'People's Premier' leaves a mixed legacy

PUBLISHED : Sunday, 18 March, 2012, 12:00am
UPDATED : Sunday, 18 March, 2012, 12:00am

Quantitatively, Premier Wen Jiabao can lay claim to being the most outstanding head of government in recorded history. But critics and admirers alike say that qualitatively, his record has been mixed.

Wen, 70, who will step down from his Communist Party post in about six months and give up the premiership in March next year after two five-year terms, met or exceeded numerous targets set in the 10th and 11th five-year plans, running from 2001 to 2010.

Since taking office in 2003, he has overseen the continuation of one of the most remarkable economic transformations in history, taking the mainland from the world's sixth-largest economy to No2, trailing only the United States.

During his reign, the mainland became the world's wealthiest nation in terms of foreign reserves - now US$3.2 trillion; the world's largest exporter, car producer and consumer; and home to the world's longest high-speed rail system.

He has overseen the world's largest poverty-eradication campaign and succeeded in lifting tens of millions of people out of misery, with per capita income growing from US$800 to more than US$4,000 in the past decade.

Since 2010 the country has also replaced the US to become the biggest single contributor to global economic growth, accounting for 17 per cent of the expansion in global output that year and about 30 per cent last year.

With its growing economic clout, China has become one of the rule-makers of the global game, representing developing countries in the restructuring process after the 2008 financial crisis.

However, he has generally failed to live up to expectations on economic reform and social development, despite his exceptional record on economic growth.

Some analysts say the phenomenal growth of the past decade has been achieved at excessive cost, with environmental damage, a deteriorating economic structure and an ever-widening wealth gap.

Wen came to power amid great hopes for reform, but mainland critics say he has reached few of the goals he set for himself in this regard when he was appointed premier. These include reducing bureaucrats' economic power, breaking up state monopolies in many highly profitable sectors, deregulating state controls on prices and restructuring the banking and financial markets.

Wen has also failed to curb rising inflation and skyrocketing house prices, improve education and medical services, narrow the widening income gap, crack down on widespread corruption, and improve the environment and food safety.

'Wen has made no progress in regards to market and social reform, strengthening the rule of law and improving governance. And no progression means retrogression,' said Professor Zhang Ming , a political scientist at Renmin University.

Shen Jianguang, chief China economist with Mizuho Securities, said he had seen a great deal of progress on economic restructuring and social development recently. 'Now I do see important changes last and this year that make the economic structure more balanced and income disparity improve,' Shen said last week.

Wen has gained popularity by showing sympathy with ordinary people, especially following the Wenchuan earthquake in 2008. But some critics say the 'People's Premier' has failed to live up to his promises on some livelihood issues, such as narrowing the income gap and building up the social security system, despite the government's soaring fiscal income.

Wen is credited with abolishing the age-old agricultural tax in 2006, but farmers have still fallen further behind their urban cousins economically in recent years.

Peng Wensheng, chief economist with China International Capital, said the mainland's Gini coefficient, a measure of income inequality, had risen from 0.35 in 1990 to 0.55 last year, according to World Bank estimates, well above the international warning level of 0.4.

Meanwhile, income inequality between urban and rural residents has also worsened significantly, with the ratio of per capita urban disposable income to rural net income increasing from 1.86 in 1985 to 3.13 last year, Peng said in a recent report.

Hu Yifan, chief economist with Haitong International Research, pointed out the lack of progress in building a social safety net and welfare system under Wen. 'A reliable social safety network is far from established after a decade's efforts.'

Citing the fact that in the past 10 years, the mainland's gross domestic product has grown, on average, by more than 10 per cent a year, while fiscal revenues have grown by more than 20 per cent a year, Hu said the pension fund pool had become relatively smaller, making it harder to deal with the retirement of the baby boom generation.

In a panel discussion at the annual session of the National People's Congress in Beijing, a Guangdong NPC deputy lambasted the central government for taking the lion's share of national income - but failing to properly use taxpayers' money to benefit the people.

'The central government has taken 55 yuan (HK$67) from every 100 yuan in GDP,' said Wang Nanjian , also head of Guangdong's taxation bureau. 'They got that much but did not use it properly.'

With increasingly widespread discontent, many look back nostalgically to the time of Wen's predecessor, Zhu Rongji. Zhu, a reform-minded and no-nonsense economic tsar, took a tough approach against corrupt officials, fostered a market-based economy, brought China into the World Trade Organisation (WTO), overhauled state-owned enterprises and restructured the banking system.

Many NPC and Chinese People's Political Consultative Conference delegates say Zhu outperformed Wen in several areas.

'Premier Zhu is more capable,' said CPPCC member General Huang Quangui .

Another member of the influential body, Zhang Hua, said: 'Premier Zhu was no-nonsense and did what he said. He was bold and resolute in his work. Premier Wen is relatively soft.'

Tim Condon, chief Asia economist with the ING banking group, said it was not flattering to compare Wen's record with Zhu's.

'Zhu managed the economy during the Asian crisis, laid out the blueprint for banking reform, reformed the [state-owned enterprises] and secured accession to the WTO. In contrast, economic reform has gone nowhere during Wen's tenure,' he said.

But Condon said it was not really fair to compare their performance.

'Zhu picked off the low-hanging, pro-market reform fruit. And more ambitious reforms would involve ceding too much policy discretion to market forces,' he said.

'It cannot afford to give it up, at least not yet. So while Wen has an unimpressive record as an economic reformer, it is unlikely to be eclipsed by that of his successor,' Condon said, referring to premier-in-waiting Li Keqiang. Condon said Li would face the same constraints on pushing reforms as Wen.

Johnny Lau Yui-siu, a Hong Kong commentator and veteran journalist who has covered China for many years, said there were two reasons why Zhu outperformed Wen.

Firstly, Zhu came to office when the mainland faced a very difficult and complicated domestic and international environment. Secondly, his achievements were pioneering ones, laying the foundations for the mainland's phenomenal growth. Wen was just trying to maintain Zhu's legacy.

In recent years, Wen has made repeated calls for Western-style political reform, making him the most outspoken communist leader since the military crackdown on the pro-democracy movement in 1989.

And while he might appear to be a lonely voice among the Communist Party leadership, many critics say he has failed to back his words with real action.

Some say he has just been cultivating his public image before retirement - or at most playing a role to balance the communist leadership's conservative image.

Others say there has also been limited progress in areas that are not politically sensitive, such as streamlining the bureaucracy, and promoting transparency and the rule of law.

Liu Xirong, an NPC deputy and former deputy chief of the party's Central Commission for Discipline Inspection, pointed out in a panel meeting that the number of civil servants on the mainland had grown from 6 million to 10 million in the past four years.

And, in his book China's Best Actor: Wen Jiabao, dissident author Yu Jie dismissed Wen's image as a reformist and said he deserved an Oscar for the political role he played.

Zhang said Wen might want to do something in political reform but his power in this area was limited. Political affairs generally fall into the jurisdiction of the party, not the government, though Wen is No3 in the party's hierarchy.

No matter what his score, Wen will leave a raft of thorny issues to his successor.

Zhang, the Renmin professor, said that while many believed the mainland had become stronger on the international stage, he saw a weaker nation in terms of governance, rule of law and social harmony. 'The country might be getting richer, but its people are not feeling safer and getting happier,' he said.


The number of times Wen said the word 'reform' in his opening speech at the annual CPPCC meeting earlier this month


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