More than three years have passed since the December 1998 announcement that the Chinese People's Liberation Army (PLA) had formally divested itself from commercial operations. The intervening period has witnessed the expected "mop-up" campaigns on the part of the central leadership and significant resistance and foot-dragging on the part of local military officials, repeating the pattern of rectifications in the system since the late 1980s. Given Hu Jintao's role as official head of the central leading group overseeing divestiture and his widely expected ascension to the central leadership core at the Sixteenth Party Congress, the time seems ripe for a re-examination of the civil-military features of divestiture and their implications for the future party-army relationship.

This essay offers an analytical framework and a set of assumptions for assessing China's security policies and reviews important trends in China's security relations. The analytical approach should help us know what to look for when observing key events ahead. These include: Taiwan's 2001 Legislative Yuan elections; economic developments in cross-Straits relations; arms acquisitions and military exercises on the mainland and in Taiwan; Chinese and American diplomatic overtures in Northeast Asia, Southeast Asia, and South Asia; and the 2002 Chinese Communist Party congress.

The political biography of Zhang that follows is the first of a series of sketches of politically important Chinese military leaders.

China's provincial leadership is both a training ground for national leadership and a battleground among various political forces. Provincial chiefs currently carry much more weight than ever before in the history of the PRC. This is largely because the criteria for national leadership have shifted from revolutionary credentials such as participation in the Long March to administrative skills such as coalition-building. In addition, provincial governments now have more autonomy in advancing their own regional interests. Nonetheless, nepotism and considerations of factional politics are still evident in the recruitment of provincial leaders. Emerging top-level national leaders—including Hu Jintao, Zeng Qinghong, and Wen Jiabao—have all drawn on the pool of provincial leaders in building their factions, hoping to occupy more seats on the upcoming Sixteenth Central Committee and the Politburo. At the same time, new institutional mechanisms have been adopted to curtail various forms of nepotism. The unfolding of these contradictory trends will not only determine who will rule China after 2002, but even more importantly, how this most populous country in the world will be governed.