Zhu Rongji's Legacy

Former Chinese premier Zhu Rongji (朱鎔基) was semi controversial during the time when he was premier.

According to a 2003 article titled Beijing autocrat leaves behind debt and doubt, Jasper Becker suggested that "Zhu's worst legacy may be the high esteem that many younger Chinese now have for his brand of strong authoritarian leadership and for the merits of heavy-handed state intervention and big government spending."

Arguing that the state debt that accumulated under Zhu was enormous and hard to determine, Becker noted that the former premier used state banks to finance what should be government spending. Zhu also left his successor Wen Jiabao (温家宝) to cope with some $450 billion in non-performing loans, while unsecured state pensions and other liabilities were said to have raised the government's total bill by two or three times that amount.

By the time he stepped down, Zhu was said to have failed in his efforts to build a social welfare infrastructure for city dwellers, and farmers were still not given legal title to the land they farm.

During his tenure, Zhu kept the state sector going by aggressively injecting money raised on domestic and overseas stock markets. And when the Asian Financial Crisis hit in 1997 and Chinese jobs were lost, Zhu responded by launching "wave after wave of huge infrastructure projects" to stimulate the economy. He also spurred housing privatization, and unleashed a construction boom.

As Becker noted: "To help raise China's prestige and encourage an economic recovery in East Asia, Zhu resisted pressure from domestic groups to follow neighboring countries in devaluing the currency. The cost has been high, especially in rural China, where neither wages nor incomes have risen for more than seven years."

"Zhu got away with a lot through bluster and bluffing. For example, he manipulated statistics so that they showed the economy was growing at around 8 per cent in 1998, although it was barely growing at all."

Likewise, Zhu's claims that the state sector had been restored to profitability in just three years and that the size of the bureaucracy had been halved were said to be doubtful. "More likely is that the officials are still on the state payroll, just doing different jobs," according to Becker.

As Becker concluded: "Zhu boasted in 2002 that he had saved the Chinese economy from collapse. While he did stave off fresh political upheavals, the day of reckoning may only have been postponed."

Oh well.

Interestingly, the austerity measures spearheaded by Zhu in the mid-1990s were said to be so severe that there were "believable rumors" that he and his family members had narrowly escaped assassination attacks.

At least now Zhu can live in peace, serenity, and with no fear of assassinations.