How far will the austerity program set back China’s modernization?
It’s hard to say. The problem is that the struggle is still going on between those who support austerity and those who support a continued opening of the market and reform. Although the central government wants to force the austerity measures on the rest of the country, there’s a great deal of resistance from the provinces. In fact, the provinces have already succeeded by a large degree in overcoming Beijing’s austerity plan. One indication of how the struggle is going between the two camps is that the governor of the state planning commission, Yao Yilin, has left his post and been replaced by Zhu Jiahua. Although Zhu Jiahua is a supporter of the austerity policy, he is not as conservative as Yao Yilin. Q: On one hand the Beijing authorities seem to be reverting to orthodox Communism, as political repression increases along with state planning of the economy. On the other hand, the authorities call for a continuation of economic reform and increased economic ties with the outside world
