Zhu Rongji, Former Premier Who Pushed China to a Market Economy, Dies at 97

Zhu Rongji, the former Chinese premier who played a pivotal role in guiding his country toward a market-based economy in the 1990s and subsequently into the World Trade Organization, died on Wednesday in Beijing. He was 97.

His death was announced by Xinhua, China’s official news agency, which did not cite a cause, noting only that he died after medical treatment failed to save him.

Mr. Zhu, who worked under Jiang Zemin, the Communist Party leader at the time, contributed more to liberalizing the Chinese economy and making it more internationally competitive than any other recent leader except Deng Xiaoping. Mr. Zhu’s initiatives propelled rapid growth in China that lasted, with a little slowing along the way, until the housing market began to crash in 2021.

But his measures also set the stage for China’s recent problems with excessive debt and its huge trade surpluses, which have led to trade wars with the United States during President Trump’s terms in office.

A young Communist star in the 1950s, Mr. Zhu was expelled from the party in one of Mao Zedong’s ideological purification campaigns. He spent 20 years in obscurity, including five years as a farm laborer.

Politically rehabilitated after Mao’s death in 1976, he soared to the top levels of government. It was Mr. Deng, China’s paramount leader from the late 1970s until his death in 1997, who plucked Mr. Zhu in 1991 from his position as mayor of Shanghai and brought him to Beijing to oversee the country’s economic modernization.

China’s economy had grown rapidly through the 1980s as officials greatly reduced central planning and curbed the chaos of Mao’s final years. But market reforms faltered after a deadly military crackdown crushed the Tiananmen Square protests in 1989.

Mr. Zhu reinvigorated his country’s embrace of market forces, starting as a vice premier in 1991. Promoted to premier seven years later, he oversaw the privatization of thousands of state-owned enterprises and then led China into the World Trade Organization in 2001.

Xu Bingjin, a top aide to Mr. Zhu during the negotiations to join the W.T.O., said in an interview in 2018 that the talks had been like haggling in a vegetable market.

“We would bargain about the price and eventually reach a compromise — sometimes we fought intensely and even banged the table,” he said.

The eventual deal crafted by Mr. Zhu and his aides was unpopular with many Chinese people, particularly in inland provinces that weren’t as prepared for international competition. Mr. Zhu was widely criticized for agreeing to reduce import tariffs on cars and many other goods to no more than 25 percent from 100 percent or more.

But entry into the W.T.O. meant that Chinese goods also had guaranteed access to Western markets with significantly lower tariffs. Exports soared, and by 2010 China had p***ed the United States to become the world’s largest manufacturer, according to the United Nations Industrial Development Organization.

At the same time, imports did not grow as fast as expected. Mr. Zhu retired soon after China joined the trade body, and the country’s embrace of market forces slowed.

China began erecting new obstacles to bringing in foreign goods. These included extensive subsidies for Chinese manufacturers and numerous requirements that government agencies and state-owned enterprises buy Chinese-made goods.

Under Mr. Zhu, China promised when it joined the W.T.O. that it would quickly open up government procurement to international competition. But China still has not done so. Beijing leaders have faced objections from inland provinces that oppose letting Western companies compete for their sprawling public works projects. Central government officials have submitted several proposals that other countries have quickly rejected as insufficient.

Robert E. Lighthizer, a longtime Washington trade lawyer who was the trade representative for the United States during Mr. Trump’s first term, said Mr. Zhu outsmarted Western negotiators in securing China’s place in the W.T.O.

“Zhu and China clearly got the better deal,” he said in a 2022 email.

As the trade representative, Mr. Lighthizer waged a trade war with Beijing. He imposed tariffs on many Chinese goods in an effort to claw back access to the American market that Mr. Zhu had negotiated. President Joseph R. Biden Jr. left those tariffs in place, and Mr. Trump raised them after he returned to office in 2025.

Driving Debt

As vice premier and then premier, Mr. Zhu also oversaw many domestic policies aimed at making China more efficient and competitive. The two most important policies involved the privatization of thousands of inefficient state-owned enterprises and a far-reaching tax overhaul.

Tens of millions of workers lost their jobs during the privatization drive, with many forced into retirement in their 40s. Mr. Zhu softened the blow by enacting an overhaul of the housing market. A vast number of state-owned apartments were transferred to current and retired employees at a nominal cost. State-owned banks issued mortgages at low interest rates for new homes.

Apartment prices soared as much as twentyfold in many Chinese cities from the 1990s until around 2021. That gave many older workers a sizable nest egg, as well as protection from homelessness.

Under Mr. Zhu’s tax overhaul in 1994, the central government seized a much larger share of taxes collected by local governments. The money bankrolled costly initiatives like broad industrial subsidies and a considerable military buildup.

“If we don’t suitably centralize revenues and strengthen the central government’s finances, we won’t be able to get by,” Mr. Zhu said during a 1993 visit to Guangzhou. “And in the end, the entire country will suffer and be unable to carry on.”

Beijing let local governments borrow more money from banks and financial markets in exchange for transferring a larger share of their tax revenues to the national government. Beijing also lifted restrictions that previously limited how local governments could spend money. And Beijing granted greater discretion to local governments to sell long-term leases on state-owned land to developers.

Local governments proceeded to borrow heavily and sell land leases to raise money for new roads, rail lines and ports.

Mr. Zhu’s “grand bargain” with local governments cleared the way for towns, cities and provinces to gorge on debt and become highly dependent on ever-rising revenues from selling land leases. When China’s real estate market fell into a deep slump in 2021, many developers defaulted on loans and stopped buying land leases. This left many local governments with little money to cover their debts.

A Rising Star

Mr. Zhu was born on Oct. 23, 1928, in Changsha, the capital of Hunan Province in southern China. He was orphaned as a small child and raised by two of his father’s older brothers, Zhu Kuanjun and Zhu Xuefang. He went on to excel in school and, in 1947, p***ed the rigorous entrance exam to the elite Tsinghua University, where he studied electrical engineering. He joined the Communist Party in 1949, the year it won China’s civil war.

Like many economic reformers of the 1990s, Mr. Zhu made a remarkable political comeback from persecution before climbing to the top of the Chinese government. He was working at the State Planning Commission, tracking machinery production, when Mao began his Anti-Rightist Campaign in June 1957, striking back at what he saw as dangerous opposition. The campaign led to the political persecution of 550,000 officials, teachers and other citizens over the next two years.

Mr. Zhu was among them. In the early days of Mao’s campaign, Mr. Zhu had given a three-minute talk at the planning commission that followed the prevailing line in Beijing at the time. But the talk was deemed politically unacceptable after the campaign intensified in October 1957.

“Before October, everyone thought that my opinion was good — after October, they said that your opinion should be reconsidered,” Mr. Zhu said in a speech in 1988.

According to a biography of Mr. Zhu published in 2008 by a state company, he was also deemed an “opportunist in revolution” because he had an unacceptable cl*** background: His maternal grandfather, Yu Zhaokang, had been an imperial official before the fall of the Qing dynasty in 1911, pioneering railroad construction in China.

Mr. Zhu was expelled from the Communist Party in April 1958 and demoted several rungs at the commission. But he was allowed to remain there to teach math, physics and chemistry to his colleagues.

His early difficulties set him up for further trouble a decade later during Mao’s Cultural Revolution, when he was sent to labor on a farm for five years. “I have done everything: planted wheat, rice and cotton; herded cattle and sheep; raised pigs; and worked as a cook,” he recalled in his 1988 speech.

When the revolution wound down with the illness and death of Mao in 1976, Mr. Zhu spent two years training power transmission workers. As China’s politics began to thaw, he regained his government rank as a deputy director general — the same level he had held as a rising star 20 years earlier.

Mr. Zhu’s Communist Party membership was retroactively restored in late 1978, with full seniority dating from when he joined the party in 1949. He was named research director for industrial economics at the Chinese Academy of Social Sciences. According to the 2008 biography, Mr. Zhu watched as academy officials burned his letter of expulsion from the party and the do***ents that had been used as evidence to condemn him as a rightist.

Mr. Zhu quickly became one of China’s leading economic thinkers on industrial and rural issues. Within five years, he was vice minister of the State Economic Commission.

A Teacher and a Mentor

As his career soared, he began a project that would have long-lasting influence: He founded the School of Economics and Management at his alma mater, Tsinghua. He began training a large cohort of economists and finance experts who went on to fill many top posts for decades. (Xi Jinping, China’s current top leader, has limited the influence of these technocrats, however, by creating Communist Party commissions that took considerable decision-making authority away from government agencies stocked with Mr. Zhu’s protégés.)

Mr. Zhu was a popular lecturer at the university on trade, inflation, economic output and other issues, recalled one of his students, Li Shan, now a prominent Chinese financier who has been active in Hong Kong politics.

Mr. Zhu persuaded Mr. Li to leave a Wall Street career at Goldman Sachs to work at the state-owned China Development Bank in Beijing.

“He is very easygoing. He’d have a big smile,” Mr. Li said in an interview for this obituary in 2022. “Normally, people think he is very serious, very tough. But at school, he was a completely different person.”

After working his way up the economic policy ranks in Beijing, Mr. Zhu became the mayor of Shanghai in 1988. He came under Mr. Deng’s wing soon after.

Starting in late January 1990, the elderly Mr. Deng began spending the first days of each Chinese New Year not in frozen Beijing but in milder Shanghai. There, Mr. Deng had long discussions about Mr. Zhu’s plans to redevelop the Pudong area across the Huangpu River from downtown Shanghai.

The area was occupied by aging, state-owned warehouses and farms. Mr. Zhu envisioned turning it into the modern financial center with skyscrapers that it is today. Mr. Deng not only supported those plans but, after a second visit to Shanghai in early 1991, brought Mr. Zhu back to Beijing as a vice premier with special responsibility for trade and industrial production.

A year later, Mr. Deng elevated Mr. Zhu onto the Politburo Standing Committee — the innermost circle of power in the Chinese Communist Party. Six years after that, Mr. Zhu was premier, a post he held until 2003.

While Mr. Zhu was premier, his son, Levin Zhu Yunlai, was the most visible investment banker at the China International Capital Corporation. C.I.C.C., as it is known, worked with Wall Street banks to list the shares of big Chinese state-owned enterprises on Western stock exchanges.

In addition to his son, Mr. Zhu’s family included Lao An, his wife of seven decades, as well as a daughter, Zhu Yanlai. Hong Kong news media reported in 2019 that Mr. Zhu also had at least one granddaughter, the daughter of Zhu Yanlai.

Li You contributed research.