BEIJING: Zhu Rongji, who as China’s premier pushed through reforms at state-owned companies that cost tens of millions of workers their jobs, and who helped engineer China’s entry into the World Trade Organization, has died. He was 98.
The former senior leader died in Beijing on Wednesday (Aug 12) morning after medical treatment for an unspecified illness failed, the official Xinhua News Agency reported.
Zhu helped steer the country through a series of shocks including the 1997 Asian financial crisis and double-digit inflation as China’s top economic planner before becoming premier in 1998, a post he held until 2003.
He overhauled many of China’s state-owned enterprises, closing down tens of thousands of inefficient or badly performing telephone operators, banks, oil producers and other companies to deal with rising debt and encourage growth through the private sector.
Successive administrations pursued a different strategy, most recently with President Xi Jinping advocating a "stronger, better, and bigger” state-controlled economy to better serve national strategic interests.
"This was someone who was not afraid to make a difficult decision,” John Thornton, the former co-president of Goldman Sachs Group Inc., said of Zhu, whom he met in the mid-1990s.
Thornton, a New York-based investment banker, was the lead manager for the October 1997 Hong Kong share sale of the company that became China Mobile Ltd. Only months after the territory’s return to Chinese rule, Zhu wanted to show the world that the former British colony would retain its capitalist nature and prosper from its new tie to the mainland, Thornton recalled.
Goldman Sachs gathered China Mobile executives - then called China Telecom (Hong Kong) - on the southern island of Hainan and brought in Deutsche Telekom AG experts to show how to set up units such as finance and marketing departments. Zhu kept tabs on the meeting, peppering the executives with questions and displaying a mastery of detail.
"We’d answered these questions many times before, but usually you don’t get these questions from the premier of a country,” Thornton said.
"Usually you get these kind of questions from the chief financial officer of a company or the chief executive.”
Economic reforms
As governor of the People’s Bank of China from 1993 to 1995, Zhu further opened China to foreign investors by introducing pilot programmes for overseas financial firms and holding its first worldwide bond sale.
Zhu oversaw the creation of asset-management companies in 1999 to buy 1.4 trillion yuan (US$220 billion) in bad loans from the top four Chinese banks, which had been struggling to deal with them, and sought to keep them from lending more to unprofitable state-owned enterprises. The actions were essential to allow the banks to clean up their balance sheets and go public, starting in 2005, and become more market oriented.
Deng Xiaoping, the former Chinese leader, called him a "rare talent” who understood the economy and dared to take on challenges and face hardships.
In 2000, he met with then-European Union Trade Commissioner Pascal Lamy in Beijing to help break a deadlock in talks, which led to China joining the WTO the following year.
China’s GDP has increased 11-fold since then to become the world’s second-largest economy. However, trade partners have criticized Beijing for not playing by the rules with such tactics as subsidising domestic companies and putting up informal barriers to imports as well as intellectual property theft.
Zhu led an anti-corruption campaign as premier and also worked to trim the government bureaucracy. His efforts to cut red tape and reduce the number of official approvals earned him the nickname "one-chop Zhu,” a reference to the "chops,” or official seals, used in China to sign documents.
He impressed foreign leaders with his fluent English and sense of humour. In 1999, during a joint Washington press conference with US President Bill Clinton, Zhu responded to allegations that China had made political contributions to the Democratic Party.
"This shows that some Americans really have underestimated us,” Zhu said. "If political contributions could really be effective, and I have $146 billion of foreign-exchange reserves, I could take out at least $10 billion for this purpose. Why just $300,000?”
"That would be too foolish!” Zhu said to laughter and scattered applause.
After handing the premiership to Wen Jiabao in 2003, Zhu spent his time helping to raise the international stature of his alma mater - Beijing’s Tsinghua University - and made donations to rural schools from his book royalties.
Political journey
Zhu was born in October 1928 in Hunan province in southern China, according to his official biography. He attended Tsinghua from 1947 to 1951, majoring in electrical engineering, and joining the Communist Party in October 1949. That was the month when Chairman Mao Zedong, who was also from Hunan, proclaimed the founding of the People’s Republic.
Zhu worked for the state planning agency from 1952 to 1969. He criticised Mao’s economic policies during the Hundred Flowers Campaign, a brief period when freedom of speech was encouraged, saying they led to irrational high growth.
Zhu was labelled a "rightist” and demoted. He later spent spent five years working on a farm, raising pigs and planting rice, during the Cultural Revolution.
After being rehabilitated in 1978, Zhu rose through the ranks of government agencies and was named Shanghai’s mayor in 1987 and a vice premier in 1991. He became a member of the ruling Politburo’s elite Standing Committee in 1992.
"I only hope that after I leave office, the Chinese people will say that he was a clean official, not a corrupt one. I would be very satisfied,” Zhu said during a national legislature session in 2000.
"If they are more generous and say that Zhu Rongji got some real things done, then I’d thank heaven and Earth.”
Zhu had two children with his wife, Lao An. Levin Zhu, his son, headed China International Capital Corp, a Beijing-based investment bank from the early 2000s to 2014, and his daughter, Zhu Yanlai, held a number of top management positions at Bank of China (Hong Kong). - Bloomberg
