Eight months after Paramount Leader Deng Xiaoping’s death, Jiang has consolidated power. Out are his two biggest Politburo rivals, both veterans of a collective leadership that once vetted his every action. That leaves just two Politburo heavyweights at Jiang’s side–Prime Minister Li Peng and Deputy Prime Minister Zhu Rongji–both allies. Liu’s ouster removes the People’s Liberation Army from the party’s all-powerful Standing Committee, while Qiao’s opens a vacancy at the head of China’s legislature, the National Peo- ple’s Congress. ““Jiang got what he wanted,’’ says Georgetown University’s Wang Chi. ““There’s no second voice in the leadership.''
Jiang’s strongman aspirations are incompatible with the modern economy he hopes to create. Even as he pushed the congress to adopt his economic program last week, he demanded absolute loyalty from the party’s 56-million-strong rank and file, and railed against ““bourgeois liberalization,’’ code for multiparty democracy and the rule of law. Like Deng, Jiang seems both enthralled by free markets and unwilling to countenance the political change necessary to make them work.
Yet Jiang’s strategy hinges on the most radical economic reforms ever put forth by a communist power. He proposes shrinking the government’s stake in China’s economy through bankruptcies, mergers and even privatization. The plan relinquishes state control over all but a few thousand ““strategic’’ companies. It would force more than 100,000 others to make it on their own. Inferior enterprises must be eliminated,’’ says Wang Zhongyu, chairman of the State Economic and Trade Commission. ““That’s the law of the market.’’ Jiang’s plan condones partnerships, sell-offs and a ““joint stock system’’ whereby firms sell assets or float shares, even to foreigners. Workers should brace for ““temporary difficulties.''
In some respects, the plan merely acknowledges economic facts on the ground. Hardship is a way of life in most of China’s 118,000 state-owned industrial enterprises. Many have cut salaries, forced workers as young as 35 to retire and begun paying staff starvation wages to stay home–tactics that mask unemployment, now believed to top 30 percent in some cities. An estimated 30 million urban workers face layoffs under Jiang’s proposed restructuring, but handing pink slips to so many would exacerbate labor unrest already festering across China. Keeping them on payrolls, however, risks sinking China’s entire economy. In 1994 unpaid state enterprise debt hit $96 billion, or 18 times yearly profits, and by one estimate half of all household savings now goes to state-owned factories. A debt crisis would threaten every passbook in the country.
Whatever risks lurk in the economic- reform plan, Jiang’s political viability no longer seems in doubt. Once he was derided as a benchwarmer; last week a senior Clinton administration official said he is ““clearly not a transitional figure.’’ His bold power play raised expectations that he might arrive in Washington next month for a summit with President Clinton prepared to make concessions in areas that so far have vexed negotiators: nuclear proliferation, human rights and trade. ““He’s showing his confidence; he’s cocky,’’ said another administration official. Jiang wants to be seen as another Mao or Deng. He could be set for a long run. But if he truly hopes to fill the shoes of China’s late great leaders, he must ultimately address a core issue: redefining Chinese socialism.
