China: A Princeling Who Could Be Premier

Rising star Bo Xilai will oversee the country's WTO commitments

Local businesspeople and foreign investors in the northeast Chinese coastal city of Dalian look back fondly on the nine good years when Bo Xilai was mayor and then party secretary. During his tenure, from 1992-2001, the suave, charming son of a veteran of the Long March, Bo Yibo, transformed the drab, unassuming port into a cosmopolitan showcase for foreign investment and tourism. He also gave a boost to small business. "He managed the city like an enterprise," says Xiao Zhiguo, founder of Dalian Luminlight Science & Technology Co., which sells pigments and plastics. "When he wants to accomplish something, he always does."

Now all of China is looking to this Communist Party highflier to outdo himself in his new post as head of the Commerce Ministry, to which he was appointed on Feb. 29. The Commerce Minister has a crucial role: It's his job to make sure China honors the market-opening commitments it took on when it joined the World Trade Organization. That means Bo's agency, a super ministry created by the agglomeration of three trade and economy ministries last year, must be both a champion of Chinese industry and also create a level playing field for foreign competitors as they gain increasing access to China under WTO rules.

If Bo -- one of China's princelings, as children of the senior Communist elite are called -- can keep reform going in the world's fastest-growing major economy, expect to see him in bigger jobs. "He has very strong political ambitions," says Cheng Li, a professor of government at Hamilton College in Clinton, N.Y. "He would like to become a Politburo member or even Premier."

Bo's problem is that China is a maelstrom of competing interests, including municipal officials who are highly protectionist -- and often independent from Beijing. Bo will have to fight for bureaucratic supremacy with both local and national politicos. When disputes arise over thorny issues such as intellectual-property protection or agricultural import barriers, he may end up having to appeal to the all-powerful State Council. "The Commerce Ministry is the protector of the spirit of the WTO," says Jim Gradoville, chairman of the American Chamber of Commerce in Beijing and vice-president of Motorola China Electronics Ltd. (MOT ). "The question is how they manage that role when they don't always have final authority."

MAGIC TOUCH. The English-speaking Bo has more than good looks and charm going for him. In Dalian, the 54-year-old graduate of Beijing University earned acclaim by giving the city clean streets, green parks, and a professional soccer team. As mayor and later governor of down-at-the-heels Liaoning province, Bo was seen as a tireless backer of private enterprise, offering tax and other incentives to those starting their own companies, particularly in high tech. He had a magic touch with foreigners as well. Dalian has attracted a total of $15 billion in foreign investment in the last decade, including $6 billion from Japan alone. Makiko Kamimura, general manager of a packaging-materials factory during Bo's time, remembers how he gave personal attention to the needs of foreign investors, including setting up a special department and hotline to deal with their problems.

Oddly enough, Bo's status as son of Bo Yibo has hampered his career at times. Twice, in 1992 and 1997, jealous cadres at Communist Party Congresses ensured that he was passed over for positions in Beijing. It wasn't until last year that he finally became a member of the Central Committee, paving the way for his ministerial appointment.

Now, Bo has to prove himself again -- not just on a national but a global stage. If he can navigate the pitfalls of implementing free trade, the Premier's job might not be too much to hope for.

By Dexter Roberts in Beijing

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