Jiang Struggles to Maintain Grip on PLA
Summary:
In an attempt to consolidate control over the People's Liberation
Army (PLA) by enhancing its dependence on Beijing, Chinese
President Jiang Zemin, in July 1998, ordered the PLA to divest
itself of its many businesses. This plan has backfired, with
officers looting the businesses before turning the indebted and
overstaffed shells over to the government. Now with the PLA
demanding the compensation it was promised for divestiture, Jiang
is struggling to maintain control of a brewing crisis fraught with
both domestic and international implications.
Analysis:
China's Central Military Commission (CMC), headed by President
Jiang Zemin, issued a directive on September 1 reasserting the
Chinese Communist Party's (CCP) leadership over the People's
Liberation Army (PLA). The directive insisted that the PLA "is the
people's army under the absolute leadership of the party, and
embodies an important force of the political superiority of the
party and state government." The directive outlined how the PLA
had adapted to the past 20 years of reform and "opening up," but
urged the PLA leadership to develop an ideology that allowed
modernization within a socialist market economy and complete
obedience to the CCP.
Jiang's insistence on strengthening the PLA's obedience to the CCP
begs the question, "Wasn't it already obedient?" And the dictum,
"If it isn't broken, don't fix it," applies here doubly, as Jiang
is focusing first and foremost on domestic political stability in
the run-up to the October 1 celebrations of the 50th anniversary of
communist China. One month from the anniversary, with tensions
brewing across the Taiwan Strait, the Chinese economy quietly
melting down and security forces rounding up everyone who could
vaguely be described as dissident, Jiang has very publicly
suggested that the PLA could be a bit more loyal.
A serious rift has surfaced between the military and Jiang, sparked
by the backfire of his 1998 initiative to bring it under his
control. In July 1998, Jiang ordered the PLA to divest itself of
its business empire, estimated to number some 15,000 enterprises
with estimated combined annual revenues of $25 billion - well in
excess of the official US$9.7 billion annual military budget.
Under Chairman Mao, the PLA had orders to establish its own farms
and textile mills so as not to burden the government budget and, by
extension, the peasantry. Under the economic reforms of Deng
Xiaoping, the PLA was allowed to expand even further to relieve the
national budget, increase employment and speed industrial growth
and business development. The trouble is, as the PLA's business
empire grew, so did corruption in the ranks and, more ominously,
independence from Beijing's control.
With economic trouble - and the inevitable accompanying unrest - on
China's horizon, Jiang wanted to strip the regional military
commanders of their financial independence. The roughly 3 million-
strong PLA would be dependent on Beijing for its budget -
supposedly bolstered by revenues from the PLA's former enterprises
- thereby avoiding the rise of powerful, regional generals.
China's history is a series of central administrations asserting
power only to have it ripped away by regional warlords.
The plan backfired. Jiang underestimated the corruption and
avarice that had permeated the PLA. He was rudely made aware of
the extent of the problem when, in early April of this year, the
CCP and PLA commissions, tasked with auditing PLA enterprises,
reported wanton and systematic embezzlement, false accounting and
bad debts. Moreover, since receiving the divestiture order, the PLA
engaged in full scale asset-stripping, hiding the proceeds abroad
and extensively borrowing on the expectation that they would never
have to repay the debts. The government was left with deeply
indebted, overstaffed shells of businesses, many committed to
extensive and costly social welfare programs. The PLA, having
relinquished its business empire as ordered, then had the gall to
demand compensation for the businesses as well as the promised, and
now necessary, increases in the defense budget.
Jiang's attempt to gain control fell victim to the PLA's corruption
and decay, and he is now faced with a worse situation than before
he ordered the divestiture. Jiang must now pay off the commanders
for their "losses," while funding the PLA at a higher level and
injecting funds into remaining enterprises in order to stave off
massive unemployment. It is no wonder Jiang is concerned about PLA
loyalty.
Jiang's first response has been to hand over the problem and a fair
share of the blame to Prime Minister Zhu Rongji. Ironically,
according to diplomatic and military sources cited by the South
China Morning Post in July 1998, Zhu adamantly opposed Jiang's
decision to strip the PLA of its businesses. Zhu had reportedly
argued that China could not spare the hundreds of billions of yuan
promised to the PLA for closing down its enterprises. He could not
have expected how badly the situation would evolve.
Now Zhu is negotiating with PLA generals over their demands for
budget increases and new, high-tech weapons. The generals are
reportedly also asking to be allowed back into business - one would
expect new enterprises founded with their ill-gotten gains, rather
than the derelicts they left the central government. The generals,
remembering that the last cross-Strait crisis won them prestige and
healthy budget increases, are also reportedly beating the drum with
regard to the current crisis and seeking a greater role in future
cross-Strait relations. Zhu has reportedly balked at this, deeming
increased tensions a threat to continued Taiwan investment in China
- a position derided by the generals as unpatriotic. The PLA's
battle over Taiwan policy may go far in explaining the recent
oscillations in that policy.
According to the South China Morning Post, Jiang has refrained from
mediating between Zhu and the military. He is letting Zhu take the
heat. However, even if Zhu takes the blame for the problem and is
unseated, an altogether likely outcome considering the pressure he
faces for China's poor economic performance, the problem will not
disappear. Jiang cannot shirk responsibility for long, nor can he
easily solve the problem. His own position may be in jeopardy.
Jiang's attempt to rein in the PLA has only made the military more
assertive, threatening not only to unseat Jiang and others, but
also to unhinge Beijing's management of the Taiwan crisis. The
battle between Jiang's conservatives and Zhu's reformers is paling
in comparison to Beijing's struggle with the PLA.
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