Global Policy Forum

By Jeremy Page

China's Premier Zhu Rongji pledged Tuesday to fight rural poverty, support the urban unemployed and stamp out official corruption and waste as he began his final year in government office. Zhu, in a speech to parliament, highlighted the biggest threats to the Communist Party's grip on power as China braces for its first full year in the World Trade Organization in the run-up to a sensitive leadership change.

The straight-talking premier lambasted corrupt and wasteful bureaucrats who wined and dined while farmers toiled under crippling local government levies and retrenched workers struggled to survive without social security benefits. In his work report to the annual two-week session of the National People's Congress (NPC), Zhu also stressed the need for stable relations with Taiwan before the leadership change by pledging to expand political and economic exchanges.

And he promoted a controversial plan put forward by President Jiang Zemin to allow private entrepreneurs into the Communist Party in a bid to make it more relevant to modern China.

Zhu, Jiang and NPC chief Li Peng are expected to step down from their Communist Party posts at a five-yearly congress later this year and leave their government jobs at the NPC in 2003.

"The year 2002 is a very important year in the development of our party and country," Zhu told the meeting of some 3,000 lawmakers from across China in the Great Hall of the People. "China's accession to WTO benefits its reform and opening up and its economic development as a whole, but in the short term, less competitive industries and enterprises face significant challenges," Zhu said."

Analysts say the government needs to deliver growth of around seven percent a year to create enough jobs to deter social upheaval as an onslaught of foreign competition following China's WTO entry threatens to put tens of millions out of work.

Helping the Poor

Zhu said the key to growth in 2002 was boosting domestic demand by raising the incomes of rural and urban poor.

"The most pressing task is to ensure that subsistence allowances for laid-off workers from state-owned enterprises and basic pensions for retirees are paid on time and in full," he said. "We will not allow new arrears to occur anywhere."

Redundant workers and pensioners have held increasingly frequent and angry protests over inadequate welfare support while farmers have attacked local officials for imposing random levies. In the countryside, a pilot project to replace the levies with a flat tax would be expanded to key provinces, Zhu said.

His speech struck a chord with delegates worried about how China's industry and agriculture will cope with WTO membership.

"We're pleased that this year Zhu Rongji's report talked most about agriculture and unemployment benefits," said Wei Meifen from the poor southwestern province of Guangxi, dressed in the pink embroidered costume of the Zhuang ethnic minority.

"After WTO farmers are going to have a big problem," said He Shulan from Heilongjiang, a northeastern agricultural province. "China will have to guide the agricultural sector closely as they search for a solution and try to go onto the world market."

Analysts said Zhu's speech addressed concerns that the party had forsaken farmers and workers in favor of the business elite. "Particularly the rural incomes, I think, is going to be the big thing, because of all the criticism that the party is deviating," said one Western diplomat who listened to the speech.

"You have concerns about party stability, you have concerns about social stability and therefore you have to look at ways of reducing the impact of WTO accession on reform of the economy."

Tirade on Corruption

Zhu also won points for a searing attack on official graft, listed as the number one public concern in a survey last week in the People's Daily, the Communist Party newspaper.

"Officials use public funds for wining and dining, extravagant entertainment and private travel abroad," Zhu said. "This misconduct invariably consumes large sums of money, so we must resolutely stop this tendency." Nicknamed "Boss Zhu" for his no-nonsense work style, Zhu once fired an official who brandished a glitzy cigarette lighter he could not have afforded on meager government pay.

"Extravagance and waste is widespread," said economist Bu Deying at the State Information Center, a government think-tank. "This phenomenon could trigger many social problems in a period of economic adjustments when there are many laid-off workers and farmers' incomes are low."

Zhu called for direct trade, transport and postal links with Taiwan, reflecting Beijing's softer line on the island this year. "We are working to further expand the cross-Strait economic and cultural exchanges and develop cross-Strait relations so as to establish the 'three direct links' as soon as possible," he said. Zhu repeated Beijing's precondition for official negotiations -- that Taiwan accept the "one China" principle. But in another conciliatory gesture, he defined the principle as "There is only one China in the world and the Chinese mainland and Taiwan both belong to one China" -- implying equal status. Previous definitions asserted that Beijing was the only legitimate government of a single China that included Taiwan. Zhu did not repeat Beijing's threat to invade Taiwan if the island declared independence or dragged its feet on unification. China regards Taiwan as a rebel province that must eventually be reunified with the mainland, by force if necessary.

Taiwan welcomed Rongji's overtures but said there should not be any preconditions. "The resumption of dialogue should be under the principle of equality and fairness," Taiwan foreign ministry spokeswoman Chang Siao-yue told Reuters in Taipei.

FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C íŸ 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.