Zhu faces pressure to slow reform
Premier Zhu Rongji will face pressure from regional cadres to slow reform at leadership meetings next month at the summer resort of Beidaihe.
Diplomatic sources in Beijing said regional chiefs at the annual policy-setting sessions would tell Mr Zhu reforms he started in March had exacerbated social unrest.
The sources said the Communist Party leadership might also call a third plenary session of its Central Committee in October to seek a new consensus on striking a balance between reform and stability.
Local officials faced immense strains from growing unemployment owing to two Zhu initiatives - restructuring state-owned enterprises and trimming the state bureaucracy, said the sources.
Other gripes centred on the Premier's decision to stop providing subsidised housing to civil servants and employees of state factories on July 1.
Even rich cities such as Shanghai, Mr Zhu's power base, had called on the Premier to postpone the deadline. Cadres in well-off cities have said even with more bank loans, individuals and work units do not have the means to buy their own apartments.
An economic source said officials in cities with large numbers of gumin - investors in stocks and shares - had expressed worries about Mr Zhu's recent efforts to rectify banks and stock brokerages.
The officials feared that if security firms under their jurisdictions were shut for irregularities, gumin who could not recover money could threaten law and order.
'Zhu is blamed for breaking down old institutions but failing to erect new ones fast enough to ensure stability,' the source said.
Meanwhile, it is understood that the stability of the yuan will figure prominently on the Beidaihe agenda.
Chinese leaders are expected to put more pressure on Japan and the United States to arrest the devaluation of the yen.
The leaders will also look at the first six months' performance in exports and absorption of foreign capital to determine strategy on the currency.
Beijing is under pressure from a growing pro-devaluation lobby.