Zhu Rongji

Zhu Rongji was an important figure in China’s macroeconomic governance and institutional reform in the early 1990s. According to Weijian Shan’s recollection in a conversation in 2026, Zhu Rongji came to Beijing in 1991 as Vice Premier of the State Council, and the first challenge he faced after taking office was clearing up “triangular debt.” At that time, triangular debt nationwide had reached 300 billion yuan, while national GDP in the previous year was only 1.8 trillion yuan. After extensive research, Zhu Rongji found that a major root cause was that local governments had launched many infrastructure projects without sufficient matching funds; contractors could not get paid and so did not pay their upstream suppliers, who in turn did not pay those further upstream, so debts piled up layer upon layer. He therefore tackled the problem at its source, focusing on clearing arrears on fixed-asset investment projects.

According to the same recollection, Zhu Rongji’s Speeches includes the speech Zhu Rongji gave at the national work conference on clearing triangular debt convened by the State Council. Over the two years from 1991 to 1992, the government injected a total of 55.5 billion yuan in debt-clearing funds (mainly from bank loans) and cleared a combined 219 billion yuan of arrears in fixed-asset investment and working capital. This process not only averted risks such as economic disorder but also reshaped social credit and market rules, clearing obstacles for subsequent fiscal, tax, financial and state-owned enterprise reforms.

In Weijian Shan’s account, the resolution of the triangular debt problem created the conditions for state-owned enterprise reform, while the tax-sharing reform, the reform of the financial market system and even the environmental protection system were also gradually established and improved during this period in the course of addressing and solving specific problems. In 1998 the Yangtze River basin suffered a once-in-a-century flood, and Zhu Rongji, as premier, directed flood-fighting efforts on the embankments; it was also after that that the state began to implement ecological governance policies such as returning farmland to forest and returning farmland to grassland.

On housing security, according to Zhao Yanjing in an interview in 2022, Zhu Rongji once judged that 50% of ordinary people would live in affordable housing.

According to Ronnie C. Chan’s recollection in a speech in 2015, when China applied to join the General Agreement on Tariffs and Trade 20 years earlier, the United States and Europe said that China was not yet qualified, and Zhu Rongji did a great deal of work on this at the time; China eventually joined the World Trade Organization in 2001.