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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek TIME AsiaNow

Into the Year of the Dragon
What's Ahead for China
By DAVID HSIEH Asiaweek Beijing Correspondent

November 17, 1999
Web posted at 10:45 a.m. Hong Kong time, 9:45 p.m. EDT

Ascendant Zhu?
With WTO agreement, Zhu Rongji on the comeback trail
- Monday, Nov. 15, 1999

'Just Be Yourself, Dear'
Hong Kong has to find its own techno-identity
- Friday, Nov. 12, 1999

How Rais Missed Being No. 1
Indonesia's first contender never made the final cut
- Thursday, Nov. 11, 1999

The Republic Of Australia
Not yet, mate, but we'll get there
- Tuesday, Nov. 9, 1999

The Week Ahead
Independent political forces make news in Indonesia and Sri Lanka; independent spiritual forces are struggling in China
- Monday, Nov. 8, 1999
Why the Internet is the best thing since the dawn of complex cell life
- Friday, Nov. 5, 1999

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Senior correspondent Assif Shameen on the business of Asia

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The Falungong crackdown. The WTO deal. The return of Zhu Rongji. There was definitely no shortage of dramatic news on China in the past couple of weeks, so it's a good time to catch our breath and ponder what may lie ahead going into the new year.

Beijing is determined to press the fight against the Falungong for months to come, until the cult and its remnant members are fundamentally suppressed. The whole affair, which began with a Falungong protest in April outside the Zhongnanhai top leadership compound, has sent chills down the spine of the authorities. Among their worries: a spiritual vacuum in various sectors of society, the Falungong's organizational prowess, its infiltration of upper ranks of the Communist Party, the devotion and camaraderie of adherents. There is also the concern that mysticism and superstition exist right below the surface of the Chinese psyche.

The suppression of the Falungong may spill over into moves on other mystic qigong groups, including closer surveillance. Authorities have already taken legal action against two sects in the south. Expect state propaganda to go into overdrive against superstition and cult worship. It remains to be seen whether the state will extend the crackdown to the underground Catholic Church loyal to the Vatican. The state has already banned a number of Christian cults in the south over the past two years.

The severity of the Falungong crackdown, along with misperceptions in the U.S., is exerting a negative impact on relations with Washington, which has now granted political asylum to the sect's members in the U.S. Beijing has put a multimillion-dollar price on Falungong leader Li Hongzhi's head, and demanded his extradition. Meanwhile, Chinese authorities remain forever vigilant of political dissident groups trying to legally register their party.

Amid worries about potential dissent as well as unrest from displaced workers, the government is keen to avoid giving the people reasons to complain. It is filing more and more charges of official corruption and graft against bigger and bigger fish. Among recent ones: Guangxi provincial chief Xu Bingsong (whose fellow local bosses were also sacked), alleged scam artist Mu Qizhong of Wuhan, the former director of Hubei's Hong Kong office Jin Jianpei, and the executed senior official of Hunan, Zhang Deyuan. Plus there will probably be another "Strike Hard" crackdown on ordinary criminals around the beginning of next year.

To instill more political loyalty and ideology, especially among leading cadres, authorities have been focusing on Jiang's nationwide "three talks" campaign (talk positive, talk about study, and talk politics), with its various permutations and nuances. In the military, for instance, loyalty means absolute obedience to the civilian rule. Already three years old, the campaign may become Jiang's legacy in an otherwise uncharismatic, ideologically barren reign.

Beijing is also busily grooming core members of the next regime. The most prominent is Vice President Hu Jintao, recently inducted as vice chairman of the party's powerful Central Military Commission (CMC), headed by Jiang. The president has also been elevating a favorite from Shanghai, Wu Bangguo, to resume his portfolio of SOE reform since Jiang personally took charge of economic policy over the summer. (However, the new Sino-U.S. deal on China's entry into the World Trade Organization, boosted by an eleventh-hour intervention by Premier Zhu Rongji, may lead to a new division of economic duties.) For his part, Zhu's most successful protégé thus far has been Vice Premier Wen Jiabao, who is being groomed for top spot in state management. Over the past year, Wen has taken over agriculture, finance and disaster relief, among other key portfolios.

On Sino-U.S. relations, while President Bill Clinton displayed a renewed sense of urgency on China's accession to the WTO, he is neither able nor willing to take the lead in U.S. China policy. That leaves the door wide open for the Congressional opposition to meddle against improved ties. A number of prominent China scholars in the U.S. have called for a more coherent approach to China. But that will not come anytime soon, especially in the 2000 election year when China will likely become a favorite target of both right-wing Republicans and liberal Democrats. Thus, the Chinese are resigned to having no strategic partnership to speak of, but just the ebb and flow of normal relations.

Despite the myriad problems, however, the party leadership is displaying a degree of confidence by making ever more frequent visits abroad. Jiang has been going everywhere and, demonstrators notwithstanding, he has been reasonably successful in mending ties, particularly with the Europeans. Zhu has been to Canada and the U.S., while Li Peng is off again to Africa and West Asia. Even foreign policy novice Hu Jintao has been to Cuba and other Latin American destinations. Lesser luminaries like Wei Jianxing, the Politburo standing committee's graft buster, propaganda chief Ding Guangen and Beijing mayor Jia Qinglin have been on the road, too.

There will be a continuing effort to secure China's borders and promote understanding among its neighbors. Beijing will take part in the ASEAN Regional Forum on security, forge stronger relations with Indochina countries, sign border and economic agreements with Central Asian states, pursue a special relationship with Russia. The Chinese will also woo the Europeans, Australians and South Koreans, partly at the expense of the Americans. There are also a couple of events expected to boost China's image and prestige. One is China's hallmark attendance at the WTO conference in Seattle at the end of November. The other is the return of Macau in December, under the "one country, two systems" arrangement first applied to Hong Kong.

Before the WTO deal, Jiang took direct charge of reforming SOEs and drumming up foreign direct investment, while Zhu handled the nitty-gritty of state bureaucracy. The premier is also pre-occupied with ways to reflate the economy and lift growth to at least 7.5%. Other concerns: financial and banking reform; boosting exports and opening new markets for China's goods. Zhu is also working on alleviating peasant taxation; generating bumper harvests; and making the grain marketing system work for farmers. He will also continue making assurances that China will not devalue its currency for some time to come, probably for the whole of 2000. Relinquishing the SOE portfolio has, in sum, given Zhu a freer hand to manage the economy.

SOE reform is the most onerous issue of all; 2000 will be the third year in the state's agenda for turning around failing SOEs. But don't hold your breath. Although officials have brought in innovative policies like setting up modern enterprise groups, arranging debt-equity swaps, and establishng asset management companies, the scale of the problem seems almost insurmountable. Beijing will have to lengthen the time frame for implementation, and revamp foreign-investment policies, for without foreign and domestic private capital, SOE reform is a lost cause.

In the offing, a number of wealthy coastal provinces and major cities will establish comprehensive and universal social welfare and health programs -- a major concern of all workers. There will also be plans to jump-start the housing sector through mortgage systems, and to rev up the rural market by cutting utility charges. The latter is expected to spur peasants to buy more appliances and production equipment. Still another area of spending is education; Beijing has begun to set up student loan systems involving major banks.

In the military, the state has reasonably succeeded in weaning the PLA out of business but there remains some discontent about compensation. To appease the generals, Jiang and fellow leaders are focusing on armed forces modernization and morale boosts to the rank and file, like the big parade on the 50th anniversary of the 1949 revolution on October 1. At the same time, the party is dead serious about its tradition of controlling the army; it has installed civilian neophyte Hu as CMC vice to take over as chair in 2002. And into the near future and beyond, the civilian leadership will continue to pay close attention to developments within the PLA.

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