Zhu Rongji

Li's economic denial may hide wish to avoid thankless job

PUBLISHED : Monday, 18 January, 1993, 12:00am
UPDATED : Monday, 18 January, 1993, 12:00am

IT was widely assumed that Mr Li Lanqing was being rather economical with the truth when he denied a couple of weeks ago that he would soon be promoted to head the Chinese Government's new super-agency, the Economic and Trade Office (ETO).

But on reflection, the usually taciturn trade minister may have been telling it like it is.

Asked in Beijing's Great Hall of the People if, as had widely been reported, he would be resigning from the Ministry of Foreign Economic Relations and Trade (MOFERT) to take up the directorship of the ETO, Mr Li replied: ''I am not prepared to resign my post.

''At present, I am still doing my very best at my job and go to the office at 8 am each morning.'' His answer appeared on the surface to be a denial, but might have meant that Mr Li had been allocated the job at the ETO but was not too keen to take it up.

Mr Li is doing a good job at MOFERT and may be reluctant to move on to bigger, but not necessarily better, things at the ETO.

The directorship of the ETO, while highly prestigious, carries with it tremendous responsibility and considerable risk.

The ETO, created last year from the State Council's Production Office, is responsible for overall economic and trade policy formation and for macro-economic fine-tuning to ensure the economy stays on track.

Given the rapid pace of economic development over the past two years, particularly in southern China and in the private sector as a whole, this will not be easy.

The incumbent in the ETO hot seat, Vice-Premier Zhu Rongji, has encountered numerous problems in getting a handle on China's runaway economic growth, one of the reasons people are saying he wants out of the job.

Economic overheating and spiralling inflation in the late 1980s were major factors behind the downfall of former party General-Secretary Zhao Ziyang, and Mr Zhu is evidently concerned to avoid the same fate.

Likewise, Mr Li must have reservations about taking on such a thankless task and is probably quite content to stick with the trade portfolio.

Trade, after all, has been the major success story of the Chinese economy during the past two years, and the indications are that it will continue to flourish in 1993.

Trade volume increased by more than 20 per cent last year to reach US$165.63 billion, but more significantly, imports rose 26.4 per cent to $80.6 billion, thereby cutting China's trade surplus by nearly half to $4.4 billion.

Furthermore, under Mr Li's stewardship, MOFERT concluded two major trade agreements with the United States on protection of intellectual property rights and market access.

These have significantly reduced US anger at what it considers China's unfair trade practices, and have increased the mainland's chances of rejoining the General Agreement on Tariffs and Trade.

However, China has a lot of work to do before it can regain GATT membership, and it is understood that Mr Li would like to remain at MOFERT's helm at least until that task has been achieved.

Mr Li might also prefer to stay at MOFERT because, relatively speaking, it is a fairly efficient organisation.

Should he move to the ETO, Mr Li would not only have to deal with a newly created and untested bureaucracy, but with the dozens of other ministries under the ETO as well.

As Mr Zhu has discovered, these ministries do not always do as they are told.

Reform initiatives to cut back government control of state-run enterprises are being firmly blocked by many ministries, who see the policy as a direct threat to their position in the government hierarchy.

Mr Zhu has made a lot of enemies in his attempts to cut a swathe through the government's bureaucratic dead wood, and there is no reason to think Mr Li would make himself any more popular if he tried to do the same.