Zhu's new cabinet may herald political reforms


The Chinese parliament yesterday voted into office a new government team packed with technocrats loyal to the Premier, Mr Zhu Rongji, and dedicated to restructuring the state-run economic, financial and industrial system and making China a market-driven economic superpower.

The team was secretly selected by the Chinese Communist Party many days ago and submitted yesterday for endorsement, but its composition reveals that the leftists in the party have been routed by the reformers. This is particularly significant as unemployment is growing and radical reforms carry the risk of social unrest.

The National People's Congress also yesterday elected Mr Tang Jiaxuan (60) as the new Foreign Minister, replacing Mr Qian Qichen, who is retiring but remains on a vice-premier.

Mr Zhu (69), who says his main goal is to restructure big state enterprises and the debt-ridden financial system, was elected premier overwhelmingly by the 3,000 delegates on Tuesday.

Among the government line-up is his partner in financial reform, the central bank governor, Mr Dai Xianglong (54). Mr Dai has been making headway in removing the banking system from the control of party officials who dictate lending policies based on favouritism rather than risk assessment. The People's Bank of China is to be reorganised along the lines of the US Federal Reserve.

The new Finance Minister, Mr Xiang Huaicheng (59), had as tax commissioner inaugurated a long-overdue overhaul of the taxation system to bring it into line with international practice.

Another ally of the new premier, Mr Wang Zhongyu (65), was elected secretary-general of the State Council, a crucial post for carrying out structural reform.

The reforms have been given greater urgency by the Asian financial crisis, which exposed the vulnerability of economies with overdrawn banks and debt-laden industries.

"All these people have been following Zhu Rongji in controlling the macro economy," said Mr Zhong Xueyi, a professor of economics at the Chinese Academy of Social Sciences and a parliamentary delegate. "This shows a continuation of economic policy. They are technocrats," he said. Gen Chi Haotian (68) stayed on as Defence Minister.

China is now about to go down the road of political reform too, according to one of Beijing's top Communist Party theoreticians. The ice had been broken and reform would now charge ahead like the "flow of a turbulent river in springtime", said Mr Xing Bensi, vice-president of the Chinese Communist Party School. The aim was to build a "democratic socialist country ruled by law", incorporating the best of Western-style democracy.

"The arrow is ready to be released now that it has been put on the bow," he said.

A Hong Kong-based human rights group yesterday made public a letter by 12 Chinese dissidents urging Mr Zhu to push for more media freedom and democracy. The dissidents, from the eastern province of Zhejiang, warned that without political reforms, problems such as rising unemployment and corruption would hinder economic development.