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The People's Republic, Recent Developments

Hu Jintao, currency crisis, Communist governments, Politburo, economic liberalization

With the fall of the Communist governments in Eastern Europe in 1989 and the breakup of the USSR in 1991, China became the only remaining major world power with a Communist government. The Chinese government worked to ensure that its own system did not follow a similar demise as the USSR. The state continued to pursue economic policies that reduced poverty, such as allowing workers to move to search for jobs. Meanwhile, the government also maintained tight control over political expression and suppressed any sign of separatism by ethnic Tibetans in Tibet and Muslims in Xinjiang Uygur Autonomous Region.

Deng remained the dominant figure in China throughout the 1980s and early 1990s, retaining behind-the-scenes influence even as he steadily surrendered his public titles. With Deng’s help, Jiang gradually consolidated his power and influence within the party and government. In 1993 Jiang became president, while maintaining his role as party general secretary. Unlike the period following Mao’s death, China’s political climate remained calm after Deng died in February 1997, and Jiang continued the economic liberalization begun by Deng.

Deng and Jiang’s reforms in the 1990s were particularly successful at stimulating economic growth, but they also created problems for the Communist leadership. China’s foreign debt began to increase rapidly, and growing consumer demand led to rising inflation. Uncontrolled industrial and agricultural growth caused environmental degradation in much of China. Moreover, there was pervasive corruption among party and government officials who profited from their power to grant permits and licenses and from their control over basic supplies needed by private businesses. The government has attempted to combat the corruption, imprisoning a number of prominent party officials convicted of using their positions for personal gain.

During the late 1990s China’s international standing improved. In 1997 Hong Kong was transferred from British to Chinese control, and Macau followed in 1999, reverting from Portugal to China. The Chinese economy fared relatively well in a currency crisis that swept the region. In 1998 U.S. president Bill Clinton visited China and debated political issues on live television. In November 1999 China and the United States reached a trade agreement in which China agreed to significantly reduce obstacles to imported goods and foreign investments in exchange for U.S. support of China’s application for membership in the World Trade Organization (WTO). China also secured similar bilateral agreements with other countries to gain support for its entry in the trade organization. China formally became a member of the WTO in December 2001.

Jiang retired as general secretary of the CCP in November 2002, launching a generational shift in the leadership of China. All but one of the members of the Standing Committee of the Politburo, the CCP’s inner policymaking circle, retired along with Jiang. The remaining incumbent member, Hu Jintao, was chosen to succeed Jiang as the party’s general secretary. Hu was also slated to succeed Jiang as president of China in March 2003. However, Jiang retained his post as head of the Central Military Commission, which controls the military, and was expected to exert considerable behind-the-scenes influence in the governance of China.

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