Bloomberg BusinessWeek asks whether Premier Wen Jiabao’s recent bold proclamations will have any impact or are just part of an effort to ensure his legacy as a reformer:
First came his remarkable and likely last press conference, at the closing of the National People’s Congress last month. With an intensity of bearing suggesting he meant business, Wen launched into a spirited defense of the necessity of China’s continued economic reform, hearkening back to the Third Plenum of the 11th CPC Committee, a crucial meeting that launched the country on its modern-day path toward opening. More surprisingly, the 69-year-old premier also touted the need for political reforms, saying they must go hand in hand with economic ones—although he did not specify what those political reforms should entail.
But what really caught observers’ attention: Wen’s raised the topic of the decade-long tragedy of China’s Cultural Revolution, long a taboo subject, and warned its excesses could return.
[…] The latest Wen surprise: his call, made in a broadcast April 3 on state-run China National Radio, for a breakup of the monopoly of China’s state-owned banks, saying it is crucial that the financing system start to serve private and smaller companies more fairly rather than just cater to the giant state-owned corporations. “Let me be frank. Our banks earn profit too easily. Why? Because a small number of large banks have a monopoly,” Wen said. That echoes a call made earlier this year by the World Bank and the Development Research Center of the State Council, China’s cabinet, which argued that foot-dragging on financial reform is choking off China’s economic vitality.
International economic bodies are expected to advocate such dramatic change, but Wen’s usually blunt criticism of the financial system that underpins party control of China’s economy—where state-owned banks distribute largesse to state-owned companies—was unusual for a top party leader, to say the least.