'Revolutionary' Sets China on a New Path

In another sign that the times are changing in China, a onetime "enemy of the people" has been elevated to the nation's second-most powerful post.

Zhu Rongji - for two decades labeled an "antisocialist rightist" - was made prime minister March 17 with the ironic mandate to break the Communist Party's hold over the economy and transform China into a largely capitalist superpower.

"Zhu Rongji might someday be called the leading force behind China's 21st-century rise, but he faces enormous dangers," says a senior official in Beijing.

Mr. Zhu will be in charge of dismantling many ailing state-run firms, refashioning shaky banks, and chopping away at the massive bureaucracy. Last week, he unveiled plans to abolish more than 10 ministries that for decades micromanaged the production and sale of everything from electricity to chemicals to machines.

Half of the central government's 8 million bureaucrats are slated to receive pink slips and that has many party cadres seeing red. Zhu is making enemies high and low, and if any of his reforms falter, "the disgruntled are likely to pounce on him," says the official.

Even the official China Daily called the government downsizing "a revolution," but added "measures will be adopted to avoid social shocks."

More than half of China's state-run companies are losing money, and the ranks of the unemployed are climbing, says legislator Dong Fureng. He estimates nearly 20 million urban workers are jobless.

Zhu hopes to pacify this growing army of surplus labor by setting up a new Ministry of Labor and Social Security, but today "less than half of the jobless receive unemployment benefits," Mr. Dong says.

Zhu has outlined a basket of measures that include everything from privatizing state companies to refinancing banks, and his image as a one-man dynamo inspires admiration among private entrepreneurs and party reformists.

"If anyone can fuel China's economic revival and push toward capitalism, it is Zhu Rongji," says the manager of a Beijing computer firm.

Zhu has proved to be an economic jack-of-all-trades since joining the central government in 1991. When stock markets threatened to overheat and inflation climbed above 20 percent, Zhu had himself appointed China's top central banker and securities regulator, and single-handedly piloted a soft landing.

"Considering his background, it would be putting it mildly to say that he is not your run-of-the-mill party leader," says the senior official in Beijing. "Zhu will never forget the decades the party punished him, and it is hard to say how far he might go to shake up the organization that once banished him to the countryside," he adds.

Six years after graduating from prestigious Tsinghua University, Zhu made the mistake of heeding Chairman Mao Zedong's call to point out the party's faults in what was billed as "The Hundred Flowers Campaign." Mao used the movement to launch a witch hunt for enemies of the party, and Zhu was caught in the political dragnet.

"In 1957, Zhu was denounced as a 'rightist' for a three-minute-long speech of well-meaning criticism," and was not rehabilitated until 22 years later, says the official New China News Agency.

Premier Zhu, who is praised by Western bankers and business leaders for his grasp of market economics, cosmopolitan grace, and fluent English, could not stand in greater contrast to his Soviet-educated predecessor, hard-liner Li Peng.

Zhu had his first brush with politics while at American-founded Tsinghua University, where he joined protests against the Nationalist Party in the 1940s. Li Peng spent his youth in the caves of Yan'an, Chairman Mao's primitive headquarters during the Chinese civil war, and later trained at the Moscow Power Institute.

Like most liberal intellectuals, Zhu was exiled to the Chinese hinterland during the Cultural Revolution. Li rose steadily in the party and in 1989 defended its rule by imposing martial law on Beijing to oust student protesters from Tiananmen Square.

Faced with similar protests in Shanghai, then-Mayor Zhu "came on television and pleaded with students to return to their campuses," says a Western diplomat. "Zhu succeeded in peacefully defusing the conflict."