Zhu Rongji Deserved A Nobel – Joseph Stiglitz

Remembering one of the greatest economic feats in history

A few from Zhu

“You (referring to cadres) are neither diligent nor independent. You go out drinking and eating at banquets, then arbitrarily approve projects.You put cronyism first, cultivating guanxi (networks) everywhere, not giving a damn about the state’s money and assets. When you’re sitting here reporting to the chairman, how can you expect people below you not be disgusted?”–at financial work conference in 1993

“To fight corruption one must go after the tiger first, then the wolf. There will be absolutely no tolerance for the tiger. Prepare 100 caskets and leave one for me. I’m ready to perish together in this fight if it brings the nation long-term economic stability and the public’s trust in our government.” – after major corruption case killed twenty-two elite detectives.

“I’ve slammed my hand on tables, given intimidating stare-downs, and people say I do it to scare the public. Well I don’t think anyone believes that is the case. I don’t intimidate the public, I only intimidate those corrupt officials.” – press conference at a national legislature session in 2002

“My only hope is that after I leave public service, the Chinese people will think of me in one way: that he was a clean official, not a corrupt one. I will be immensely satisfied with that judgment alone. But if they are feeling particularly generous and say that Zhu Rongji got some real things done while in office, then I’ll thank heaven and earth.” – national legislature session in 2000

Farewell

“I want to remind those cadres who are staying on the job beyond me: my biggest worry right now is an overheating economy, I’ve already worried about this for a year now. I wouldn’t say this publicly, but only bring it up to the top leadership, that overheating is the one thing that preoccupies my mind. Many signs seem to have emerged, and if we’re not vigilant, the economic situation will be difficult to rein in.

“I’ve had 50 years of macroeconomic work experience and I can sense deeply this creeping “national syndrome”. Every time things improve just a little bit, people start to adopt an exaggerated swagger, become blindly self indulgent, randomly complicate things, and ignorantly devise policies. I’ve already commented that I think the property market is overheating, but I notice that the majority of my colleagues have not internalized the gravity of this issue. They always tell me “the overall conditions are quite good” as their bottom line and only spend little time discussing the problems. That’s a bunch of malarkey! "This is serious overheating, it was precisely overheating in the housing sector in 1993 that crippled Hainan. I’ve been reading some foreign media and they all say China is already a bubble, property is overheating, and risk is growing..”.

”Our banking and financial sector colleagues must grasp this dynamic, because at the end of the day, all the money will come from banks. I must reiterate to our bank colleagues: perhaps you think you are being promoted to higher office in two years and that you will no longer manage financial portfolios, so why not just leave current problems for the next administration to fix...You cannot just leave these problems to your successors and blindly pursue development. I’m particularly concerned about this trend toward “urbanization”. Urbanization now has been interpreted as simply constructing more housing at low cost, seizing farmers’ land, and allowing foreign investors or domestic developers to move in without appropriately dealing with the farmers--this is a dangerous development. This does not align with the central government’s intentions at all. We’ve discussed this internally on numerous occasions because we were precisely afraid of these kinds of trends.

“Our own think tank has published a report called The Cost of Urbanization to Rural Residents and Farmers that I suggest you all read. The study details a case in Luoyang, Henan, where it began massive township developments in 2001. It proceeded for two years without any comprehensive plans nor obvious sources of funding. So what do you do when you don’t have the money? Well, what was originally a single floor house, they just built another taller wall along the street to make it look like it’s a two or three-story house. They didn’t invent this method, it has been used before, it’s all fake! I don’t know where they got their money, how could the village and county governments put up that kind of money? Either they got it through some kind of bank loans or they tapped local funds that were meant to be spent on education. I think this report is more poignant than a comparable one from the State Council. In 1993 it was all these urbanization projects in major cities, Hainan and elsewhere. If everyone starts to “urbanize” going forward, how can that be sustained! Our bank colleagues must remain alert. You always say that macro conditions are good, nonperforming loans are declining, but I just don’t believe it..”.