New Man to Change China
Zhu Rongji, Beijing's current master reformer and likely next prime minister, is charging forward like a bull in China's shops.
That wordplay happens to apply on several levels.
Mr. Zhu, like his reforming predecessor Deng Xiaoping, was twice bounced from power and sent into rural exile. So he has been moving with the focused energy of a testy bull, making up for lost time as he moves to streamline and privatize China's vast, money-losing state industry sector. And it isn't just huge, overstaffed, inefficient businesses like the world's largest steel industry that he's after. Among the 370,000 state-owned enterprises he plans to shrink, close, or convert to private firms are many that would literally qualify as China shops.
Finally, Zhu is a bull in the sense that he's optimistic about succeeding.
It's now 20 years since Deng, the wily, bridge-playing, practical-minded boss from Sichuan plunged one-fifth of humanity into economic reform - turning the Communist revolution on its head. At each stage of this great reform period, veteran China hands have often wrongly doubted the likelihood of success. Some outside mandarins of China studies have seen so many great leaps stumble that they have become chronic pessimists.
Zhu meets similar doubts. And it's true that he faces a daunting task. Millions of Chinese will be thrown out of work when dinosaur state firms shrink, close, must pay down debt, and compete. They will hit the job market as tens of thousands are mustered out by a streamlining Army. To provide new jobs, incentives will be needed to create small firms by the hundreds of thousands. Those firms should rise in response to consumer and business needs. State make-work jobs won't do, or China will risk slipping back to where it started.
Part of the job facing the brilliant, blunt Zhu will be freeing capital for loans to start and expand private businesses. That means diverting money that banks now lend to state firms.
Another task will be expanding China's export earnings in the face of rising competition from neighbors. Their devalued currencies will give them a competitive advantage. Furthermore, Asian economic troubles may dry up some investment capital flowing into China from Thailand, Singapore, et al.
To provide for these money needs, Mr. Zhu must persuade high-saving Chinese to (1) invest their nest eggs in Chinese corporate bonds and stocks, and (2) buy more domestic goods and services. Zhu, orphaned early in provincial Hunan and savvy from his exile experience working in a public canteen and raising pigs, should have a feel for selling the public such ideas.
He certainly deserves active cooperation and support from the US, Japan, and Europe. As the clich goes, he's a man they will find they can do business with.