China: Does Jiang Have The Clout To Tackle The Tough Jobs?

With its menacing goose-stepping soldiers and communist kitsch, the Oct. 1 megaparade in Beijing may not have been the best symbol to show a world that is growing increasingly wary of Asia's rising superpower. But to Chinese President Jiang Zemin, the celebration of the People's Republic of China's 50th anniversary was a domestic public relations triumph. Along with floats honoring past leaders Mao Zedong and Deng Xiaoping was another devoted to Jiang--a display meant to elevate him into the pantheon of Communist Party greats.

The adulatory treatment suggests Jiang now has the stature needed to initiate bold changes in China. But the propaganda machine may be delivering a false impression. True, the 73-year-old leader, who rose from relative obscurity to take the party helm after the 1989 Tiananmen Square massacre, has finally consolidated his power. Yet he has little time left in office: Jiang is scheduled to step down as President in March 2003. And he faces so many limitations--the technological backwardness of the military, the social repercussions of drastic economic reform, and his own cautious style--that there is little reason to expect any daring new solutions to China's problems.

GROWING FEARS. Jiang's role as a political weather vane poses potential hazards. He seems reluctant to--or simply unable to--undertake the messy and painful reforms needed to modernize China's troubled economy. And as domestic problems mount, Jiang has toughened his line on Taiwan. This raises fears that the danger of a military confrontation could grow.

Clearly, Jiang has softened the big push launched two years ago to clean up state-owned enterprises. Progress on erasing some $250 billion in bad loans at the state banks has been halting. And with prices falling and unemployment on the rise, it's unclear where Jiang stands on how much market access China should concede in return for gaining entry to the World Trade Organization. One ominous sign: The slow-moving, conservative Trade Minister, Shi Giangsheng, is taking the lead in the WTO talks. Premier Zhu Rongji and other advocates for faster reform such as Long Yontu, the relatively liberal trade negotiator, are playing second fiddle. Leaders "are not willing to take big steps," says a Chinese economist.

Jiang has proven adept at building his power base. Hu Jintao, a Jiang protege, was recently appointed a vice-chairman of the powerful Central Military Commission. That makes him heir apparent to the presidency and testifies to Jiang's sway. Hu is best known for his tough tactics in Tibet before heading the Communist Party's leadership training school in Beijing.

Jiang can still expect imperial treatment--which he got from a Who's Who list of American executives at a Shanghai conference in September. Time-Warner Inc. Chairman Gerald M. Levin called Jiang "my good friend"--even though Beijing banned Time's special issue on China.

But this treatment does not translate into the kind of power Deng held. Even after he retired from his last senior position in 1990, Deng called the shots--and kept reform moving ahead. By contrast, many analysts view Jiang's increasingly harsh actions--from his repression of pro-democracy dissidents and the Falun Gong religious movement to his saber-rattling over Taiwan--as signs of frustration, not strength. "China has the smell of the end of dynasty about it," says Robert A. Manning, Asia studies director for the Council on Foreign Relations. And as China historians know, the dying years of a dynasty can be perilous indeed.