The changes will strengthen Jiang's position. Since the early 1990s he has held the three most important positions in the state (president, CCP general secretary and chairman of the Central Military Commission (CMC)), but was perceived to be vulnerable to challenges from other senior CCP figures following the death in February of paramount leader Deng Xiaoping. The reshuffle means that such challenges are now almost impossible.
The most significant personnel issues are:
- Jiang's chief rival Qiao Shi, formerly leader of the National People's Congress (NPC - rubber-stamp parliament), failed to win election to the central committee. He automatically loses his Politburo position and is now powerless. His position as NPC leader will probably be offered to Li Peng, who is constitutionally required to step down as premier in March 1998.
- Elderly Generals Yang Baibing and Liu Huaqing also failed to be elected to the central committee. Confidants of Deng, they could have formed the core of a reactionary clique opposed to Jiang's modernising instincts.
- Economic czar Zhu Rongji has been promoted to number three in the all-powerful 7-strong standing committee of the Politburo, making him a certainty to assume the post of premier in March on the retirement of Li Peng.
- Jiang's allies Gen Chi Haotian (also defence minister) and Gen Zhang Wannian became the most senior serving officers in the CMC.
Economic reform
With his political future assured, Jiang can concentrate on state-sector reforms. This, rather than political ideology, was the Congress' dominant policy theme, with Jiang pledging to privatise much of the state-owned sector.
Jiang gave no details as to how such a programme would be carried out among many of the 370,000 state-owned firms. Local economists believe that the reforms will involve the state retaining about 3,000 successful companies, and allowing the remainder to either be merged, sell shares to employees, float on the stock exchange or go bankrupt. The change in policy will involve job losses for millions of mainly urban workers, necessitating sensitive management of these reforms. Much of the urban population has been shielded from 'market forces' by employment in the state sector. This has included subsidised housing, health, food and education on a scale that is a huge financial obligation for the state.
Efforts to reduce such subsidies will present China with its greatest economic and social challenges since Deng launched his reform programme in 1979. Deng's mainly agricultural reforms enriched some areas, while creating massive dislocation in the countryside that continues to threaten stability. Jiang's programme is likely to create uncertainty in the more volatile urban areas, potentially leading to active opposition to the CCP.
The challenge facing the CCP in reforming the state sector was put into perspective by opinion at a recent World Bank/IMF meeting in Hong Kong. While congratulating Jiang on his commitment to economic reform, the organisation said that China faced a 'task of unparalleled difficulty' in seeing through the changes.
Other themes raised by Jiang and endorsed by the Congress included:
- the renewal of China's long-standing threat to use military force to prevent Taiwan pursuing separatist policies;
- the reduction of the People's Liberation Army (PLA) by 500,000 personnel from its present 3.1m strength; and
- a warning that corruption threatened the existence of the CCP and the state.
These themes were signalled in advance through the official media and contain no surprises. Official corruption is the most pertinent of these issues for the CCP. A sign that the party is serious in its intention to tackle high-level corruption came with the promotion of the CCP's top anti-corruption official Wei Jianxing to the Politburo standing committee (one of two new members). The announcement on 10 September that former Beijing mayor and party leader Chen Xitong would be tried on corruption charges also sends a powerful anti-corruption message. No legal action has hitherto been taken against Chen since his dismissal in 1995 over allegations of amassing about $25m through bribes and embezzlement.
The Congress has set China's political and economic direction for the next five years. It can be seen as a major success for Jiang that almost guarantees political stability in China for the medium term. However, there are no guarantees against the socio-economic unrest that is an almost inevitable consequence of meaningful economic reform.
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