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ASIA
FEBRUARY 22, 1999 VOL. 153 NO. 7
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Jiang's real focus, however, is not on these issues. It is on the domestic economy. He, Premier Zhu Rongji and the leadership around them are worried that without continued high growth, China might revert to the chaos he witnessed during the Cultural Revolution. "It's the economy, stupid!" could just as easily be Jiang's mantra as Clinton's. His prescription--which sometimes strikes me as too much of a contradiction in terms to work--is for a "socialist market economy," in which free markets and free ideas are encouraged until things get boisterous or too messy. Then central planners step in and there are crackdowns on profiteers and dissidents until things settle down.
If China gets the economy right, Jiang believes, everything else will work out. America, he implies, would see a society it can embrace. But he acknowledges that China's problems are huge. Unemployment in the cities is at record levels and is getting worse. Many of the people who do work are employed in inefficient state-owned enterprises, which Jiang and Zhu have vowed to phase out. Jiang realizes that the phase-out has to be handled carefully, since there is no national unemployment insurance or pension system and no money to fund such programs. Already there has been unrest, as worried farmers and workers struggle with the new order.
Chinese planners say they need annual growth of 8% to make progress on their problems, and they acknowledge that growth fell below that level last year. Though there is pressure on China to devalue its currency--a cheaper renminbi would help revitalize exports--Jiang insisted that "the currency will stay stable. At the moment I can still feel confident about this."
While recognizing how much China still needs to accomplish, Jiang, 72, is beginning to think about his legacy and about the leaders who will follow him. In the two decades since the socialist market economy was introduced, "we have embarked on a new era," he said. "Deng Xiaoping taught us that China needs to open its doors and establish economic links with the capitalist, developed world."
China may not always operate in ways that please us, and a three-hour dinner, no matter how candid the conversation, will never answer all one's questions. But it is important that we come to view China as more ally than enemy. The stronger China becomes economically, the better it will be for both our countries.
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