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Wen Jiabao Talks about Eight Crises Facing the Government

Chinese Premier discusses concerns on government credibility at State Council meetings.

During an internal meeting of the Chinese State Council in late May, Wen Jiabao, the Premier, listed eight crises that the new government is facing. These eight crises are very different from the ones Jiang Zemin or Zhu Rongji (the former leaders) had listed.

The crisis of people losing trust in government

1. People have low evaluations of the image and work of the Government. Peoplelosing trust and support in government, to a certain extent, is the mostcritical crisis this government is facing. It directly affects the success ofthe [government’s] working principles and policies. Gaining people’s trust and support for the government cannot be done simply by empty words or propagandaslogans.

2. The government is far from meeting the standard of governing and administeringthe country by law. This is the foundation of political reform and systemreform.

The crises of legitimacy of the government

3. Resolve and eliminate the accumulated problems by law and regulation. Try notto leave them to the next government. This refers to the governmentorganization being too large. All previous streamlining movements weresuperficial, such as ministries and commissions being reduced but sectors beingincreased. As of this past March, not including police and traffic police, thenumber of government clerks reached 42.3 million, and retired clerks now total11.2 million. The clerks’ salaries, pensions and benefits, etc. comprise 45 ~60% of the local governments’ annual fiscal expenses.

4. The situation of corruption and bureaucracy.  It is normal to senseresentment and anger from the people when the government organizations andleaders have bad reputations. This is also an inevitable reflection fromsociety that the government lacks an effective monitoring and supervisingsystem to deal with corruption and bureaucracy within the government. This hasalready generated a crisis of legitimacy of the government.  

The Crisis of the Financial System and Social Security

5. The situation of the "messy, confused, fake and mixed" predicament inthe financial system is critical.  It has now been estimated that thereare 6 trillion yuan (~ $700 billion) of bad loans, 1.25 trillion yuan (~ $150billion) in enterprise triangular debt, and an annual currency printinginflation of 20%. So far, there is no set of good methods to resolve theseproblems. These are potential dangers that could easily ignite a financial andeconomic crisis.
6. The actual unemployment rate in urban areas is 12% (the official claim of theregistered unemployment rate is between 4.3% and 4.5%).  The socialsecurity system is ineffective. It is also insufficient in reducing the farmers’burden and raising farmers’ living standard.  Wen Jiabao, Song Ping, QiaoShi, Zhu Rongji, etc. all admitted at various times that a large number of bluecollar workers and farmers are still at the bottom level of the economy insociety. No matter what excuses can be found, this phenomenon is not areflection of the advantages of the socialist system.

WenJiabao said in the meeting that workers and farmers are the most reasonable andtolerant group. If the officials did not receive salaries for three months andtheir benefits were cancelled, would they not riot?

The crisis of the extreme income gap and public health care

7. The gap between the rich and the poor is extreme. Hu Jintao, Zeng Qinghong andZhu Rongji all admitted that a new capitalist class has already formed insociety. In fact, the Party and administrative leaders and their children arethe bureaucratic capitalist class and the most powerful force among thecapitalists. They control the state lifeline of the machinery of politics,economy, and military.

8.  The crises ofthe medical and education systems. The reform of the medical and educationsystems is not based on the country’s actual situation. It has gone from oneextreme to another. There are 50 million residents in urban areas who cannot goto hospitals because of financial difficulties. Five hundred million farmershave medical problems but lack medical treatment because of financialdifficulties. The nine-year free public education policy and laws havecollapsed. This has caused deep and long-lasting ramifications in society.