`One Chop Zhu', our favourite Communist

AT A conference for China's senior provincial state bankers in Peking last year, Zhu Rongji was in full flow, detailing the urgent reforms needed for the country's creaking banking sector. Then he suddenly paused. "Another problem," he thundered, "is that I hear that some people have been using my name and claiming that they know me." Mr Zhu pointed to one hapless state bank official sitting in the audience. "For instance, I've heard that you've been saying that you are a good friend of mine. Well, let me tell you, I don't know you."

In a country where influence-peddling is a way of life, Mr Zhu has no time for saving the face of incompetent Chinese cadres, but he is certainly the man everyone wants to know. When President Clinton arrives in China next Thursday, his official host will be China's president, Jiang Zemin. But the person who can tell Mr Clinton whether China can possibly negotiate the financial turmoil in Asia is Mr Zhu, who will be celebrating his first 100 days as China's new prime minister.

On his appointment, Mr Zhu vowed that, "No matter what is awaiting me, whether it be landmines or an abyss, I will blaze my trail." And, as millions of Chinese are discovering, the trail-blazing Mr Zhu is doing just that.

His reform policies will throw tens of millions out of work and dismantle what is left of the Communist welfare system. And yet 69-year-old Zhu is probably the only Chinese politician admired and respected by ordinary Chinese people. In recent weeks, the news-stands have been stacked with magazines devoted to "The Grand Master of Governance", with story lines such as "The Iron Fist of Reform" (over a magazine cover showing a picture of Mr Zhu smashing his fist on the table), and "Zhu Rongji Radiates Glamour".

No-one ever said that about his predecessor, Li Peng, whose official biography stressed that he "always helped with the household chores". Mr Zhu has more important chores, such as fending off the many enemies of his governmental clear-out. "I have prepared 100 coffins," he has said. "Ninety-nine for the corrupt officials, and one for myself."

The Zhu blueprint is bold in the extreme, cutting the number of ministries from 40 to 29, and slashing the number of central and local government civil servants by half. China's loss-making state sector, which the government admits has 37 million surplus workers, is in for a similar overhaul. Added to that are plans to scrap subsidised housing, introduce private medical insurance, and reorganise an insolvent banking system.

The real test of Mr Zhu is whether he can actually implement this programme, especially during a regional economic crisis. In his favour are his credentials as the most accomplished technocrat in the top leadership.

David Shambaugh, a China specialist at George Washington University, says: "Zhu's style is markedly different from other communist leaders. He is blunt, direct, self-assured, and decisive."

Denis Simon, head of Andersen Consulting in China, agrees: "What makes Zhu Rongji a strong leader is not so much that he has a model of change, it's that this is a guy who really wants to see change happen ... I think we have a kind of Trumanesque person in charge in China, one who says the buck stops here."

Compared with his lacklustre colleagues, Mr Zhu is now every Western statesman's favorite Chinese leader. Tony Blair, who met the new Chinese prime minister in London earlier this year, was said to have been "in no doubt that he was in the company of a fellow moderniser" and "fascinated" by Mr Zhu. The US Secretary of State, Madeleine Albright, described him as "very, very forward-looking".

Seasoned China-watchers offer a more balanced view. Gerald Segal, at the International Institute for Strategic Studies, says: "Mr Zhu's first 100 days have been mediocre in terms of domestic politics, but he has played a blinder in foreign policy and general public relations. The outside world loves him and his spin control on the question of the risks of devaluation being blamed on Japan are wonderful to behold - albeit bogus in reality."

Mr Zhu's personal history may explain his singular political style. He was born in 1928 in southern Hunan province, the home province of Mao Zedong, studied engineering at the prestigious Qinghua University, and joined the Communist Party in 1949, the year the People's Republic was established. In 1957 he fell foul of the party hardliners during the "Anti- Rightist" movement, after reportedly criticising the Chinese system and praising Hungary and Yugoslavia's brands of reformist communist economics.

Mr Zhu is the only senior Chinese leader to have such a politically incorrect background, and when asked about it at his inaugural press conference in March, he said bluntly: "I learned a lot from that experience, but that experience was also unpleasant, so I don't want to mention it now." During the Cultural Revolution he was sent to the countryside for five years, and was not finally rehabilitated until 1979.

In the reform era of Deng Xiaoping, Mr Zhu soon proved himself at the State Economic Commission. In 1988 he was appointed mayor of Shanghai, and immediately pledged to boost the city's backward economy, cut red- tape, and halt expense-account banqueting by city officials. He even sent the top tourism bureau officials out to clean the city's filthy public lavatories. He was nick-named "One Chop Zhu" for cutting through the bureaucracy for foreign investors; China-watchers called him "China's Gorbachev", a sobriquet he has always despised as a political liability.

Immediately after the 4 June 1989 Tiananmen massacre, when Shanghai was in the grip of huge demonstrations, streets were barricaded, and public transport at a halt, Mr Zhu went on television and calmed the situation by telling the city he had "never considered using troops or exercising any military control". It would be a mistake, however, to conclude that Mr Zhu could be a closet political liberal; he has stuck firmly by the party line on Tiananmen and other human rights issues.

After the 1989 crisis, Mr Zhu's rise was swift. In 1992, already a deputy prime minister, he was catapulted into the top-level Standing Committee of the Chinese Communist Party in charge of the economy. The following year, with inflation heading for 25 per cent in the cities, Mr Zhu launched the savage austerity programme which brought the over-heated economy under control and put his stamp on policy.

Since his ascendancy, there has been nothing a provincial cadre has dreaded so much as an inspection tour by Mr Zhu. In 1994, on a trip to Heilongjiang province, Mr Zhu locked horns with the provincial party boss - and fired him on the spot. On another provincial visit, he noticed that a local official was wearing an expensive watch well beyond the means of his salary - and sacked him for corruption. Mr Zhu has instructed that banquets for him be limited to one soup and four dishes, instead of the lavish eating at public expense which most government employees go in for.

All that still leaves the question of whether Mr Zhu can achieve his goals. Reform of the banks has started, but the civil service is resisting the swingeing cuts in staffing. And the deadline for housing reforms in Peking has been delayed because newly-redundant workers are angry at being charged more rent. As Dr Simon observes, "Basically what he has done is create a whole group of losers - people who have lost their jobs or their prerogatives and perks. So it's a very dangerous, risky endeavour."

Foreign politicians such as Mr Clinton, who endorse Mr Zhu's project, would do well to remember the power structures of the Chinese political system. Mr Shambaugh cautions: "Mr Zhu is personally extremely vulnerable politically. He has no real patron to protect him, no real clients below him, no bureaucratic base, no ties with the military, has stepped on many toes to get where he is, and has the one policy portfolio that really runs a risk of trouble in the months and years ahead."

If Mr Zhu's bold plans can be put into place without causing a social upheaval, he will emerge as the master technocrat of China in the 21st century. But if his restructuring comes badly unstuck, President Jiang and the other top leaders will swiftly distance themselves from the chief architect of the radical reforms, and Mr Zhu will end his career as a political fall-guy.