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Western Press Review: Clinton Tour Shares Spotlight With China

  • Don Hill

Prague, 1 June 2000 (RFE/RL) -- Western commentary continues to scrutinize U.S.-Russian relations and U.S. President Bill Clinton's European tour. But scrutiny turns also to the other side of the world and China.

The financial newspapers Wall Street Journal Europe and Financial Times marvel at China's interest in, of all things, the world's stock markets.


James Kynge writes today in a Financial Times commentary that China's leaders have ended almost three years of outward indifference by appointing a U.S.-educated financial expert to high office. Here are excerpts:

"Last week, the country's top economic officials, led by Zhu Rongji, the prime minister, gathered for a class on basic stock market knowledge. Their teacher was Gao Xiqing, recently promoted to the number two position in Beijing's securities watchdog. The fact that such an encounter took place indicates the growing influence of a younger generation of U.S.-trained technocrats in Beijing's financial policy circles."

The FT commentary continues: "The fact that the central bank's newspaper splashed an account of Mr. Gao's lesson on its front page is one of several recent signs that China is about to embark on far-reaching financial market reform. A consensus is already emerging about which parts of a modern financial architecture China should try to build first, and which it should leave for later."

"That consensus is remarkable," Kynge writes," because it follows nearly three years of studied inactivity -- and in some areas, retreat -- as the Asian financial crisis buffeted the region and made arguments for liberalization difficult to sell within China's Communist party hierarchy."

"The eventual goal of financial reform in China," Kynge concludes, "is the liberalization of the capital account. This is fraught with obstacles. Widespread corruption, poor transparency, the potential for capital flight, a dearth of impartial accountants and qualified fund managers are only some of the problems that China faces. Any big scandal or financial panic could derail the whole enterprise. If such a rupture were to occur, it may again become the turn of the older generation of Communist leaders to teach the younger technocrats a lesson."


The Wall Street Journal says in an editorial that China is handicapped by lack of stock market knowledge in both government and business. In the editorial's words: "The big question right now in Beijing: What are stock markets for? A whole host of private companies, from Web portals to grain traders, are getting to the point where they could benefit from an infusion of equity capital to finance their expansion. But as of now only about a dozen of the 1,000 listings in Shanghai and Shenzhen are majority-owned and managed by private citizens."

"The problem," the Wall Street Journal continues, "is those 900-plus other companies, the state-owned enterprises. Remember that China's stock markets were originally conceived back in the 1980s as an experiment. The big steel mills and chemical plants would turn to them to sell off minority stakes and use the new capital to rejuvenate themselves. The ideologues within the Communist Party were reassured that the vanguard of the proletariat would still maintain ultimate control over them."

This plan hasn't worked out, the editorial says.

As the Wall Street Journal puts it: "As is often the case in China, the outcome will depend on internal Party politics. Certainly the country could plod along as it has been, allowing a limited number of high-flying firms to list in Hong Kong and on the Nasdaq. But it has the opportunity to create much bigger opportunities for entrepreneurs and domestic investors. Second boards in Shanghai and Shenzhen and listings of private companies on the main markets would be an important step toward a true market economy."

Writers in The Washington Post and The New York Times offer President Clinton some advice on what to do during his European tour.


In an editorial, The Washington Post says: "Yes, Meddle in Russian Affairs."The editorial says some critics of U.S. policy toward Russia believe that Clinton has erred by focusing too much on domestic Russian concerns and on his personal relationship with Russian leaders. But it says those critics are wrong. In the editorial's words: "Clinton's tactics may have misfired, but his mistake did not lie in caring too much about Russia's internal development. Whether democracy progresses in Russia greatly affects U.S. national security."

"Nothing Mr. Clinton does this weekend," the editorial continues, "nor even his longer-term policies, will be decisive in that regard. Russians will decide Russia's future. But the United States has some influence. Mr. Putin wants acceptance in the West. He seems to understand the importance of economic investment and integration. And Mr. Clinton reaches Moscow while Mr. Putin is still defining himself and his administration."

The Washington Post concludes with some advice on talking points: "So Mr. Clinton should stress the importance of religious and press freedom, toward which Mr. Putin has adopted a cavalier attitude. With Mr. Putin talking about firing elected governors and subordinating them to appointed viceroys with secret-police and military connections, Mr. Clinton should reaffirm the value of electoral democracy. He should welcome economic reforms such as Mr. Putin's proposed tax simplification but stress that no reforms will succeed if unaccompanied by an independent judiciary, shareholder rights, contract enforcement and other signs of respect for law. He should take care not to bless--as he has seemed to in the past -- Russia's brutal methods in Chechnya."

In a companion commentary, The Washington Post presents the words of Russian press magnate Igor Malashenko, who describes himself as a recent victim of what he calls Putin's cavalier attitude toward press freedom. The newspaper labels Malashenko's essay, "Speak Out for a Free Press, Mr. Clinton."

Malashenko says this: "Today's Russia cannot and should not become an isolated nation. There is no iron curtain between Russia and the West anymore. Continuing dialogue between Russian and Western leaders should be used to remind the Kremlin that adherence to democratic principles cannot be considered the domestic affair of any nation but is rather a subject of universal concern."

"It's possible," he muses, "that Russia's new leaders do not fully appreciate the fact that for the outside world, the treatment of the press is one of the most important indicators not only of the direction in which Russia is heading domestically but also of its future policies toward its neighbors and the West. President Clinton's visit could help provide them with a fuller appreciation of this truth. Just about every Russian wants a strong, united Russia. Many want a free, democratic Russia. The new leaders of Russia should understand that both of these goals are furthered by an independent press."


Writing in The New York Times, international affairs analyst Thomas Graham says that on the contentious issue of missile defense systems, Putin's attitude promises more for the United States that does Clinton's. Graham puts it this way: "Barring a sudden change of heart, President Vladimir Putin of Russia will do the United States a great service when he sits down with President Clinton this weekend and refuses to modify the Antiballistic Missile Treaty to allow the United States to deploy a limited missile defense."

"Why does Russian opposition work in America's interest?" Graham asks. He answers: "We are still in the early stages of a serious debate over a national defense against missile attacks and, more broadly, over our nuclear strategy in the new century. Without a consensus on these important points, it is simply wrong to cut a deal with Moscow, either now or in the remaining months of the Clinton presidency. The Clinton administration, of course, does not see it that way. Mr. Clinton does not want to be the first president in decades to fail to sign a significant arms control agreement with the Russians."

The commentator's conclusion: "Yes, we should be talking all along to the Russians to assess their views and reactions. But until we have done our work at home and with our allies, we should be wary of signing any treaty with Moscow. Logically, only the next administration can conclude this debate. And that is why, if events unfold as expected, Americans should be prepared to thank Vladimir Putin for looking out for their interests by saying no to President Clinton on missile defense."


From Norway yesterday, Aftenposten issued in an editorial a reminder about Russia in Chechnya. The editorial says Putin has, in its words, "appeased the EU somewhat by promising that all assaults on reporters in Chechnya will cease and that any such occurrences will be investigated. However," Aftenposten cautions, "it is now up to the EU to make sure that he lives up to his promises. For if his statement that Russia is a European nation, both geographically and culturally, is to be put to the test, then Russia must begin to live by the principles enunciated by the Council of Europe. There can be no two different standards: one for Russia and another for the other European countries."

(Anthony Georgieff in Copenhagen contributed to this Western Press Review)