In 1987, Zhu Rongji delivered an important speech during his campaign for Shanghai mayor, which demonstrated his sincere, pragmatic, and independent-thinking leadership style. In the speech, Zhu Rongji self-confessed and frankly expressed his vision for the future development of the Party and Shanghai. He mentioned that he was not naturally suited to be a leader, but he constantly improved himself through hard work and practice, making up for his shortcomings.
At the beginning of his speech, Zhu Rongji emphasized that he had always adhered to the belief of “independent thinking.” He said that he should speak what he thought in his heart. He recalled the difficulties he experienced during his growth—losing his parents early in life, never seeing his father, and having no siblings. This difficult experience shaped his resilient character.
“I have always believed that the Party is like my mother,” Zhu Rongji said. “In 1947, I found the Party, and this organization accepted me and gave me direction and motivation in my life.”
Zhu Rongji’s words laid the foundation for his performance in the election. He did not conceal his shortcomings, emphasizing that he often became too strict and lacked a gentle leadership style in his work because he was eager for quick results, and often used overly harsh criticism to urge his subordinates. However, he also said that he would continue to improve these aspects in his future work.
“I know that my personality is a bit impatient, and sometimes I am too harsh in my work, and I must improve,” Zhu Rongji said in his speech. He pointed out that the leader’s responsibility is not only to promote work, but also to care about the growth and emotions of cadres, and criticism should be mainly to help, rather than just to blame.
During the speech, Zhu Rongji also mentioned that he had a similar personality to Jiang Zemin, and he frankly said: “We both have a bit of impatience, but we both hope to change this country through reform and make it more prosperous.”
Zhu Rongji’s words also won the tolerance and understanding of Jiang Zemin. Jiang Zemin responded that it is not necessarily a bad thing to strictly require cadres, and the most important thing is to pay attention to the way of criticism to avoid hurting others’ self-esteem.
This election speech also revealed Zhu Rongji’s extraordinary ability to speak without a script. At that time, it was not common for senior Chinese leaders to speak without a script. Mao Zedong and Deng Xiaoping were good at speaking without a script. Zhu Rongji relied almost entirely on his understanding of policies and his confidence in speaking in public during this speech.
In addition, Zhu Rongji also emphasized Shanghai’s strategic development in the future and put forward pragmatic governance goals. He believed that Shanghai should not pursue excessively high goals, but should do every job well in a down-to-earth manner, avoid setting unrealistic goals, so as not to disappoint the citizens and affect the morale of the work. This view is not only for Shanghai, but also for the economic reform of the whole of China.
Zhu Rongji’s political wisdom and sincere attitude won widespread recognition, and his leadership style was deeply appreciated. He pointed out in his speech that China’s reform and opening up requires not only the wisdom of politicians, but also the efforts and support of every citizen. In contrast, Zhu Rongji also criticized some situations in Hong Kong at that time, believing that Hong Kong needed to rely on its own system to solve the current difficulties.
Although there was no actual competition in the mayoral election in Shanghai at that time, Zhu Rongji showed people his potential as a leader through this speech. His sincerity, pragmatism, and determination to reform allowed people to see that he could lead Shanghai to a more prosperous future.
Zhu Rongji’s leadership style was fully utilized when he later served as the Premier of the State Council of China. As Premier, he profoundly influenced the process of China’s reform and opening up and promoted the modernization of China’s economy. He was hailed as the “chief engineer” of reform and opening up and made a great contribution to China’s modernization. Even in the thousands of years of Chinese history, Zhu Rongji can be ranked among the top ten leaders.
In short, Zhu Rongji’s election speech not only demonstrated his personal leadership style, but also reflected his deep consideration and practical experience as a reformer and pragmatist. These qualities were fully reflected during his tenure as Premier and promoted China’s economic reform and social progress.
Today, we will continue to talk about the story of Zhu Rongji and his era of reform.
In April 1991, Zhu Rongji was ordered to Beijing to serve as Vice Premier of the State Council.
Then in 1992, he was directly promoted from an alternate member of the Central Committee to a member of the Standing Committee of the Political Bureau of the Central Committee.
This is almost unprecedented in the history of the Communist Party of China. It should be said that Deng Xiaoping made an exception to promote him and entrusted him with important responsibilities.
But at that time, the Chinese economy should be said to be a mess.
First of all, there were 300 billion yuan of triangular debts across the country.
What is triangular debt? It means that you owe me money, he owes his money, and then he owes another person money.
In the end, the entire capital chain was broken and locked, and there was no credit, and the entire economic order also fell into chaos.
The second aspect is hyperinflation.
In those years, due to the overheating of the economy, the issuance of currency itself was not planned, which led to the soaring of prices.
In addition, at the beginning of the price reform and opening up, the prices could fluctuate from the planned economic control prices to the market prices.
So prices soared. By 1993, China’s inflation rate had reached 21.4%.
What is the concept of 21.4%? It is almost that your currency depreciates by 1/5 to 1/4 in a year.
That is hyperinflation. You must know that if this hyperinflation cannot be controlled, China’s economic reform will almost fail.
The third aspect is that at that time, the bad debt rate of all Chinese banks was as high as 30%.
This has also entered technical bankruptcy.
The fourth aspect is that at that time, enterprises, due to the dual-track price system, on the one hand, state-owned enterprises were not efficient, but at the same time, corruption was rampant.
Because there were differences between the internal and external prices, all kinds of things like official profiteering came.
So under this passive situation, Zhu Rongji became the Vice Premier of the State Council of China, in charge of economy and finance.
After Zhu Rongji took office, he first had to break through one level after another. His first battle was to deal with the problem of triangular debts and inflation.
When dealing with the problem of triangular debts, Zhu Rongji had a general named Shi Wanpeng.
Shi Wanpeng proposed a plan to Zhu Rongji at that time, saying that there were a total of 300 billion yuan of triangular debts,
You give me 100 billion yuan now, and I will use a 100 billion yuan capital injection plan to solve the 300 billion yuan of triangular debts.
What is the reason? He said: Look, this debt is that you owe me, I owe him, A owes B, B owes C, and C owes A.
Then at this time, we inject 100 billion yuan into A, and he has money to pay B, B has money to pay C, and C has money to pay A.
Then wouldn’t this triangular debt be solved?
Zhu Rongji thought it made sense, so he asked Shi Wanpeng to do this plan.
But he didn’t expect that this plan would not succeed. Why didn’t it succeed?
Because when these enterprises got the money, they didn’t use the money to repay the debt.
Because the enterprises at that time all had their own little calculations, and they were all contracted.
So he took the money given by the state for nothing, and he went to do other investments and other trades.
As a result, not only was the triangular debt not solved, but new triangular debts were added.
So soon after Zhu Rongji came to power, he went to Liaoning to inspect.
The inspection results found that Shi Wanpeng’s plan did not work, so he changed his strategy after returning.
He told Shi Wanpeng, ‘This kind of plan doesn’t work, we have to change our thinking’,
What kind of thinking?
It is to fundamentally solve this problem: who owes the debt, who must pay it back.
Since you have owed the debt, you have the obligation to pay it back.
What if you don’t pay it back? If you don’t pay it back, the enterprise will go bankrupt.
That’s a shocking sentence. Now, it’s commonplace for an enterprise to go bankrupt.
But for China in the 1990s, public ownership still occupied the main body.
At that time, private enterprises had not yet been established, and everyone believed that public ownership was the cornerstone of the entire socialist economic system.
Can this cornerstone of the economic system go bankrupt? Doesn’t your bankruptcy mean that public ownership has failed? Can public ownership fail?
But Zhu Rongji insisted at the time, ‘Whoever owes the debt must pay it back’.
If you owe the bank’s debt, the bank has the obligation to repurchase it.
If you don’t repurchase it, I will ask you.
At the same time, he hoped to completely solve this problem in three years.
At that time, the banks all thought it was impossible to solve, but Zhu Rongji gave a death order.
He brought the set of work style from Shanghai to the central government.
Following that, how to solve the 30% bad debts of the banks?
Zhu Rongji inspected the bad debts of these banks, and he found that 70% of the bad debts came from the government’s policy-based loans.
The government let the banks lend money, and they couldn’t get it back, and the banks didn’t need to be responsible.
So Zhu Rongji made a reform.
What reform? First of all, he himself served as the governor of the People’s Bank of China, in the capacity of a member of the Standing Committee of the Political Bureau.
He transformed the People’s Bank of China into the central bank of the United States.
Because the People’s Bank of China in the past also had savings business, he didn’t do it, but turned it into a policy bank.
An institution that formulates China’s monetary policy.
Secondly, he brought the four major state-owned banks of China, Industrial and Commercial, Agricultural, and Construction, and said: ‘Separate all your policy-based loans from here,
and you are not allowed to do it in the future. We will establish the China Development Bank.
All your banks will become commercial banks.’
In other words, you will make the decision on loans in the future,
You judge for yourself whether this thing can be lent.
That means you are responsible for whether this loan can be recovered.
If you can’t recover it, then your own bank will lose money, and you will bear it.
In this process, he stripped all the 300 billion yuan of bad debts from these banks at that time.
An asset management company was established, and this asset management company operated and handled these bad debts.
Then the most basic financial system in China was also established.
This was only in two or three years.
The third aspect is that he controlled this hyperinflation.
At that time, he also had several economic generals under his command, such as Lou Jiwei and others?
It is said that he wrote the thirteen articles of macro-control in one night, and later added two more, becoming the fifteen articles of macro-control, and began to be promulgated.
In the fifteen articles of macro-control, for example, to tighten the money supply, control the money supply, and so on.
It should be said that it was very effective in controlling the overheating of the economy at that time.
Then China’s inflation reached a peak in 1993, and began to decline in 1994.
By 1997, the inflation rate had dropped to a negative value, and the era of deflation had entered.
It should be said that the battles Zhu Rongji fought when he first took office were very beautiful.
Following that, he began to work on the institutional level.
What is the institutional level? The first aspect is the reform of the tax-sharing system.
We talked about it in the previous episode, the tax system in China is the contract system in the city.
This contract system means that after a portion of the money is handed over to the central government’s finance, the rest is all local, and the local government can spend it as it wishes.
What problems does this bring? First of all, local finance faces these enterprises and has very large tax exemptions.
They don’t want to collect too much tax, and they don’t have much benefit to hand it over to the central government,
So they start to exempt taxes at will.
The second problem is that the money collected by local governments actually has no motivation to invest in people’s livelihood.
They invest themselves, and they are a self-service government.
I had a very deep impression when I worked at the CCTV Focus Interview.
In 1998, I went to Jiangsu to interview, and the teachers at the town and township levels in Jiangsu were owed wages.
So the local township government came up with a trick.
What trick? Let these teachers go to their students’ homes to collect debts.
The local township government had no way, because you only have to get the village accumulation fund up to have money to pay the teachers’ wages.
In other words, Jiangsu Province is still a relatively rich province,
It will not give priority to the payment of teachers’ wages, which is the social reality at that time.
So Zhu Rongji proposed at that time that China should carry out the reform of the tax-sharing system.
Because the central government’s finances at that time were already stretched, and there was no money.
It accounted for only 20% of the total national fiscal revenue.
There was a period of time when the central government borrowed money from the local government, and Deng Xiaoping went to the Shanghai municipal government to say hello,
Borrowed 1 billion yuan from the Shanghai municipal government. There was no money, so what to do?
So Zhu Rongji began to propose the reform of the tax-sharing system.
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