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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?


To: hui zhou who wrote (9367)9/24/1999 12:05:00 AM
From: CIMA  Read Replies (2) | Respond to of 9980
 
Jiang Consolidates Power, But Can He Hold It?

Summary:

China has officially extended the National Day holiday by one day,
to Oct. 1-3. The government has also announced that an additional
four days will be added this year, giving workers an extended Oct.
1-7 vacation. The suddenness and the length of these holidays
suggest that there is more going on than a simple workers' holiday.
With the nation effectively shut down for a week, the groundwork
has been laid for Chinese President Jiang Zemin to firmly
consolidate his hold on power.

Analysis:

Chinese government offices and businesses will be closed
from Oct. 4-7, the government announced, extending the scheduled
Oct.1-3 National Day holiday by four days. According to Chinese
officials in the United States, the longer vacation is because the
actual holiday falls on the weekend. Sources inside China have
suggested the last minute extension was the result of a heated
debate in the National People's Congress. The winning faction
claimed that the weeklong holiday was "in order to spur consumer
spending." With the sudden announcement of such a long vacation so
soon before the celebration, neither explanation is particularly
convincing. This is especially true given the ongoing power
struggles in Beijing and suggests something more extraordinary is
about to happen.

President Jiang Zemin, who has been strengthening his grip on power
for some time, has referred to 1999 as a make or break year for the
Communist Party of China (CPC) and for China as a whole. To do so,
he has appointed his allies to high level military positions
[ stratfor.com ] and
slowly stripped power away from Prime Minister Zhu Rongji and the
economic reformers. Since early this year Jiang has played an
important role in the reorganization of officials, even down to the
county level in civil society and divisional level in the army
[ stratfor.com ].

A massive celebration in Beijing is planned for October 1, 1999,
the fiftieth anniversary of the founding of the People's Republic
of China. Security preparations in Beijing began as early as
January when the city government started conducting a systematic
cleansing of all unofficial and migrant residents.
[ stratfor.com ] A final
sweep by deputized citizens is currently underway. In addition, both
the paging system and gas supplies will be shut down Oct. 1 as the
500,000 strong parade marches through Tiananmen Square. Buildings
within two miles of the parade route will be emptied by noon Sept.
30. The city has been meticulously cleaned and modern billboards
have been removed.

Beside efforts in Beijing, China has conducted nationwide
crackdowns on potential ethnic separatists, opposition political
movements, and religious organizations. All domestic travel to
Beijing has been banned from Sept. 20 to Oct. 5, although
foreigners and those traveling from Hong Kong, Taiwan and Macau
will still be allowed into the city. In order to ensure nothing
unexpected happens during the celebration, Beijing has made a point
of not inviting foreign dignitaries to the celebration, though they
are still allowed to attend.

Tightened security and other advance preparations support the idea
that Jiang is about to make a move and perhaps fulfill a
longstanding rumor that he wants to become the Chairman. Pictures
to be displayed during the celebrations have been kept secret, but
there is talk that Jiang's face may appear next to those of Mao and
Deng. In addition, Jiang's wax likeness is conspicuously absent
from the Museum of the Revolution's Great Men of China exhibit,
suggesting a new likeness is being prepared. Adding to the
importance of the position of Chairman, China is keeping its banks
open Oct. 1 to release new money, including a redesigned 100 yuan
bill featuring a solo picture of Mao, instead of the pictures of
Prime Minister Zhou Enlai, former President Liu Shaoqi, and former
Marshal Zhu De.

While the transportation infrastructure will reportedly remain in
operation during this lengthened vacation, the Chinese have
traditionally reacted to such extended holidays by visiting family
or staying home. The Shanghai and Hong Kong stock exchanges are
officially closed Oct. 1-3, though a Chinese diplomatic official in
the United States suggested the Shanghai market may be closed for
the entire seven days. The move to effectively close China for a
week suggests an extraordinary event is about to unfold in Beijing,
one that will have nationwide repercussions.

The National Day celebration gives Jiang the prime opportunity to
re-establish himself as head of the government, quite possibly
taking on the title of Chairman. Aside from its obvious symbolic
effect, it would allow Jiang greater leverage in returning to a
centralized control structure. Taken to the extreme, Jiang could
erase Deng from Chinese history. But stripping power from Zhu and
revising the central planning role of the Communist Party is
effectively the same thing.

If Jiang is bold enough to declare himself Chairman, essentially
ending economic reforms, it is not Beijing he has to fear, but
China's economic centers like Shanghai, Guangdong, and even Hong
Kong. The threat of a redistribution of wealth from the coast to
the interior, already a part of Jiang's plans, could trigger a
response from those directly affected, including civilian
businessmen, high-ranking People's Liberation Army (PLA) officers
and Communist Party officials. By shutting down the country for a
week, Jiang could identify and suppress any opposition from these
economic strongholds. With the markets closed for a week, capital
flight could be prevented and it would allow time to convince the
international community that despite the shift to centralized
control, investments remain safe in China.

While it is unclear what will happen on National Day in China, it
is clear that Jiang has been making obvious moves to consolidate
power over both military and economic matters. The international
community will be eyeing the events in Beijing to see China's
future. Sources in China have said that the government of Singapore
has warned its citizens to be prepared to leave, further suggesting
a major upheaval within the government structure. The question is
whether Jiang can maintain his increasing grip on power and resolve
the power crisis in Beijing.

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To: hui zhou who wrote (9367)9/25/1999 6:55:00 AM
From: Bosco  Read Replies (1) | Respond to of 9980
 
G'day all - re: HK rescue team late showing. One just has to wonder the possible reasons of this tardiness. Granted that HK was hit by a Typhoon recently, it would be a good gesture. Could it be the bad blood between Tung and Taiwan?

best, Boscp