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Will China's Economic Boss Be Deng's Successor?


International Outlook

WILL CHINA'S ECONOMIC BOSS BE DENG'S SUCCESSOR?

It has been a great year for the West's favorite Chinese leader. In October, Zhu Rongji, China's economic czar, was elevated to the politburo. The promotion was a reward for Zhu's key role in engineering China's epoch-making shift toward a market economy. It may also tip Zhu as Deng Xiao-ping's choice to take the helm once the aging patriarch dies.

As if Zhu did not already have a fat portfolio, he now is entering the swirling dispute between Britain and China over how much democracy should be permitted in Hong Kong. On a whirlwind investment-promotion visit to London in mid-November, Zhu slammed Hong Kong Governor Chris Patten's proposals for liberalizing the colony's political system and hinted that the controversy could derail the arrangements for an orderly Chinese takeover of the colony in 1997. "No one should expect confrontation to force us into concessions," Zhu said.

The comments sobered Zhu's British hosts and rocked the Hong Kong stock market because the affable, English-speaking vice-premier is considered the most liberal and pro-Western of China's mandarins. But by putting Zhu on the Hong Kong case, Beijing could also be signaling its interest in a deal. Indeed, in private meetings, British officials were careful not to alienate Zhu. "He's one of the good guys," says an aide to Prime Minister John Major. "He may be on our side."

HE DELIVERS. Zhu is as qualified as anyone to find a way out of the Hong Kong mess. He has made a career of walking a fine line between getting things done and getting into trouble. Westerners doing business in China respect him as a can-do troubleshooter. The Beijing elite keeps promoting him because he has delivered the economic goods.

As mayor of Shanghai in the late 1980s, Zhu helped revive the run-down city by attracting foreign investors, starting a stock market, and creating the massive Pudong investment zone. His advisory council of top Western businessmen, co-founded by Maurice R. Greenberg, chief executive of New York-based insurance giant American International Group Inc., helped spur interest in China's former financial center. Zhu has been willing to intervene on behalf of Western companies--a rare trait among Chinese bureaucrats. "If foreign investors had a complaint, he would track it down--and chew people out," says Jerome A. Cohen, a Beijing-based lawyer for Paul, Weiss, Rifkind, Wharton & Garrison.

CLEAN HANDS. While charming to visitors, Zhu, 63, rides his own staff hard. He is outspoken against bureaucratic delay and even the appearance of corruption. Chinese managers don't dare smoke in his presence because he says they don't make enough money to be able to afford cigarettes.

But Chinese respect Zhu for keeping his hands clean during the Tiananmen Square crackdown of 1989. As Shanghai's mayor, he took to the airwaves to urge calm and managed to keep the troops out of the city.

But it was Zhu's talents for spurring economic growth that caught Deng Xiaoping's eye. The frail power broker was behind Zhu's promotion to the top economic post in 1991. The local press has quoted Deng praising Zhu as one of the few officials "who really understands how the economy works."

How far will Zhu's meteoric rise take him? He would be well-positioned for the post-Deng power struggle if, as some speculate, Deng makes him premier next year. Of course, Zhu's fortunes are tied to economic performance. But it certainly wouldn't hurt if he could pull off a diplomatic coup in Hong Kong.Joyce Barnathan in Hong Kong, with Lynne Curry in Beijing and Richard A. Melcher in London Edited by Stanley Reed


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