform agenda. The aggrandized China Model is nothing more than the twilight zone for an economy in transition. For China, it has been an exceptionally elastic and successful one. To bring China, engulfed in class-based social destruction, towards global economic convergence, late Chinese leader Deng Xiaoping replaced dogmatic Maoism with pragmatic utilitarianism. In a John Stuart Mill way, it was about the greatest good for the greatest number. 

Utilitarianism is amoral. 

Deng had one objective – economic growth. When the West challenges China’s human rights records, the plausible reply has always been that China lifted more than 800 million people out of poverty. For a nation that indoctrinated utilitarianism at its core of national political governance up until the Xi Jinping era, this was indeed a stellar record. 

Deng may have spared China from Maoism. His utilitarian prescription for the cure, however, is economically prosperous, but politically poisonous. Now 40 years on, the effect of this poison is spreading, seen through Hong Kong, China’s ethnic and religious territories, foreign policy, and virtually every fiber of the Chinese economy. Utilitarianism created China’s economic euphoria, and with it the delusion that it may surpass fundamental human moral challenges, both within and beyond its borders. 

Xi has swallowed Deng’s poison pill.

More in the Interpreter.

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Why China can not send in the troops to Hong Kong - Howard French

Howard French

China can send in heavy police or army to put down the devastating protests in Hong Kong. But that would devastate its "One Country, Two Systems" approach, and nobody - including Taiwan - would trust China again, writes veteran journalist Howard French in The Guardian.

Howard French:

Beijing’s choices in Hong Kong will not grow easier. The ultimate option, of course, is to mount a police or military intervention from the mainland in order to put down the protests. But at what cost? Hong Kong would lose forever its status as a global, cosmopolitan city, a goose that lays golden eggs for China. Since Deng Xiaoping introduced capitalism to China, Hong Kong has served as a critical business and investment portal for the country: a place where foreign companies feel it is safer for them to be based because of the independent judicial system and a banking structure that allows the free conversion of currencies and unlimited international transfers. As China has grown vastly richer it has become less dependent on Hong Kong for such purposes, but lots of investment into China still passes through the city. 

A takeover of Hong Kong by force would also destroy Beijing’s proposition – tattered as it may already be – that Taiwan should accept unification with China on the basis of one country, two systems. Recent events in Hong Kong have already strongly lifted the election prospects for the governing party in Taiwan, whose leader Tsai Ing-wen favours continued defiance of Beijing. 

Most unpredictable, though, is how this will play in China itself. A catastrophic crackdown in Hong Kong could go very badly for Xi, a leader who has tried to project an aura of resolve and near infallibility. Today Beijing trumpets that its 1.4 billion people stand united in their opposition to Hong Kong’s democracy movement. But that is a claim only sustainable in an environment of suffocating media control in China. 

If mass arrests or tanks were used to crush a protest movement aimed at securing democratic concessions, members of China’s own large and growing middle class would begin to see this not just as a defeat for Hong Kong, but as a loss for their own society as well.

More in the Guardian.

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Discussing the "Last Secret", 30 years after Tiananmen - Ian Johnson

Ian Johnson

Despite desperate efforts by the government to push the events of June 4, 1989, at Tiananmen Square into collective amnesia, new documents have shed light on the events. Journalist Ian Johnson reviews the latest publication, The Last Secret: The Final Documents from the June Fourth Crackdown, for the NY Review of Books, and summarize what we have been learning over the past 30 years.

Ian Johnson:

One of the strange phenomena of modern academia and journalism is that they sometimes fail to publish the obvious. In this case that would be a readable, accessible, and complete account of the June 4 massacre. Many worthwhile journalistic accounts appeared shortly after the event, but they are now at least twenty years out of date, and thus weren’t able to take into account the flood of memoirs and secret documents that have come out since then. These include The Tiananmen Papers (a collection of internal party documents recounting the events), Zhao (Ziyang)’s memoirs, Li Peng’s diaries, and works by former Chinese political advisers Wu Wei and Wu Guoguang. 

This makes Wu Yulun’s essay in The Last Secret of great value. It synthesizes much of this new material in trying to answer a basic question, encapsulated in the title of his essay: “How the Party Decided to Shoot Its People.” Like others, Wu argues that the massacre was the result of a series of mishaps that caused a manageable situation to spiral out of control. 

But Wu also makes a strong case that Deng favored some sort of forceful action from the start: this wasn’t an accident but an act of conviction. 

When the protests started after Hu’s death, Deng initially yielded to Zhao, whom he had supported and promoted for over a decade. Zhao realized it would be wrong to crack down on people mourning a former general secretary of the Communist Party, and so he counseled negotiation. But Deng seems to have lost patience as the protests continued. He was able to push his less tolerant approach after April 23, when Zhao went to North Korea on a week-long state visit. Zhao left explicit instructions with Premier Li Peng to follow his moderate course. According to Li’s diary, which Wu cites to great effect, Li agreed, but he also wrote that another senior leader “encouraged” him to meet Deng. 

Whether Li met Deng is unclear, but he seemed to have realized that Deng wanted a harder line. Li’s diary confirms that on April 24 he convened a meeting of leaders, making sure to exclude one of Zhao’s trusted lieutenants. The leaders ordered the party’s mouthpiece, People’s Daily, to issue a strongly worded editorial on April 26 condemning the protests as “turmoil.” 

Famously, the editorial backfired, and the next day more than 500,000 people surged into the square—as Wu Yulun puts it, this was “an unprecedented event in the history of the People’s Republic of China. For the first time in the Communist Party’s reign, people willfully took action against the wishes of the paramount leader.” Zhao records in his memoirs that when he returned to Beijing on April 30, Deng refused to see him—clearly he felt that Zhao had been following the wrong course. On May 2, Hong Kong’s Ming Pao newspaper, then a very reliable source of information on mainland politics, reported that Zhao was on his way out.

Much more in the NY Review of Books.

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Xi's road for China to become a global power - Arthur Kroeber

Arthur Kroeber

President Xi Jinping is effectively replacing former leader Deng Xiaoping as the thought leader of China's development, and he is well on his road to set the road for the country as a global power, says economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®, at Bloomberg.

Bloomberg:

When President Xi Jinping assumed power in 2013, many hoped he’d turn out to be a leader in Deng’s reformist vein. But while Deng wanted his market-based reforms to make China rich, Xi has reasserted the control of the state in an effort to turn the country into a political and technological superpower. 

“One of Xi’s overarching goals in terms of economic management is to effectively, if not formally, declare the end of the era of reform a la Deng Xiaoping,” said Arthur Kroeber, a founding partner and managing director at research firm Gavekal Dragonomics. Whereas Deng and subsequent leaders bolstered the role of private businesses in the economy and reduced that of the state, Xi seems to think the balance is now about right, Kroeber said.... 

The economy expanded 6.5 percent in the third quarter, the slowest pace since the aftermath of the global financial crisis in 2009. But if China can keep the rate above 5 percent well into the 2020s, per capita income levels will close the gap on developed nations, said Kroeber, who is the author of “China’s Economy: What Everyone Needs to Know.”

More at Bloomberg.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Xi Jinping ends the Deng Xiaoping reform era - Arthur Kroeber

Arthur Kroeber

China's former leader Deng Xiaoping has been celebrated as the architect of the country's economic reform. But current president Xi Jinping is no longer following Deng's track, but defines his own state-dominated economy, says economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®, to Bloomberg.

Bloomberg:

When President Xi Jinping assumed power in 2013, many hoped he’d turn out to be a leader in Deng’s reformist vein. But while Deng wanted his market-based reforms to make China rich, Xi has reasserted the control of the state in an effort to turn the country into a political and technological superpower. 

“One of Xi’s overarching goals in terms of economic management is to effectively, if not formally, declare the end of the era of reform a la Deng Xiaoping,” said Arthur Kroeber, a founding partner and managing director at research firm Gavekal Dragonomics. Whereas Deng and subsequent leaders bolstered the role of private businesses in the economy and reduced that of the state, Xi seems to think the balance is now about right, Kroeber said.

More in Bloomberg.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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Xi Jinping cannot change his China model, even when it is needed - Arthur Kroeber

Arthur Kroeber

China's president Xi Jinping has painted himself into a corner, summarizes the famous economist Arthur Kroeber, author of China's Economy: What Everyone Needs to Know®, the economic dilemma China finds itself in, according to NPR. "He cannot back down from his China Model."

NPR:

But Xi has dug in his heels, China’s economy continues to outpace much of the world, and China’s leader has continued to promote the state-heavy China model. “Xi has kind of painted himself into a corner,” says Arthur Kroeber, author of China’s Economy: What Everyone Needs to Know. “He’s said ‘We have this China model, it’s doing its own thing, China needs to become this great power.’ He can’t back down from that.” 

Kroeber says Xi’s style of leadership is a departure from former Chinese leader Deng Xiaoping, whose credo for dealing with the outside world was “Hide your strength and bide your time.” 

“The genius of Deng Xiaoping’s ‘hide and bide’ strategy is that it gives you a lot of freedom of movement,” says Kroeber. “You have not committed yourself to anything specific that it would be difficult to back down from.” 

Kroeber says the problem with Xi’s assertive style is that when he’s challenged, as he is now by Trump, he has to stand his ground, and that can become costly.

More at NPR. Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Are you looking for more strategic experts at the China Speakers Bureau? Do check out this list.

Why religion did not die out in communist China - Ian Johnson

Ian Johnson

China started - after initial suppression - to tolerate religion under Deng Xiaoping, as the communist rulers of the country expected religion was something for the older generation and would die out. Journalist Ian Johnson, author of The Souls of China: The Return of Religion After Mao explains in a Q&A to JWT Intelligence why they were wrong. And the implications for business.

JWT Intelligence:

Why was religion in China suppressed to begin with? 

It’s important to go back to before the communists, back to the 19th century when other countries were confronted with how to modernize. Many people felt religion was holding people back. In late 19th century China, some saw religion as a social ill, similar to footbinding or opium smoking. Buddhism, Daoism, folk religions were by and large suspect. Hundreds of thousands of temples were destroyed. When the communists took over in 1949, they carried it forward in more radical fashion. During Mao’s Cultural Revolution from 1966-1976, he banned all places of worship. Mao himself was almost like a god; the little red book almost like a bible. Then he died. 

Under Deng Xiaoping’s capital and economic reforms, control over a lot of society was loosened. He allowed seminaries to open, and monks, nurses and imams to be trained. It was thought that some old people still believed in religion and religions would slowly disappear. 

But they didn’t? 

No. As people got wealthier, there was a widespread perception that in China, there is a lack of shared values and China is in a sort of moral vacuum. We see this in social media—somebody is injured in the street and nobody helps them. There are food safety scandals. People are asking, “what sort of society have we become?” This is one of the reasons people are turning to religion. 

Now the government feels some religion can be useful, especially if it doesn’t have foreign ties. Some are viewed less favorably, like Islam and Christianity. But Buddhism and Daoism are now tolerated and even encouraged. This slow shift that began about 10 years ago really picked up pace under current President Xi Jinping. 

We see an explosion in the number of temples, churches and mosques paid for by ordinary people through donations. Religions are getting more active in proselytizing and even Buddhists and Daoists are trying to compete in this religious marketplace.

More in JWT Intelligence.

Ian Johnson is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

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How China´s social mobility came to a standstill - Zhang Lijia

Zhang Lijia

China has followed the lead by their former leader Deng Xiaoping to "become rich first". But while hundreds of millions have indeed become more wealthy, social mobility has stalled, writes journalist Zhang Lijia, author of the forthcoming book on prostitution in China Lotus: A Novel in the New York Times.

Zhang Lijia:

But after decades of breakneck economic growth, the country’s wealth has ceased trickling down, bringing social mobility to a standstill. Chinese people have fewer opportunities to move up the socioeconomic ladder. State-controlled capitalism and corruption have led to the demise of the Communist ideal of a classless society. 

A 2014 nationwide survey by a market-research company suggested that intergeneration mobility in China among the low- and lower-middle class has stagnated, and people from those groups had little confidence that they could improve their fate. Among those who self-identified as lower-middle class, 68 percent said their parents also belonged to the lower-middle class, and 87 percent of people in the lower class said their parents were in the same class. In short, the majority of lower class people in China are staying near the bottom of the class pyramid. 

A Stanford report from earlier this year echoes what Chinese social scientists have found: China ranks high among countries in which citizens earn close to what their parents had earned. It is a country with low “intergenerational earnings mobility,” meaning China’s younger people are likely to be in the same socioeconomic class as their parents. 

Research shows the bigger the income gap, the lower the social mobility. And the income gap has been widening steadily. A report from Peking University in January found China to be one of the most unequal societies in the world with the richest 1 percent holding a third of the country’s wealth. 

When the rungs of the income ladder grow farther apart, it’s more difficult for people to climb upward. 

While some 800 million people in China have been lifted out of poverty in the last few decades, the economic reforms have produced a new underclass of low-paid urban workers, including migrants from the country’s rural areas. The new lower class is stuck at the bottom.

More in the New York Times.

Zhang Lijia is a speaker at the China Speakers Bureau. Do you need her at your meeting or conference? Do get in touch or fill in our speakers´request form.

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Three questions on Xi Jinping's economic reform - Arthur Kroeber

+Arthur Kroeber 

Xi Jinping's ambitious reform program is answering some of the questions analyst have been asking since the new president took power, writes economist Arthur Kroeber for Brookings. Although his program might not satisfy market fundamentalists. 

Arthur Kroeber:

Those questions are, first, do Xi and his six colleagues on the Politburo standing committee have an accurate diagnosis of China’s structural economic and social ailments? Second, do they have sensible plans for addressing these problems? And third, do they have the political muscle to push reforms past entrenched resistance by big state owned enterprises (SOEs), tycoons, local government officials and other interest groups whose comfortable positions would be threatened by change? Until today, the consensus answers to the first two questions were “we’re not really sure,” and to the third, “quite possibly not.” 

These concerns are misplaced. It is clear that the full 60-point “Decision on Several Major Questions About Deepening Reform”[1] encompasses an ambitious agenda to restructure the roles of the government and the market. Combined with other actions from Xi’s first year in office – notably a surprisingly bold anti-corruption campaign – the reform program reveals Xi Jinping as a leader far more powerful and visionary than his predecessor Hu Jintao. He aims to redefine the basic functions of market and government, and in so doing establish himself as China’s most significant leader since Deng Xiaoping. Moreover, he is moving swiftly to establish the bureaucratic machinery that will enable him to overcome resistance and achieve his aims. It remains to be seen whether Xi can deliver on these grand ambitions, and whether his prescription will really prove the cure for China’s mounting social and economic ills. But one thing is for sure: Xi cannot be faulted for thinking too small... 

In short, there is plenty of evidence that Xi has an ambitious agenda for reforming China’s economic and governance structures, and the will and political craft to achieve many of his aims. His program may not satisfy market fundamentalists, and he certainly offers no hope for those who would like to see China become more democratic. But it is likely to be effective in sustaining the nation’s economic growth, and enabling the Communist Party to keep a comfortable grip on power.

Much more at the Brooking's website.

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form

China Weekly Hangout 

Labor camps, the one-child policy, hukou's, pollution, internet censorship, state-owned companies, energy policy: they are just a few of the subjects that appeared last week in the 21,000 character document released after the Third Plenum of the Communist Party, spelling out reform plans for the coming years. The +China Weekly Hangout plans to discuss some of those plans and will ask panelist whether the Third Plenum did bear a mouse or an elephant.
Pending a few logistical challenges, we will hold our online meeting on 21 November at 10pm Beijing time, 3pm CET and 9am EST. We will pick subjects, depending on the expertise of the people joining us on Thursday, and summarize with the question how likely it is president Xi Jinping will pull off the planned reforms.

You can read our announcement here or register at our event page for participation.

Is president Xi Jinping going to win the fight against corruption? +Chao Pan, +Steve Barru and +Harm Kiezebrink discussed at the +China Weekly Hangout on October 31 how the drive against corruption and political survival mix with each other. Moderation: +Fons Tuinstra of the China Speakers Bureau.

53 reasons I cannot believe in the upcoming collapse of China

Deng Xiaoping

When I arrived in China halfway the 1990s as a foreign correspondent, its former leader Deng Xiaoping was on his prolonged deathbed. Media headlines, and many informal meetings speculated on what would happen with China, when Deng would actually pass away. "It will be chaos, and China will collapse," was the standard opinion at the many meetings with foreign diplomats and business people I attended in my early days in China. It sounded all very convincing.
When Deng Xiaoping actually passed away in February 1997, I was just attending a huge and boring political meeting in Shanghai. At that stage I was just discovering that political meetings in China were not the best way to get information. So, after the news of Deng's death broke, I rushed to the office of the Ministry of Foreign affairs in Shanghai at the other side of the street, where I found my handler already standing on the stairs of their monumental building.
"Everything is normal in the country, there is no chaos," he told me without being asked. The fact he was heavily sweating and trembling did not make his message rather convincing.
But as it turned out, China did not turn into mayhem - at least not more than it was on a daily basis. And it did not collapse.
It was only the first of many of doomsday scenario's about China I met over the years. The handover of Hong Kong from Britain to China. Infighting in the Communist Party. Massive corruption scandals. Uproar in the country side. The real estate bubble. The dot.com crisis.  And more recently the Wukan rebellion. There was no shortage of theories predicting the next collapse of China.
Those theories had two elements in common. First, they were all very convincing. Second, they never materialized.
That turned me, after a few dozen failed theories, into a reversed cynic. No doomsday theory could convince me anymore. There was no shortage of giant problems in China. Whole industries, provinces and parts of the ruling system could collapse on a regular basis. But I could no longer be convinced about the collapse of China.
I was already in that state of mind when I met Gordon Chang for the first time, early this century, when he was preparing what turned out to be the first book on the Upcoming Collapse of China, an event he predicted for 2006. He was then still rather secretive about this upcoming book, so I could not really challenge his predictions at the time, but we did have a good laugh when the book hit the shelves.
I was not the only reversed cynic on the collapse of China. We admired Chang for his commercial take on setting his career: he was telling what at least a part of the US political scene loved to hear. But we did not take his prediction serious for one second.
So, five years passed, and the predicted collapse of China did not take place in 2006, or even up to 2011 the country failed to collapse. Just as many other reasons why China would collapse, Gordon Chang was just plain wrong in his prediction.
Even worse, I was right in my reversed cynicism, although predicting the survival of China is just not a good theme for a book.
Now, we wake up in 2012, and Gordon Chang announced in Foreign Policy he second edition of the Upcoming Collapse of China. The comments under the article predict that he new prediction might not be taken for granted by many, like it was a decade ago.
Telling fairy tells is a useful skill, and actually, one of these days, when doomsday scenario #83 turns out to be true, I'm on the wrong side of history as a reversed skeptic. China has collapsed a few times dramatically in its rich history, so it is a chance that might still become true.
But not now, and not very soon. And it is about time, Gordon Chang finds a new fairy tale to tell.

Five books on China's economy - Victor Shih

State-driven by Getty Images via @daylife

Leading political economist Victor Shih reviews five books he recommends on China's economy for The Browser. Number one is Huang Yasheng's Capitalism with Chinese Characteristics: Entrepreneurship and the State.
Victor Shih:

The biggest misperception about China is that it’s a dynamic market economy – it isn’t. It’s a fast-growing, state-dominated economy with some dynamic, private-market aspects. If you look at investment, a main driver of growth, much of it is going to state-owned enterprises (SOEs) or shareholding companies dominated by state entities. Or it’s going directly to government investments carried out at a central or local level. The misperception has abated recently following Richard McGregor’s book on the Chinese Communist Party. People are realising that the party is still behind much of what happens in China.

And on Huang's book:

Victor Shih by Fantake via Flickr

I think Yasheng goes a little too far with some of his claims. But the broad outline is correct. There was a period of healthy organic growth in the 80s, driven by the de facto private sector. Many township and village enterprises were collectives or owned by the local government. But in reality they were private enterprises. This changed in the mid-90s, especially with the adoption of the ‘grasping the large and letting the small go’ policy that circumvented the special interests in the state sector. When Deng Xiaoping was alive, his executive vice premier, Zhu Rongji, wanted to bankrupt or merge many of the smaller state-owned enterprises into larger ones. It was a political tactic to further reform. And it worked.

More in Tne Browser.

Victor Shih is a speaker at the China Speakers Bureau. When you need him at your meeting or conference, do get in touch.

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