China Leadership Monitor
Friday, January 30, 2004

Winter 2004: Issue 9

Foreign Policy
Foreign Policy

China's Foreign Policy Leadership: Testing Time

by Robert L. Suettingervia China Leadership Monitor
Friday, January 30, 2004

Over the course of the last two years, and particularly since the elevation of Hu Jintao to the most prominent positions in China's leadership, China's foreign policy appears to have undergone a significant transformation in favor of enhanced pragmatism, flexibility, and sophistication. This transformation has coincided with what leaders both in Beijing and in Washington have characterized as the best period in U.S.-China relations in more than a decade. Nevertheless, it is evidence of the volatility of the U.S.-China relationship, and of the difficulty of managing it consistently, that commentators on both sides have recently begun forecasting considerable tension. The proximate cause of this rise in tensions, as it has been so often in the past, is the Taiwan issue, specifically the U.S. attitude toward the Chen Shui-bian government and recent actions Taiwan has taken that Beijing interprets as moves toward independence. For China's leadership, the ensuing months are going to be a time of further testing. Although neither party General Secretary Hu Jintao's nor PRC Premier Wen Jiabao's job security is not in jeopardy, neither man's reputation will be burnished by the after-effects of the latest contretemps over Taiwan. How strongly they will push back against domestic critics to maintain China's mild-mannered approach to Washington and Taipei remains an open question.

Military Affairs
Military Affairs

The Mystery of the Missing Godfather: Civil-Military Relations and the Shenzhou-5 Manned Space Mission

by James Mulvenonvia China Leadership Monitor
Friday, January 30, 2004

On October 15, 2003, China launched Shenzhou-5, its first manned space mission. China's space program was personally associated with Jiang during his tenure China's top leader, and he was prominently involved in the previous four Shenzhou launches. In the saturated media coverage of the launch and recovery, however, Jiang was noticeably absent. Instead, the new top party leader Hu Jintao was the center of the action, issuing the "important speech" on the success of the mission, and PRC Premier Wen Jiabao played a significant role. This report examines the possible reasons why Jiang was not in attendance at the Shenzhou-5 launch and assesses their implications for Chinese civil-military relations.

Political Reform
Political Reform

The Third Plenary Session of the 16th Central Committee

by Joseph Fewsmithvia China Leadership Monitor
Friday, January 30, 2004

The recent Third Plenary Session of the 16th Central Committee suggests that despite obvious signs of tension within the leadership over the past year, Chinese Communist Party (CCP) General Secretary Hu Jintao has begun to put his distinct stamp on policy. A long "Decision" on the goals of further economic reform—the only document emerging the plenum to be made public—indicates a greater concern with balanced growth and the social dimensions of economic development than did the political report adopted at the 16th Party Congress in fall 2002. Although the plenum did not take up the issue of political reform explicitly, it adopted a new party procedure that called for the Politburo to report on its work to the whole Central Committee, a step advertised as a step toward "inner-party democracy." Recent articles in party journals indicate that discussions continue on political reform, albeit of a limited sort, and that there are likely to be significant developments in this area in the future.

Economic Policy
Economic Policy

An Economic Bubble? Chinese Policy Adapts to Rapidly Changing Conditions

by Barry Naughtonvia China Leadership Monitor
Friday, January 30, 2004

During the first half of 2003, rapid growth in China led many to proclaim the emergence of an economic "bubble." Extremely rapid growth of money and credit was accompanied by rapid growth in investment, especially in the housing market. Chinese policymakers have taken steps to restrain the bubble, and these measures are now having an impact. During this first phase, the emergence of the bubble and the way that it was handled seem to have strengthened the positions of both Premier Wen Jiabao and Central Bank Governor Zhou Xiaochuan. However, the rapid emergence of the bubble economy reveals some unsettling realities about the Chinese economy. Moreover, the bubble portends important shifts in the economic payoffs and challenges that lie ahead for the political leadership.

Party Affairs
Party Affairs

Hu Jintao and the Party Politburo

by Alice L. Millervia China Leadership Monitor
Friday, January 30, 2004

Publicity attending the recent party Central Committee plenum and other media attention over the past year have shed light on the operations of the party's top decision-making body, the Politburo, under party General Secretary Hu Jintao's leadership. Much of the picture of Chinese leadership decision making remains dim, but the recent publicity has illuminated the formal aspects of Politburo routines and procedures in small but still significant ways. This publicity also permits tentative inferences about the dynamic of power in the Politburo and its Standing Committee and perhaps about Hu Jintao's personal aims in pressing institutional reform in the Politburo and beyond.

The Provinces
The Provinces

China's Northeast: From Largest Rust Belt to Fourth Economic Engine?

by Cheng Livia China Leadership Monitor
Friday, January 30, 2004

China is arguably undergoing the most challenging phase of its economic reform: revitalizing the old and stagnant industrial bases in its northeastern region. Once the "cradle of industrialization" of the People's Republic of China (PRC), the northeastern region, with a population of over 100 million, is today often called the nation's "last fortress of a planned economy." The ultimate goal of the so-called northeastern rejuvenation scheme is to transform the country's "largest rust belt" to its "fourth economic engine," after the Pearl River delta, the Yangtze River delta, and the Beijing-Tianjin corridor. This new phase of China's economic development not only will be crucial for the credibility and legitimacy of the Hu-Wen administration, but will also shape China's future. This article explores the broad political environment in which this strategic scheme has been formulated, outlines the main components of the northeastern rejuvenation, and analyzes the characteristics of top provincial leaders in the northeastern region.