Several sources said it was the prime minister’s own decision to make himself scarce after the breakthrough, allowing Jiang to claim the spotlight. The blunt and assertive Zhu, 71, has already become the focus of criticism from nationalists who think the WTO will infringe on Chinese sovereignty and from vested economic interests threatened by foreign competition. The chief U.S. negotiator, Trade Representative Charlene Barshefsky, said she was pleased that “Jiang immediately took ownership” of the agreement. But his P.M. took most of the risk. “Zhu has been willing to sacrifice himself to promote reform,” says Chinese political analyst Wang Shan, who calls entry into the WTO “the most important such event since Deng Xiaoping launched China’s open-door reforms” in 1978.
Zhu apparently believes that membership in the WTO is the best way to revive flagging economic reforms and foreign investment in China. An official think tank predicts entry will add a full percentage point to the country’s annual growth rate. If they are implemented properly–a very big if–the terms of the deal will reverberate deep inside Chinese society. Already, Yuppies in Beijing and other cities are excitedly planning to buy cheaper cars with foreign auto financing, to shelter their savings in the greater safety of foreign banks and to log on to America Online–options they never had before. Telecommunication has been a particularly sore subject in China, with the minister who oversees the industry, Wu Jichuan, fighting to protect the backward, state-run China Telecom from foreign competitors. Last week Internet chat rooms exploded with WTO buzz; a popular portal called sina.com recorded 1.5 million hits in 24 hours. One visitor pleaded: “Americans, please come soon! One hundred million China Telecom clients wait for you to rescue us from this burning hell!”
If handled well, the WTO’s terms will help China become more competitive, more modern, even more pluralistic. If managed poorly, the country could face an explosion of rural poverty and the disintegration of central control. “China could become like Indonesia–except much, much worse,” warns an economist in Beijing. For the moment, the optimists are carrying the day. In a recent survey of city dwellers, more than 62 percent approved of the deal, while less than 5 percent opposed it. Yang Dali, a China-born political scientist at the University of Chicago, says the most important aspect of the agreement may be “the emphasis on rules–global rules at that, subject to adjudication by third parties in Geneva.”
Yet even Zhu’s supporters acknowledge that China could be in for severe stress. Unemployment is expected to rise after China joins the WTO, with uncompetitive state-owned enterprises laying off more workers. And because last week’s agreement gives American agricultural products much more access to the Chinese market, millions of Chinese farmers will be pushed into the cities, adding to the social dislocations that already plague the country. Since farmers fall through the cracks of China’s primitive welfare system, a big concern is “how to preserve social stability under high unemployment in the transition period,” says private-sector economist Shawn Xu.
In the latest opinion poll, the most common complaint among the 5 percent who opposed the WTO deal is that “China is a strong country and shouldn’t make concessions.” Wang Xiaodong, a writer for the nationalist “New Left” movement, which complains about Western “bullying,” says it’s naive to think WTO entry will help fight corruption. “Even though American capital has flowed into Latin America for 200 years, it has never wiped out corruption,” he says.
Trade talks between the United States and china were stalemated when Zhu went to Washington last April, determined to achieve a breakthrough. But his mission was overshadowed by allegations of Chinese nuclear espionage, and President Clinton rebuffed his proposals. In an attempt to lock in the remarkably favorable terms Zhu had presented, U.S. officials posted their version of his offer on the Internet. That was a big mistake. Returning to China, Zhu was denounced as a “traitor” and an “economic prostitute.” Then Washington’s relations with Beijing were further disrupted by the U.S. bombing of the Chinese Embassy in Belgrade and by China’s heavy-handed crackdown on the mystical Falun Gong movement. But Zhu kept plugging away. In October, he brought in the managers of 101 state-owned enterprises and assured them that the opening to the outside world would be gradual and that even after China’s entry into the WTO, many of their businesses would be protected. After feigning reluctance for months, Jiang finally decided to resume the negotiations with the United States.
But after the talks began, the Chinese appeared to be “treading water,” Barshefsky said later–waffling and backtracking. At one point, negotiator Gene Sperling found himself shouting about the need to prevent a sudden surge of cheap Chinese exports to the United States. Without such protection, Sperling said, Washington could not agree to a deal–he said “never” again and again. Not long after that, the Americans were ushered into their surprise meeting with Zhu. The prime minister turned to Sperling and remarked that he had said “never” six times. “Mr. Sperling, you got angry,” Zhu said, “but in this case, it will be rewarded.” The Americans got 12 years of protection against an export surge. In return, Zhu stipulated that the American stake in telecommunications and Internet joint ventures could not exceed 50 percent–one significant percentage point less than what the prime minister offered last April.
Now that he has cut the crucial deal with the Americans, Zhu will have to see to it that the terms of China’s entry into the WTO are implemented. It won’t be easy. Zhu is popular with ordinary Chinese, and he has pockets of admirers in the bureaucracy. But his take-no-prisoners management style has alienated many of his colleagues; he once described himself as “just an ordinary Chinese–but with a bad temper.” After the vilification he endured last spring, some of his high-level supporters were frightened into silence. Now Zhu depends heavily on President Jiang for political support in promoting reform. Jiang is no diehard reformer. Determined to remain China’s top leader–even after he leaves office in 2003–Jiang is a political consensus-builder; his nickname is “the Weathervane.” Zhu himself shows no sign of wanting to stay in power after his own term ends, also in 2003; twice this year, he tried to promote his agenda by offering, unsuccessfully, to resign. Because of his passionate commitment to reform, Zhu has been called the Gorbachev of China. He loathes the comparison, saying it makes his “skin crawl.” That’s understandable, given the political and economic collapse of the Soviet Union. But Zhu is like Gorbachev in at least one respect. He has risked his job, and his legacy, on the attempt to save his country’s system by forcing it to change.
Modernization: China gets expert help upgrading telecom, banking and insurance industries
Exports: Better trade ties could boost stagnant sales and prices of Chinese products abroad
Consumer confidence: Chinese might spend more if they are less worried about economy
The Internet: New technology will make it hard for government to control information
Unemployment: As many as 11 million jobs could be lost
Social stability: Transition could cause unrest
