Zhu Rongji's legacy: How the architect of modern Chinese economy created a richer, more divided nation

Zhu Rongji, the fifth Chinese premier who died on Wednesday at the age of 97, leaves behind a profound legacy as the key architect of China’s economic modernisation. Zhu, who served as premier from 1998 to 2003, arrived at the job already carrying a reputation for ruthlessness and rectitude that made him as feared as he was admired, and he left having reshaped China more decisively than almost anyone since Deng Xiaoping.

His defining achievement was steering China into the World Trade Organisation in 2001. The negotiations were gruelling, and one aide later compared the haggling with western counterparts to bargaining in a vegetable market. Zhu overcame fierce resistance at home from officials who feared exposing state industry to foreign competition, and he emerged with a deal that opened western markets to Chinese goods. The effect was immediate and lasting. Exports surged, the economy doubled in size within five years, and by 2010 China had overtaken the United States as the world's largest manufacturer.

A former American trade representative later admitted that Zhu had simply outsmarted the negotiators across the table, extracting access without conceding nearly as much as Washington had hoped. China's subsequent failure to honour several of its WTO commitments, particularly on opening government procurement, sowed the trade grievances that would erupt into open conflict with the United States years later.

Before he reached Beijing, Zhu had already made his name in Shanghai, first as mayor and then as party boss. He cut through the red tape that had kept the city stagnant and turned Pudong from marshland and warehouses into the glass-towered financial district that now defines the Shanghai skyline. When the Tiananmen Square protests erupted in 1989, Zhu chose persuasion over force, appealing to students on television rather than sending in troops, and Shanghai avoided the bloodshed that scarred Beijing. It was an early sign of the pragmatism that would mark his career, a willingness to bend when needed, coupled with an unyielding core underneath.

That core showed itself most clearly in his handling of inflation and corruption. In 1993, as vice premier, he inherited an economy with prices spiralling at 25 per cent a year. He clamped down on government spending, tightened bank lending to loss-making state firms, and briefly controlled staple food prices, engineering what economists still cite as a textbook soft landing. Officials who crossed him rarely survived the encounter. He fired a provincial party boss in Heilongjiang on the spot for missing targets, and sacked another for flaunting an ostentatiously expensive cigarette lighter. He liked to say he had prepared a hundred coffins, ninety-nine for corrupt officials and one for himself, a line that did more for his popular standing than any policy document could have.

However, the reforms that built modern China's wealth also inflicted real damage. Zhu's overhaul of state-owned enterprises closed or privatised thousands of loss-making companies, and the layoffs that followed are estimated at anywhere between 30 and 60 million workers, many of whom never found stable work again. He pushed through the privatisation of housing, too, transferring state owned flats to workers at token prices, which built a homeownership boom that gave millions of older Chinese a financial cushion even as their factories shut around them. By the time he retired, Zhu conceded that he had not managed to close the gap between the booming coastal cities and the rural interior he had grown up hearing about, a gap that persists to this day.

Among his most consequential miscalculations was the 1994 tax overhaul that concentrated revenue in Beijing and left local governments starved of funds. The solution he proposed, allowing municipalities to borrow against land sales to developers, financed decades of infrastructure but also built the foundations of the debt and property crisis that has haunted China since 2021.

Politically, Zhu never wavered. Western commentators occasionally called him China's Gorbachev, a comparison he loathed. Having spent years in re-education camps after being branded a rightist under Mao, he viewed Gorbachev's dismantling of the Soviet Union with contempt, and he used every economic lever available to him to strengthen the party's grip rather than loosen it. Reform, for Zhu, was never meant to lead anywhere near democracy.

What he leaves behind is a China unmistakably of his making: richer, more connected to the world, and haunted by exactly the imbalances his own choices set in motion.