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CNN Sunday Morning

Interview With Betty Liu

Aired November 10, 2002 - 09:14   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


RENAY SAN MIGUEL, CNN ANCHOR: In the past two decades, Chinese have been allowed to engage in free enterprise, despite the communist political system. Party leaders are meeting in Beijing right now, and one main issue is how to maintain communist control while allowing economic freedom. Betty Liu of "The Financial Times" joins us with some insight into that and possible leadership changes going on with this Community Party Congress there. Thanks for being with us.
BETTY LIU, FINANCIAL TIMES: Thank you.

SAN MIGUEL: We've been talking a lot about this supposedly being the swan song of Jiang Zemin. There is a lot of talk about his legacy, getting his country into the World Trade Center. Now they are hosting the 2008 Olympics. But he's not really going away, and how significant is that that maybe he is no longer president but he is still behind the scenes?

LIU: Absolutely. You are absolutely right. There is talk that he is going to stay as chairman of the Central Military Commission, and of course any political leader who is in charge of the military wields a great amount of influence, and he's also going to exert influence by proxy. What I mean by that is he's going to have a lot of associates within the Communist Party, and within the political leadership that are going to be able to carry out his philosophy and his policy that he has put in place for years.

SAN MIGUEL: I mean, if we talk about Deng Xiaoping, kind of, you know, ending the isolation period of China, Jiang Zemin basically opening it up even more, modernizing it.

LIU: Absolutely. If you want to sum up the three generations of Chinese leadership, you say, of course, Mao Zedong created China the way as we know it today. You have Deng Xiaoping who opened up and brought it out of isolationism, and Jiang Zemin brought it into modernism.

SAN MIGUEL: Forgive me for being flip, but who is Hu Jintao? I mean, I am not sure, you know, the Chinese know exactly who this guy is. But he is supposedly in line to be voted president in this Congress.

LIU: Absolutely. Hu has been someone who has been behind the scenes, but that's really characteristic of the fourth generation of leaders. You have to remember that these are leaders who had been behind the scenes and have really risen up through the ranks by avoiding risk rather than really taking risk. SAN MIGUEL: I mean, is it safe to say that he would be a puppet of Jiang Zemin, I mean, considering of the power that is going to be wielded behind the throne here?

LIU: I wouldn't say that. And actually there is talk he wasn't really Jiang's first choice. And in fact, Hu was actually picked by Deng when he was alive at that time, so it's more that Jiang knew that this succession plan was in place. I really don't think that Hu will do everything that Jiang wanted to do. I think that he will try to charge his own path.

SAN MIGUEL: OK. There is still lots of manipulation going on here, and you know, the setting up of allies, you know, within the conservatives, I guess, what you might call the traditionalists and the reform-minded members of the Congress.

LIU: Absolutely. I mean, China is still the political leadership is still very fractured. You have the hard-liners who are still -- were evident, of course, back in Tiananmen Square during 1989, and you have, of course, the reformists, and you know, hopefully, increasingly, it will be the reformists that are taking control of the party leadership.

SAN MIGUEL: And I think a lot of American businesses are hoping that will be the case, because, I was reading somewhere where now, you know, this is the untapped market of the world.

LIU: Oh, yes.

SAN MIGUEL: And the idea that now, I believe, in terms of computers, we're looking at the second biggest potential market for computers in the world, next to the U.S. Dell has a plant there. A lot of companies, tech companies would love to sell more computers over there to offset the fact they are not selling that many here. So what should business leaders in this country take away from what is being talked about in China?

LIU: And of course they're always talking about 1.3 billion people in China, that's a huge market, $115 billion in trade between the two countries. I think the U.S. companies and U.S. leadership should take away from the fact that China is on its way to economic reform. Political reform takes a little bit longer.

SAN MIGUEL: OK. So, I mean, we can expect more even within the country entrepreneurship, in the fact that those Chinese being able to chart a new course for themselves?

LIU: Absolutely. And interesting part is in the people's Congress this year, for the first time, they are inviting members from the private sector, private entrepreneurs to join and actually get a glimpse of the Communist Party leadership for the first time. So that's really a great sense of how the Communist Party's really seeing that the private sector needs to flourish for the economy to flourish.

SAN MIGUEL: Because those private entrepreneurs, home grown entrepreneurs, if you will, would like to buy computers from Dell or IBM or anybody on these shores who wants to do that.

Now, China has made its thoughts known here concerning the U.N. resolution. They have not fought the U.S. side of the resolution with Iraq. North Korea is waiting out there and there is always the Taiwan situation. Are we expecting any kind of direction from this Congress regarding some of these policy issues, foreign policy issues?

LIU: I wouldn't say direction but I would say just an affirmation of the fact that the Chinese leadership knows they need to have -- keep good relations with the U.S., and therefore you've seen the Chinese in the end back the U.N. resolution. They didn't abstain from it, as they did during the Gulf War. I think that, you know, essentially the Chinese leadership know that they need to have good relations with the U.S., they know that they are facing two huge military instability, you know, regions that are militarily unstable, which is of course the Taiwanese strait and, of course, North Korea.

SAN MIGUEL: Jiang Zemin was actually at the Crawford ranch with President Bush when the revelations came out that North Korea did indeed have a nuclear program going.

LIU: Yes.

SAN MIGUEL: ... and came out and said, I believe, with the president that everybody wants a nuclear-free North Korea. I mean, how significant was that, with all of things that were going on with North Korea, that kind of came in under the radar in terms of our news media, but how significant was that?

LIU: That was very significant, because it showed that the Chinese were allied with the U.S. on the North Korean front. You know, China and North Korea have been friends for many, many years, but it shows that China knew that it needs to keep peace in that area. And it also has an interest not to see the U.S. military really increase in that region. The Chinese resent that. They don't want to see that. So I think it was very significant of Jiang Zemin, and it was also significant on Bush part for reiterating the one China policy, which was very important to Jiang at that time.

SAN MIGUEL: Yeah, he needed to hear that. Thirty seconds left, very quickly. Student reform movement, the Tiananmen Square memory still linger for many. I mean, is that something that the membership still has to deal with here?

LIU: Still has to deal with it, sure. There are still very many hard-liners in the Communist Party, and of course the old leadership.

SAN MIGUEL: Betty Liu, from the Atlanta bureau of "The Financial Times." Thanks for your insight. We do appreciate you coming in this Sunday morning.

LIU: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired November 10, 2002 - 09:14   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RENAY SAN MIGUEL, CNN ANCHOR: In the past two decades, Chinese have been allowed to engage in free enterprise, despite the communist political system. Party leaders are meeting in Beijing right now, and one main issue is how to maintain communist control while allowing economic freedom. Betty Liu of "The Financial Times" joins us with some insight into that and possible leadership changes going on with this Community Party Congress there. Thanks for being with us.
BETTY LIU, FINANCIAL TIMES: Thank you.

SAN MIGUEL: We've been talking a lot about this supposedly being the swan song of Jiang Zemin. There is a lot of talk about his legacy, getting his country into the World Trade Center. Now they are hosting the 2008 Olympics. But he's not really going away, and how significant is that that maybe he is no longer president but he is still behind the scenes?

LIU: Absolutely. You are absolutely right. There is talk that he is going to stay as chairman of the Central Military Commission, and of course any political leader who is in charge of the military wields a great amount of influence, and he's also going to exert influence by proxy. What I mean by that is he's going to have a lot of associates within the Communist Party, and within the political leadership that are going to be able to carry out his philosophy and his policy that he has put in place for years.

SAN MIGUEL: I mean, if we talk about Deng Xiaoping, kind of, you know, ending the isolation period of China, Jiang Zemin basically opening it up even more, modernizing it.

LIU: Absolutely. If you want to sum up the three generations of Chinese leadership, you say, of course, Mao Zedong created China the way as we know it today. You have Deng Xiaoping who opened up and brought it out of isolationism, and Jiang Zemin brought it into modernism.

SAN MIGUEL: Forgive me for being flip, but who is Hu Jintao? I mean, I am not sure, you know, the Chinese know exactly who this guy is. But he is supposedly in line to be voted president in this Congress.

LIU: Absolutely. Hu has been someone who has been behind the scenes, but that's really characteristic of the fourth generation of leaders. You have to remember that these are leaders who had been behind the scenes and have really risen up through the ranks by avoiding risk rather than really taking risk. SAN MIGUEL: I mean, is it safe to say that he would be a puppet of Jiang Zemin, I mean, considering of the power that is going to be wielded behind the throne here?

LIU: I wouldn't say that. And actually there is talk he wasn't really Jiang's first choice. And in fact, Hu was actually picked by Deng when he was alive at that time, so it's more that Jiang knew that this succession plan was in place. I really don't think that Hu will do everything that Jiang wanted to do. I think that he will try to charge his own path.

SAN MIGUEL: OK. There is still lots of manipulation going on here, and you know, the setting up of allies, you know, within the conservatives, I guess, what you might call the traditionalists and the reform-minded members of the Congress.

LIU: Absolutely. I mean, China is still the political leadership is still very fractured. You have the hard-liners who are still -- were evident, of course, back in Tiananmen Square during 1989, and you have, of course, the reformists, and you know, hopefully, increasingly, it will be the reformists that are taking control of the party leadership.

SAN MIGUEL: And I think a lot of American businesses are hoping that will be the case, because, I was reading somewhere where now, you know, this is the untapped market of the world.

LIU: Oh, yes.

SAN MIGUEL: And the idea that now, I believe, in terms of computers, we're looking at the second biggest potential market for computers in the world, next to the U.S. Dell has a plant there. A lot of companies, tech companies would love to sell more computers over there to offset the fact they are not selling that many here. So what should business leaders in this country take away from what is being talked about in China?

LIU: And of course they're always talking about 1.3 billion people in China, that's a huge market, $115 billion in trade between the two countries. I think the U.S. companies and U.S. leadership should take away from the fact that China is on its way to economic reform. Political reform takes a little bit longer.

SAN MIGUEL: OK. So, I mean, we can expect more even within the country entrepreneurship, in the fact that those Chinese being able to chart a new course for themselves?

LIU: Absolutely. And interesting part is in the people's Congress this year, for the first time, they are inviting members from the private sector, private entrepreneurs to join and actually get a glimpse of the Communist Party leadership for the first time. So that's really a great sense of how the Communist Party's really seeing that the private sector needs to flourish for the economy to flourish.

SAN MIGUEL: Because those private entrepreneurs, home grown entrepreneurs, if you will, would like to buy computers from Dell or IBM or anybody on these shores who wants to do that.

Now, China has made its thoughts known here concerning the U.N. resolution. They have not fought the U.S. side of the resolution with Iraq. North Korea is waiting out there and there is always the Taiwan situation. Are we expecting any kind of direction from this Congress regarding some of these policy issues, foreign policy issues?

LIU: I wouldn't say direction but I would say just an affirmation of the fact that the Chinese leadership knows they need to have -- keep good relations with the U.S., and therefore you've seen the Chinese in the end back the U.N. resolution. They didn't abstain from it, as they did during the Gulf War. I think that, you know, essentially the Chinese leadership know that they need to have good relations with the U.S., they know that they are facing two huge military instability, you know, regions that are militarily unstable, which is of course the Taiwanese strait and, of course, North Korea.

SAN MIGUEL: Jiang Zemin was actually at the Crawford ranch with President Bush when the revelations came out that North Korea did indeed have a nuclear program going.

LIU: Yes.

SAN MIGUEL: ... and came out and said, I believe, with the president that everybody wants a nuclear-free North Korea. I mean, how significant was that, with all of things that were going on with North Korea, that kind of came in under the radar in terms of our news media, but how significant was that?

LIU: That was very significant, because it showed that the Chinese were allied with the U.S. on the North Korean front. You know, China and North Korea have been friends for many, many years, but it shows that China knew that it needs to keep peace in that area. And it also has an interest not to see the U.S. military really increase in that region. The Chinese resent that. They don't want to see that. So I think it was very significant of Jiang Zemin, and it was also significant on Bush part for reiterating the one China policy, which was very important to Jiang at that time.

SAN MIGUEL: Yeah, he needed to hear that. Thirty seconds left, very quickly. Student reform movement, the Tiananmen Square memory still linger for many. I mean, is that something that the membership still has to deal with here?

LIU: Still has to deal with it, sure. There are still very many hard-liners in the Communist Party, and of course the old leadership.

SAN MIGUEL: Betty Liu, from the Atlanta bureau of "The Financial Times." Thanks for your insight. We do appreciate you coming in this Sunday morning.

LIU: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com