Wen’s Reforms: Following In The Footsteps Of Zhu Rongji

Reconsidering the “Hu-Wen” notion

China watchers’ inclination to posit a new “Hu Jintao-Wen Jiabao” model of governance – a concept first put forward during the SARS outbreak in China last year – suggests the country’s newly-installed “fourth generation” leadership has broken with its predecessors and begun to take its own course. While there may be some general truth to this notion, it does not hold for the most important and far-reaching government reforms currently underway in China. Rather, it is more accurate to speak of a “Zhu-Wen” governance model, which underscores the continuing – but usually overlooked – influence of Zhu Rongji’s policies in defining Chinese political reform led at present by Premier Wen Jiabao.

The recent government reorganization launched by Wen Jiabao in 2003 directly inherits and implements most of Zhu Rongji’s 1998 reforms. As such, the recent policy changes are better seen as “old wine in new bottles,” and not truly fourth generation innovations. A greater appreciation of a “Zhu-Wen” model not only underscores the important legacy, good and bad, of Zhu Rongji, but also illuminates the struggles and successes in the as yet unsettled transition to a new generation of leaders in China.

Wen’s new initiatives

Several new regulatory commissions, such as the China Banking Regulatory Commission, were developed and implemented in the months following the approval of Wen’s government reorganization plan by the 10th National People’s Congress. [1] Because these changes took place at an unexpected pace, some observers attributed these policies to a distinctive new approach to “scientific and democratic governance” on the part of Wen. [2] However, these new entities, which many analysts accredited to Wen, were actually conceived, designed and all but established by Zhu before he stepped down. [3]

Furthermore, these regulatory commissions, which have responsibilities over a wide spectrum of fields ranging from state-owned enterprises to the banking sector, had been in development before Wen became a viable candidate for selection as premier. [4] At the time, Wen had neither the jurisdiction nor experience over such issues, making it unlikely that he played a key role in formulating these new bodies prior to Zhu’s retirement.

But Wen has his own political reasons for carrying on Zhu’s government reform efforts and not launching out on his own. Currently, Wen is being alienated from former president Jiang Zemin and his supporters, known as the “Shanghai clique.” In addition, many ministry heads, such as Bo Xilai, the minister of Commerce and the son of senior leader Bo Yibo, oppose reforms that might curb their wealth and influence. Wen did not spend the bulk of his career in ministries and thus lacks the connections with mid-level bureaucrats needed to push through such reforms. Meanwhile, Wen’s most powerful political ally, Hu Jintao, is preoccupied with emerging from Jiang’s shadow, which constrains his support for Wen. Unwilling to risk failure in his government reorganization effort, Wen proceeds with caution and follows in the footsteps of Zhu.

Wen also has Zhu to thank for clearing away many of the most difficult bureaucratic and special interest obstacles, such as detaching direct bureaucrat interests from state-own enterprises. Most importantly, Zhu elevated a group of competent civil servants to critical positions, such as Wu Yi, the vice premier who decisively carried out Wen’s policies during the SARS outbreak.

Wen Jiabao on Zhu Rongji’s Road

A closer look at Wen’s current policy measures shows that they are falling squarely within Zhu’s reform vision. The 1998 Zhu Rongji government reorganization can be divided into several parts: consolidating regulatory functions in regulatory commissions and downsizing the bureaucracy, opening government positions to outside experts, and strengthening administrative predictability and the rule of law.

In the first area of reform, Wen has actively applied Zhu’s “outside the system” approach in establishing independent regulatory bodies to oversee economic activity. Several regulatory commissions have been created since March 2003, and two new commissions, in telecommunications and communications, are reportedly in development. [5] For instance, the China Banking Regulatory Commission (CRBC) has absorbed the regulatory function of the People’s Bank of China. The CRBC does not fall under the jurisdiction of the Bank, but is placed directly under the scrutiny of the Premier and the State Council. This reform closely follows the pattern set by Zhu, as when he created the Security Regulatory Commission in 1998 to separate regulatory functions from the Bank of China.

In addition, Wen is following Zhu’s lead in seeking a reduction of eight more ministries, as outlined in Wen’s 2003 government reorganization proposal. [6] This would continue Zhu’s dramatic government downsizing of 1998, which cut fifty ministries and other central government agencies down to twenty-nine. These policy actions fall clearly within Zhu’s strategy on government reform: strengthen regulatory commissions under the Premier on the one hand while thinning ministry-level bodies and their power on the other.

In a second area of reform, Wen has adopted one of Zhu’s most progressive initiatives, the recruitment of independent specialists from outside of traditional government hiring channels. With the aim of hiring and retaining more competent civil servants, Zhu started appointing outside professionals to critical positions within his commissions. Along with a series of other reforms, including the civil service exam and the public selection of mid-level officials, Zhu was able to reposition senior officials and elevate an entire generation of civil servants who were attuned to his ideas. While major problems remain, Zhu modernized the seniority system to emphasize expertise in addition to tenure and political connections.

Wen endorsed Zhu’s strategy to both broaden consultation and promote outside professionals into government agencies by proposing a Taiwanese expert to a government panel. [7] Dai Lining, former administrative vice minister of finance in Taiwan, will sit on the new International Consultant Committee under the China Securities Regulatory Commission, along with eleven other members from the EU and the United States.

In the third reform, Wen is reenergizing several legislative initiatives introduced by Zhu. In response to widespread power shortages in the summer of 2004, Wen may reintroduce Zhu’s electricity industry regulation to the NPC, an effort Zhu was unable to achieve over resistance from powerful friends of the power industry, such as Li Peng. [8]

Looking ahead: Will Wen be his own man?

Wen has his own personal working style and will seek over time to introduce more of his own priorities in government reform. Zhu did not really tackle critical parts of the public sector – such as health care reform or problems with local-level government. Wen, who spent years working in northwestern rural China, is said to be more sensitive to the country’s social and rural challenges, and expected to focus more on these issues. Nevertheless, such steps should not be seen necessarily as “new” departures from Zhu’s overall reform strategy.

What distinguishes Zhu and Wen from their contemporaries, is the recognition of their genuine willingness and courage to do their best to achieve a better China by the Chinese people. At this stage, however, it is too early to judge Zhu’s possible contribution to the Chinese political system, and the final assessment for Zhu’s government reorganization will be largely determined by the ultimate outcome of Wen’s record. However, their political willingness to do some good for the laobaixing (the common person) alone has at least secured them high praise from the Chinese public.

The continuity of the “Zhu-Wen” approach reflects an overall desire to institutionalize a smooth succession process, in itself a noble goal given China’s succession troubles in the past. Although following in Zhu’s footsteps has so far assured Wen’s political survival in this transition period, the Zhu-Wen approach to engineering a “soft landing” for China’s economy may be challenged by the “Shanghai Clique,” prompting the question of whether Wen can assert his own leadership more forcefully. Wen’s prospects for another term as Premier, as well as for his policy achievements, still depend on his ability to develop a sophisticated and innovative approach to transforming the essence of Zhu’s strategic thinking to meet the increasingly complex and politicized challenges of China’s future.

Notes:

1. Li Rongrong, “Welcome to the Website of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC),”https://www.sasac.gov.cn/eng/zrzc.htm, March 21, 2004.

2. H. Lyman Miller, “The Hu-Wen Leadership at Six Months,” China Leadership Monitor 8 (2003).

3. Barry Naughton, “Government Reorganization: Liu Mingkang and Financial Restructuring,” China Leadership Monitor 7(2003).

4. Barry Naughton, “The Emergence of Wen Jia Bao,” China Leadership Monitor 6(2003).

5. Sun Chuanwei, “Zhu Rongji will address Wen Jiabao’s four points,” Zao Bao, March 5, 2004.

6. Xinhua News Agency,” Twenty Frequent Asked Question in Government Reorganization,” https://news.xinhuanet.com/zhengfu/2003-03/07/content_764697.htm March 7, 2003.

7. H. Lyman Miller, “Hu Leadership Focus on Compassionate Conservative Governance” China Leadership Monitor 6(2003).

8. Xinhua News Agency, “Controlling Electricity Demand Tops Priority,” China Daily, https://www.chinadaily.com/cn/english/doc/2004-07/29/content_352493.htm July 28,2004.