The publication of former Premier
Zhu Rongji's speeches and conversations is an early Christmas present for all China watchers. Most of the material published in this collection has never before been released.
I had a strong sense of deja vu reading through the four-volume collection, because we are living with the consequences of many of the policies overseen by Zhu during his tenure without realizing how fast those changes have been brought upon us, and at the same time, some of the most paramount challenges we are having today are the same ones troubling him one or two decades ago. I will summarize a few key issues/reoccuring themes in this collection next time, and you can read my friend Damien's
translation of some excerpts from his speeches.
In this post, I'd like to share with you Zhu Rongji's comments during China's WTO negotiations with the U.S.. These records show the tremendous domestic pressure he was under, especially with the Ambassy bombing that occured in the middle of the negotiations. Some of his words also reveal the temperament of Jiang Zemin and the relationship between the military and the civilian government. As you will see, Zhu is an extremely straight-talking person, and does not fear to reveal emotions. I hope you find it entertaining.
Meeting with U.S. Trade Representative Charlene Barshefsky, Head of National Economic Council Gene Sperling, etc.
Nov. 13, 1999 at 10:30 AM, Zhu Rongji met with U.S. delegation in Zhongnanhai to negotiate China’s entry into WTO
ZHU: I apologize for not notifying you of this meeting until early morning – it was short notice. But I have to make clear of the situation: I’ve been as busy as you are during the negotiations in the past two days, since I’ve got to read all your statements. I even know that Mr. Sperling said six “no”s.
SPERLING: I remember I only said four.
ZHU: … after receiving your letter, we had a midnight meeting that wasn’t over until 3 AM. You can estimate how many hours of sleep I’ve had. But remember, I’m more than 70 years old, much older than you all. Some of you are even younger than my daughter. Now, before we state our position, can we have our honorable guests to speak first? Yet I have to remind you, the longer you speak, the shorter I will.
BARSHEFSKY: … we now have complete authorization … President Clinton, in his letter to Chairman Jiang, has taken back the ten year quota for textile. We have been flexible in telecommunication, insurance and automobile sectors… WTO is far beyond an economic agreement, but has a build-in political understanding…
SPERLING: … I used to think that before the President receives some concessions from China, we shouldn’t make any compromise on textile and general safeguard provisions, but the President persuaded us to make exceptional compromises in order to show China that we are willing to reach an agreement the Chinese people can accept… We hope that China can understand the sensitive issues we raised as well.
ZHU: (Reminded the Americans that China made concession even before April on the agricultural sector.) You come here this time, saying U.S. is making an unprecedented compromise; China is not responding correspondingly; and you are throwing tantrums all over this. I’ll make one point: you don’t know how much concession we’ve made in agriculture. I am blamed by the people in the entire country for this, do you know that?
I reiterate that I will never back away from the concession we’ve made in agriculture, but if we cannot reach an agreement this time, we will never ever make any compromise on the agricultural front!
(On the Two 51% issue -- share of foreign investment in telecommunication and insurance industries) I still think that the “two 51%” issue is not a big problem. I have said this again and again, and to Mr. Summers too, blowing an agreement for a couple of percentage is very stupid. The percentage of foreign investment in insurance companies we have approve so far is as high as 49% sometimes, and sometimes 50%, sometimes even 51%; you could check to see what difference it makes? Not at all! Even for those with 49%, it could be managed by the foreign partner. That’s why the couple of percentages don’t make any actual difference. But why are we insisting on this? Not to go back on our words, but the situation has changed. First of all, it’s because you shouldn’t bomb our Embassy in Yugoslavia… Chinese have always thought that the telecommunication and insurance industries are of vital interests [to the nation]. They think that if I agree to 51%, I’m selling out China’s interests – even though I don’t think so. From there on, a rumor is spreading in and outside of China that “Zhu Rongji is going to quit; [he] is going out of office.” That’s a complete unfounded. But the truth is I’m criticized by all sides. Such criticism comes from the people – they don’t understand the real situation. You don’t understand our public opinion. If I’m not in China, but in the U.S., I would be out of office long ago. Now I have to stick to the “two 51%” in order not to fail the entire population. So I’m happy that you no longer insist on the “two 51%” issue, though it doesn’t have any practical impact, you indeed helped me out on this one. You could tell your insurance industry people that 51 or 50% aren’t really different. I have more friends in the American insurance industry than you do. There is not one big insurance company that I do not know; they’ve all come to me before. They’ll understand.
… Now I’m not speaking from the April 10th documents, but only on the issues where we have a difference in opinion – we both know what these issues are:
1. Automobile. This time you are telling me that this is President Clinton’s political base. Mr. Sperling, I respect your opinion; I compromise, because I respect President Clinton. We’ll reduce import tax to 25% by July 1st 2006 and agree to separate sales of automobile and auto credit… Specifically how to reduce the tax, here you are playing some tricks, is it Mr. Cassidy’s idea? [*Robert Cassidy, then assistant U.S. Trade Representative for China] You demand almost a complete reduction within the first two years; I think a flat reduction over six years would be more convincing, won’t it? I’m not persisting, why bother persisting on these small matters!
2. Special safeguard provision retainment years. Mr. Sperling, you were so mad about this, and must get “returns”, and I am prepared to make some compromise, but is the 15-year term absolutely non-deductable? We responded by proposing 3 years – that is too short. Maybe we can still work this out. Is it possible to reduce a year or two? What about a 10-year term? I think that’s more than enough, if China is not market economy by then, I’d be really pessimistic….
3. Music and movie. … I’m thinking: How important China-US relation is! If we can’t reach an agreement because of a cinema, or because of an Audio-video company, is it worth it? How about let’s say this problem is resolved in principle, with accordance to the April 10th document?
4. Banking. Foreign banks can provide RMB services to corporations within two years and to individuals within five years. I believe there shouldn’t be any more problems on banking; our offer is enough!
5. Securities. It’s very clear that giving permission to foreign securities firm to perform the same businesses the same as Chinese firms is “national treatment”. You included businesses that even Chinese firms aren’t allowed to do, that can’t work.
All these are the most contested issues and I’ve basically, or in principle, made compromises, and that’s all the compromises I could make. The only one issue we cannot make any compromise on, now or in the future, is the international ports of telecommunications. Please understand. Everyone, even the military, would not agree to it. [Zhu used “even”, not “including”. You can see the role/position of the military in relation to the government.]
Nov. 15th, 1999
ZHU: You told us that Ambassador Barshefsky was leaving tomorrow at 8AM. To disappear all of a sudden [the day before] and to leave the next morning without a farewell is very impolite! Mr. Ambassador, you are very experienced as a diplomat. Chairman Jiang called me past midnight yesterday to ask if we’ve found you. He was optimistic and planned to meet you after we reached an agreement. But you called to say that Ambassador Barshefsky planned to meet with Minister Shi [*Shi Guangsheng was then the Minister of Foreign Trade and Economic Cooperation] and would leave at 8:45 AM for the 10 o’clock plane. To be frank, that sounds like an ultimatum. Now I’m still confounded: this doesn’t like a negotiation, but a hide-and-seek. So I have to see you today, because this is absolutely necessary! Otherwise how do I report back to Chairman Jiang? Not telling us whether the agreement is reachable or impossible, and disappearing all of a sudden, is this serious politics? So I want to ask you in person what exactly you are planning to do. Thanks.
[After clearing up the misunderstanding and some discussion over the key issues of disagreements…]
ZHU: … Apart from these key issues, there isn’t anything important or anything that can influence the public opinion and the people’s interests. As for the less important issues, both sides can reach a win-win agreement in the spirit of mutual understanding and accommodation and according to Chairman Jiang and President Clinton’s conversation. To allow the unimportant issues to hinder our agreement is very unwise. Mr. Barshefsky is my old friend. As for Mr. Sperling, I met [him] last time and didn’t know him well. This time I get to know him more and have a deeper impression of him. Now I don’t have time to negotiate with you; I have to return to chair the meeting before it closes. [* Referring to a nation-wide regional leader meeting on domestic matters, which Zhu described as “far more important than WTO matters”. Zhu went out of the meeting to meet with the American delegation when Jiang was making a speech.] Can we reach an agreement now? Both sides do a press release. If you can accept our conditions, we can reach a historical agreement, achieve a win-win outcome, and solve other problems according to the mutual understanding and accommodation principle. Whether or not this can be signed, I hope you would give a clear answer, though this is not an ultimatum. Compared to Mr. Sperling, I normally have a bigger temper, yet I’ve not raised my temper with you, but [this time] even Chairman Jiang does not have the patience any more.
…
ZHU: Which premier in the world can discuss these matters with you in such details?
BARSHEFSKY: The only person is the President of the United States. He also understands a lot of details [of trade issues].
ZHU: He [President Clinton] is very smart. But if him debates with me on China’s entry into WTO, he may not win.
Allow me to make a few observations:
1. You can see how such high level politics in China almost seems personal: look at the way he talks about knowing Barshefsky personally, getting to know Sperling, respect for Clinton, and personal connections with the people in the American insurance industry.
2. Pressure from public opinion does affect China's foreign policy, contrary to conventional belief that the Communist regime has complete monopoly over the media and its strong propoganda apparatus and indoctrination/education system have everyone in the nation brainwashed.
3. From his way of speech, you can almost say that he is a little bit hot tempered, whereas Chairman Jiang Zemin seems to be the milder one. Zhu definitely seems very confident, and good at prioritization -- you can see that he was very stern on the key issues yet much more flexible on others (such as foreign investment in the insurance industry/telecommunications, etc.) than other Chinese bureaucrats.
What do you see from these negotiations?
