BEIJING — China’s economy hit a two-decade low earlier this year, with modest 7.5 percent growth in the three months from April to June.
While many countries would celebrate such numbers, in China, where 2009 growth was 14.2 percent, the slowdown has led to worries about the future of the world's second-largest economy.
Economists say the country's economic model is at a crossroads and structural reforms need to be pushed deeper. For guidance, some are looking back at former premier Zhu Rongji, who helped transform the economy in the 1990s.
Model of economic growth
Prominent economist Mao Yushi believes China has come a long way thanks to the bold economic policies adopted by Zhu Rongji.
He said the former premier introduced privatization of state-owned enterprises, partly opened the state-controlled economy to free market forces and allowed for historic rises in wages for Chinese workers.
“From Jiang Zemin to Hu Jintao, in the last 30 years, they’ve done very well with China’s economy, especially Zhu Rongji, who launched the marketization process. With regard to the GDP, they’ve totally changed the country,” he said.
Others are also taking notice of the former premier. A book collecting Zhu Rongji’s speeches from his time as the mayor of Shanghai between 1987 and 1991 went on sale in August and became a best seller within days.
Many economists say his reforms should be taken further. These include breaking up vested interests in China's state owned enterprises, allowing new businesses into vital sectors such as finance and natural resources, and sharing fiscal revenues more equally between the central government and local governments.
Historian Zhang Lifan said Zhu Rongji can provide an example, and this why the new book emphasizing his tenure in Shanghai has become so popular.
“The new leadership believes economic reform should start from urbanization; the most important lesson they can draw from Zhu Rongji is how to develop cities, how to run and develop the urban economy and also how to create a free trade zone in Shanghai. On these issues he’s quite eminent,” said Zhang.
People also praise Zhu’s personal style and character, as an inspirational leader who had the courage to take responsibility.
Zhang Lifan believes that over the past decade, China has undergone a leadership crisis that the Communist Party is now trying to unravel.
Zhang said China's two most recent leaders, Hu Jintao and Wen Jiabao, were perceived as weak and people thought they were not very capable.
“So now in the system there is a trend of showing power, they hope to find someone as strong as political commander Mao Zedong or economic czar Zhu Rongji,” said Zhang.
In order to create such a strong model, the popularity of Zhu Rongji’s book is becoming very relevant to the party's needs, he added.
Although China’s economy did benefit from premier Zhu Rongji’s economic policies, some of his critics note that his time as premier was not perfect.
Yang Jisheng, a former Xinhua journalist, believes severe social problems such as corruption, forced evictions and unequal distribution of wealth are the result of Zhu’s strategy. He championed economic growth without pressing for political reforms.
“Zhu Rongji concentrated all the power in central government’s hands and left local governments poor and in trouble. He had a very strong mind for a planned economy and a preference for the central government,” he said.
That has led some to say that following Zhu Rongji’s models could be devastating for China’s advancement.
“If we don’t change the political system, economic reforms will fail,” said historian Zhang Lifan.
Next month, Communist Party leaders will gather for a major meeting to decide on an economic blueprint for the next five years. Zhang fears their agenda will be too full of economic dilemmas, so much so that party leaders will not see the urgent need to reform the political system.