Zhu Rongji: A legacy of transforming China’s economy and forging relations with ASEAN

(Edited and refined by Josephine Hong, with the assistance of AI translation.)

Zhu Rongji, China’s former premier and member of the Chinese Communist Party’s Politburo Standing Committee, known for his tough, uncompromising image, passed away on 12 August at the age of 98. 

The official obituary highlighted his pivotal role in advancing reforms during China’s critical transition from a planned economy to a socialist market economy. It praised him for “shouldering heavy responsibilities and tackling tough problems with a strong sense of duty, doing everything possible to deliver practical benefits for the people”.

Outstanding reformist

The obituary described Zhu as “an outstanding member of the Chinese Communist Party, a long-tested and loyal communist fighter, an outstanding proletarian revolutionary and statesman, and an exceptional leader of the party and the state”. This was the same assessment officially accorded to former premiers Li Peng and Li Keqiang after their deaths.

Apart from Deng Xiaoping, the chief architect of China’s reform and opening up, Zhu was the best-known reformist among China’s top leaders and an important standard-bearer for economic reform in the 1990s. His last public appearance was in October 2018, when he met members of the advisory board of Tsinghua University’s School of Economics and Management in Beijing. According to the official obituary, he died in Beijing at 11.06 am on 12 August after an unsuccessful treatment for an illness.

A native of Changsha, Hunan, Zhu graduated from Tsinghua University’s Department of Electrical Engineering, where he majored in electrical engineering. During the Anti-Rightist Campaign, he was branded a “rightist” and expelled from the Communist Party. He was sent to work in the countryside during the Cultural Revolution. After reform and opening up, he returned to work in the central government’s economic departments, before serving as deputy party secretary, mayor and then party secretary of Shanghai. During his tenure in the city’s leadership, he had worked with Jiang Zemin. In March 1998, he succeeded Li Peng as premier, stepping down in March 2003.

Overhauling tax, finance and state enterprises

China’s official obituary highlighted that Zhu had served as vice-premier, member of the Politburo Standing Committee and premier during the crucial period of China’s transition from a planned economic system to a socialist market economy. It listed reforms in taxation and public finance, the financial sector, state-owned enterprises (SOEs), housing, grain distribution and social security that he had overseen or promoted, as well as his leadership in completing negotiations for China’s accession to the World Trade Organization (WTO). This underscored his key role as an executor of economic reforms during the Jiang Zemin era and in advancing China’s economic transformation.

The obituary also praised Zhu’s character and working style, saying that he “had deep affection for the public” and stressed that government workers must act as public servants, “dare to speak the truth, not be afraid of offending people, and not seek special privileges”, while taking on heavy responsibilities and tackling tough issues responsibly and deliver practical results.

Reform of the tax-sharing system, SOEs and the financial sector were three major components of the economic reforms advanced by Zhu Rongji.

The official obituary said Zhu comprehensively implemented “a major tax reform centred on a fair tax burden and a simplified tax system”, establishing a tax-sharing fiscal system based on a rational division of responsibilities between the central and local governments. Chinese media previously reported that Zhu had led delegations to 17 provinces and regions to determine the base amount for tax rebates during the reform. The changes redefined the fiscal relationship between the central and local governments, not only reversing the central government’s financial difficulties but also strengthening central authority and creating conditions for a range of reform measures.

SOE reforms was another far-reaching initiative during Zhu’s tenure. The merger and restructuring of large numbers of SOEs broke the traditional “iron rice bowl”, triggering a massive wave of lay-offs and becoming one of the more controversial policies of the Zhu reform era. The official obituary, however, said Zhu made SOE reform the central component of economic reform and accelerated the development of a modern enterprise system. At the same time, he established basic living allowances for laid-off workers and addressed wage arrears and the re-employment of laid-off workers.

Navigating economic turmoil and joining the WTO

After concurrently serving as governor of the People’s Bank of China in 1993, Zhu pushed for further standardisation of the central bank’s functions, strengthened macroeconomic and financial regulation, and deepened reforms to commercial banks, the foreign exchange system, and securities and futures markets. The obituary said he promoted the establishment of “a unified and open financial market system characterised by orderly competition and strict regulation”.

China faced problems including an overheated economy in the 1990s. The obituary credited Zhu with formulating measures to strengthen and improve macroeconomic control, saying he had done “a great deal of effective work” to reverse overheating, curb inflation and achieve a “soft landing”.

The obituary also highlighted Zhu’s effective response to the Asian financial crisis after becoming premier in 1998. It said that, in line with the Communist Party leadership’s plans, he shifted to proactive fiscal and monetary policies, expanded domestic demand and deepened reforms, while further opening up, encouraging exports and maintaining the renminbi’s value.

Zhu was a key architect of China’s entry into the WTO in 2001. An article on the Ministry of Commerce website previously revealed that during a visit to the US in 1999, Zhu said China had indeed made major concessions in the negotiations and had therefore been called a “traitor”. However, he believed that opening up and introducing competition would benefit the development of Chinese enterprises. The official obituary also positively assessed Zhu’s leadership in completing negotiations for China’s WTO accession, saying he had “promoted the expansion of opening up in both breadth and depth”.

Zhu was not in charge of anti-corruption work, and the official obituary did not list related achievements. However, it stressed that after retirement, he had “firmly supported efforts to improve party conduct, uphold integrity and combat corruption”. During his tenure, he also left behind the well-known anti-corruption remark: “I have prepared 100 coffins, 99 for the corrupt officials and one for myself.”

Forging relations with ASEAN

Zhu Rongji visited Singapore three times during his tenures as mayor of Shanghai and premier, leaving a deep impression on Singapore’s leaders with his strategic vision. In particular, his first mention of establishing an ASEAN-China Free Trade Area during the ASEAN Summit in 2000 caught ASEAN leaders by surprise.

During his speech at the Central Party School of the Communist Party of China in September 2012, then Singapore Prime Minister Lee Hsien Loong described Zhu’s push for China and ASEAN to begin free trade negotiations as a bold initiative. It was motivated not only by economic benefits but also the desire of both sides to forge a strategic partnership.

George Yeo, who was Singapore’s Minister for Trade and Industry in 2000, also recalled in an article for Lianhe Zaobao and ThinkChina marking the 30th anniversary of Singapore-China diplomatic relations in 2020 that Zhu’s proposal for a free trade zone at the ASEAN summit had initially left ASEAN leaders unsure how to respond. Singapore, however, saw a historic opportunity for regional stability. It took the lead in securing ASEAN’s positive response to Zhu by insisting on an early harvest package for the other nine ASEAN member states.

The China-ASEAN Free Trade Area was formally established in 2010. By 2025, total trade between China and ASEAN had exceeded US$1 trillion, with China retaining its position as ASEAN’s largest trading partner for 16 consecutive years. The two sides also signed the 3.0 Upgrade Protocol in 2025, covering new areas including the digital economy, green development and supply chain connectivity.

1997 financial crisis: pledge not to devalue the RMB

Zhu’s strategic vision was also fully demonstrated in China’s renminbi policy during the Asian financial crisis of 1997.

At the time, China faced immense pressure as currencies across Southeast Asia depreciated sharply and exports were hampered. Zhu pledged that China would not devalue the renminbi, a decision that won high praise from the Singapore government.

Then Prime Minister Goh Chok Tong, in a speech at a dinner welcoming Zhu in November 1999, said that the decision not to devalue the renminbi had helped contain the impact of the financial crisis and contributed to the region’s economic recovery. He said, “China’s resolve is most impressive and its contribution to regional economic stability will be long remembered.”

Earlier, when Zhu was mayor of Shanghai, he took a particular interest in Singapore’s Central Provident Fund (CPF) system and public housing. On his first visit to Singapore in 1990, he focused on studying the country’s public housing construction and CPF management model, and Shanghai became the first city in China to pilot a housing provident fund scheme. When he returned in 1999 as premier, he not only visited the Toa Payoh public housing estate and called on three households, but also invited a Housing and Development Board delegation to Beijing to share Singapore’s experience in developing public housing with China.

This article was first published in Lianhe Zaobao as “官方讣告突出朱镕基经改角色 赞“挑重担子、啃硬骨头”” and “首提建立中国—亚细安自贸区 朱镕基战略眼光让我国政要印象深刻”.

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