Hu Jintao's Goal: Build a 'Moderately Prosperous Society'
China's president talks about foreign investment, deregulation, and his country's foreign exchange reserves, but he doesn't mention Mao.
By Justin Fox
A student of Chinese history might think a lot happened in the country between 1949 and 1978: the Hundred Flowers Campaign; the Great Leap Forward; and the Cultural Revolution. But in his opening speech at the FORTUNE Global Forum in Beijing today, President Hu Jintao rather pointedly declared that those days don’t matter anymore.
In a quick survey of 5,000 years of Chinese history, Hu skipped straight from 1949, when the Communists gained full control and “the new China was proclaimed,” to 1978, when Deng Xiaoping began his “reform and opening-up program.” Mao Zedong’s portrait may still loom over Tiananmen Square, but he doesn’t even rate a mention now when his successor addresses foreign businesspeople in the Great Hall of the People on the square’s west side. “In a sense, what an admission,” said Anthony Saich, director of Harvard University's John F. Kennedy School of Government's China Public Policy Program, who sat behind me in the bus on the way back to the hotel after the speech. “It’s almost like saying, ‘We wasted 30 years.’”
Hu’s speech was also remarkable for its brevity (it lasted a mere 14 minutes); his repeated citing of detailed economic figures (China’s foreign exchange reserves now total $609.9 billion); and his use of the phrase “FORTUNE 500” (as in, “over 400 firms out of the FORTUNE 500 have invested in China.") That China has changed a lot lately is so obvious as to be almost not worth mentioning. But there’s still something really strange about hearing the nominally Communist country’s leader wax poetic about foreign direct investment and deregulation. I guess we’d better get used to it.
As befits a regime committed to keeping multinational corporations happy, China’s government is making a really big deal of this conference. The expressway from Beijing Capital International Airport into town is lined with FORTUNE Global Forum banners. Today’s edition of the China Daily, the government’s English-language mouthpiece, is largely devoted to the event. To quote from the lead article in the ever-enthusiastic Daily: “More than 800 participants—CEOs, chairpersons and presidents of Global 500 firms and domestic enterprises; top government officials; and renowned scholars—will be brainstorming on various issues.”
But there’s really just one issue that will dominate the conference, which runs through Wednesday afternoon: China. The country’s big and growing consumer market, plus its huge and cheap workforce, have made it an obsession among the world’s CEOs. As a result, the sort-of-annual CEO powwow that is FORTUNE Global Forum has become a largely China-centric event: Three of the last five forums have been held here (the previous two being Shanghai in 1999 and Hong Kong in 2001).
Because it’s being held in the capital, though, this year’s event is characterized by a heavy involvement of Chinese officialdom. While that has its downsides—the bureaucratic hassles and recitations of fulsome platitudes and 10-point plans have already begun—it’s certainly not all bad. For one thing, the event venues are swell places like the Great Hall of the People, the Temple of Heaven, and the Diaoyutai State Guest House (the in-town Chinese answer to Camp David)—and we can count on regular police escorts. For another, it’s worth being reminded of just how great the challenges facing China really are.
To corporate executives, politicians, and workers around the world, China may look like a fearsome economic juggernaut. But the people responsible for running the place know the real score: However amazing it is that a couple hundred million Chinese have risen to affluence in the past couple of decades, that still leaves a billion people stuck in poverty. The government’s goal over the next 20 years, Hu said in his speech, is to “seize the important window of strategic opportunities to build a moderately prosperous society.” By “moderately prosperous,” Hu said he meant about $3,000 a year in per capita GDP—about one-thirteenth of current U.S. per capita GDP.
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