BARELY six months after Vice-Premier Zhu Rongji took up the post of central bank governor in July 1993, rumours were circulating that he would give up the position. 'Since we implemented macro-controls over the economy, the post of People's Bank of China has become extremely unpopular,' he said at the time. 'As not many people are willing to be the governor, I will have to continue at my post.' Now Mr Zhu is about to resign from the bank, but is not stepping out of politics. He will retain his position as executive vice-premier of the State Council, and the bank governorship will become another line on a resume detailing decades of public service. Mr Zhu stepped in as governor of the People's Bank of China at the behest of patriarch Deng Xiaoping to clamp down on high inflation and excessive speculation which had gathered strength under his predecessor Li Guixian. He unveiled a 16-point austerity programme to tighten credit, announced 'Ten Bans' on bank activities and ordered 10 inspection teams to 20 provinces. During his term he also initiated foreign exchange reforms and helped restructure the tax system. Another major element of his legacy was his partial success in overhauling the financial system. He halted political interference in the money supply and decided that financial institutions would be divided into policy banks, which were able to serve both political purposes and commercial ones, making loans according to a borrower's creditworthiness. In the eyes of Mr Deng, Mr Zhu was a trustworthy liberal official in a sea of conservatives. He was someone Mr Deng could count on to implement his market reforms after two of his former allies, Hu Yaobang and Zhao Ziyang, were ousted in the fall-out from the June 4, 1989, massacre of students and workers in Tiananmen Square. Mr Zhu had proved himself earlier in Shanghai, helping the city to make its first big strides in a return to its pre-revolutionary prominence as the nation's financial capital. During his three-year stint from 1988 to 1990 as Shanghai's mayor, Mr Zhu became known as 'China's Gorbachev' among foreign observers who witnessed similarities between his reformist ideas and those of the former Soviet leader Mikhail Gorbachev. Mr Zhu reportedly did not appreciate the comparison because he believed Mr Gorbachev had perverted communism. Nevertheless, one of Mr Zhu's biggest contributions to the economy was the development of the Pudong New Area, which he envisioned would become the 'dragon head' or mainstay of China's economic development. This year marks the fifth anniversary of Pudong's establishment, which, under his guidance, was transformed from a chunk of farmland into the nation's biggest development zone. Along the way, the 522-square-kilometre area has absorbed about US$12.08 billion in investment. But some Pudong officials admit the pace of the development has been too fast for the area's infrastructure to cope. After serving as mayor, Mr Zhu began working at the national level. In April 1991, not long after being installed as a vice-premier, he set his sights on the much larger vestige of the former planned economy: the triangular debts plaguing state-owned enterprises. His plan to cut debts between creditors, suppliers and producers by closing hopelessly indebted enterprises and granting autonomy to profitable ones was only allowed to be implemented on an experimental basis, the same basis on which it continues today.
