Problem-Solver Retires, Leaving Hole in Beijing's Crisis Management
For the past decade, when Chinese leaders had a mission of national
importance, they gave it to one woman.
Wu Yi oversaw negotiations in the 1990s on China's entry to the World
Trade Organization, winning a reputation as tough but personable. She
directed the fight against the SARS pneumonia outbreak in 2003 and has
represented Beijing in a dialogue to ease trade frictions with Washington.
In August, the government put her in charge of whipping product-safety
enforcement into shape and restoring China's battered international image.
But now Wu, who turns 69 next month, is
retiring, leaving Beijing to find a new top problem-solver for challenges
ranging from improving drug safety to stabilizing unruly financial markets.
On Sunday, Wu, a vice premier and the
only woman in the senior leadership, left the Communist Party's Central
Committee along with many other retiring leaders as the party installed a
new lineup to guide the country for the next five years. With that, Wu will
have to relinquish her vice premiership, at the latest when a new government
is announced in March.
U.S. officials say Wu is due to take part
in one more round of economic talks with U.S. Treasury Secretary Henry
Paulson in December. But they say after that, China has given no sign who
will take over her duties.
A petrochemical engineer by training, Wu
rose through the oil ministry and then government hierarchies to become
China's highest-ranking female leader. Forbes magazine this year listed her
as the world's second-most powerful woman, behind German Chancellor Angela
Merkel and ahead of U.S. Secretary of State Condoleezza Rice.
Her departure is unlikely to affect
policy in a system where key decisions are made by more senior party
Still, she is one of several leading
officials with economic portfolios stepping down. The party leadership has
few candidates to turn to with the charm, intelligence and negotiating
skills that won Wu wide respect among world political and business leaders.
"One of the great defenders, one of
the great openers-up of this economy is Vice Premier Wu Yi," Joerg
Wuttke, president of the European Union Chamber of Commerce, said in
September. "She personally is one of the great advocators of free
"She will be difficult to
replace," said William Hess, chief China analyst for the consulting
firm Global Insight.
Wu, who never married and has no
children, shows an unusual degree of personal warmth in public amid China's
stiffly formal official system. After talks in December in Beijing, she and
Paulson held hands as they met reporters.
Domestically, Wu has tackled some of the
government's most critical problems, stepping in to restore public faith
after Chinese leaders initially sluggish response to the outbreak of severe
acute respiratory syndrome, or SARS. In 2006, she supervised an
investigation into China's drug-licensing system after a former regulator
was charged with taking bribes to approve untested medicines, some of which
In August, Wu was put in charge of
overhauling China's product-safety enforcement after a string of recalls and
warnings abroad over drug-laced seafood, toxic toothpaste, faulty tires and
Wu joined the ruling party in her early
20s. She spent 15 years at the Beijing East is Red Refinery before becoming
an chemical company executive and in 1988 a deputy mayor of Beijing. She
became a deputy trade minister in 1991 and a member of the party Politburo
Wu has given no indication what she might
do in retirement. - 2007
October 21 AP
Vice-Premier Wu Yi has an
chattering classes, Wu Yi is known as the Iron Lady -- a nickname she didn't
earn by shying away from a challenge. In her youth, she was one of just a
handful of women who attended the Beijing Petroleum Institute, earning a
degree in engineering. Then early on she worked as a technician at the
remote Lanzhou Oil Refinery, climbing through a clubby, male-dominated
industry to become the ranking Communist Party official -- and de facto boss
-- of the Yanshan Petrochemical Corp. by 1983.
Wu has since moved into the rough-and-tumble world of Chinese politics. She
started out as a deputy mayor of Beijing, and today serves as a Vice-Premier
and top trade negotiator -- the only woman in China's 24-member ruling
Politburo. Key to her rise, according to those who know her: bull-headed
stubbornness leavened with a quick wit and a directness that's rare at the
pinnacle of Beijing power. "To her friends, she is very nice and
enthusiastic," says Lin Shipei, a student adviser from Wu's university
days who has kept in touch with her. "To her opponents, she is hard
That iron skin will serve Wu well as she prepares for her latest challenge.
In mid-April, Wu is scheduled to lead trade talks with White House officials
puffed up with election-year ire over lost jobs. The annual meeting of the
U.S.-China Joint Commission on Commerce Trade, once handled by lower-level
officials, has been upgraded to the ministerial level, so she'll hold talks
with Commerce Secretary Donald L. Evans and U.S. Trade Representative Robert
One reason for the increased urgency: A U.S. complaint before the World
Trade Organization claiming that Beijing offers its semiconductor industry
unfair protection. Other thorny issues on the agenda include concerns over
rampant counterfeiting and piracy of everything from brake pads and
windshields to Sex and the City DVDs and Viagra tablets; a tug-of-war
over China's proprietary standards for electronic communication chips, which
the U.S. fears would effectively shut foreigners out of the market; and
concerns that the Chinese currency is way undervalued, giving the country's
manufacturers an unfair advantage over foreign rivals. "There are some
very significant issues between our two countries," says Robert Kapp,
president of the U.S.-China Business Council in Washington. "And as far
as trade issues, most of that is landing on Wu Yi's shoulders."
SPOILING FOR A FIGHT. The stakes in this tussle are high. Since last
summer, a slew of high-level U.S. delegations have traveled to Beijing, and
Vice President Dick Cheney is scheduled to do so on Apr. 13. But these
officials haven't gotten much satisfaction. Washington has been looking for
a much tougher stance on the growing scourge of piracy and counterfeiting
than Beijing has offered, and has long raised concerns over regulations
requiring foreign companies to share their technology with local partners in
order to gain access to the Chinese market. Administration officials say
they have already cut China enough slack as the country has moved to fulfill
the commitments it made in joining the WTO. So when the 65-year-old Wu lands
on the banks of the Potomac, she'll find that Washington is spoiling for a
fight. "There is some point at which tolerance is exhausted," says
Grant D. Aldonas, a Commerce Dept. under secretary who has often negotiated
across the table from Wu.
China, of course, makes an easy target. Its trade surplus with the U.S. last
year swelled to $124 billion, U.S. figures show, up from $103 billion a year
earlier. And the strength of its manufacturing sector in everything from
clothing to TVs means it's being blamed for the woes of U.S. workers. On
Mar. 16, the AFL-CIO accused Beijing of tolerating abusive employment
conditions -- including a ban on independent trade unions -- that give China
an unfair trade advantage. The union's solution: punitive tariffs of up to
77% on Chinese imports -- an idea that is gaining support. "There isn't
any question that there are abusive labor practices in China," says
Senator Byron L. Dorgan, a North Dakota Democrat. "Do they affect
American workers? Of course.
With such anger in the air, Wu will clearly have her hands full with the
U.S. But she also has a tough constituency back home. Where American
business leaders see unfair advantage, China Inc. sees a system designed to
give it a fighting chance against oversize foreign rivals. Take China's
policy of refunding most of the value-added tax imposed on locally produced
semiconductors, which has sparked the WTO action. Although the same tax
break is available to foreign companies making chips in China, they don't
like it because they feel it's part of a campaign to force them to set up
joint-venture production and transfer their technology. Chip imports don't
get the same break. Chinese officials say the rule is fair because the money
is earmarked for research and development. "The rebate is to protect
our infant industry," says Li Ke, director of the information
department at the China Semiconductor Industry Assn. "You cannot say
this is a discriminatory tax policy.
Wu will be raising China's own trade concerns with Washington. One longtime
beef: U.S. restrictions on the export to China of so-called dual-use
technology -- goods that might serve military as well as civilian uses --
including high-speed computers and some encryption software. Nix the limits,
Beijing says, and the trade deficit will shrink. More recently, the U.S. has
slapped quotas, tariffs, and antidumping duties on a handful of Chinese
exports, including color TVs and cotton bras, and is considering tariffs of
more than 400% on wooden bedroom furniture. The restrictions, Wu will likely
say, have to go. "These actions don't comply with WTO rules and are
unfair to Chinese companies," says Li Yushi, vice-president of the
Chinese Academy of International Trade & Economic Cooperation under the
DEFUSING TENSIONS. Although widely popular, Wu has disappointed some
of her constituents before. Some critics say that as a leader of China's
delegation negotiating membership in the WTO, Wu sold out hard-pressed
industries such as agriculture by agreeing to lower tariffs on grain, fruit,
and vegetable imports. "Some of the compromises were unnecessary,"
says one graduate student of international relations at Beijing University.
"Personally, I don't think too highly of her.
Like her or not, there is little debate over Wu's abilities. One thing that
distinguishes her is her relatively modest upbringing. She doesn't hail from
a politically powerful family and so has risen through the ranks on her own
merits. She's no peasant, but her parents -- intellectuals in the central
city of Wuhan -- lived far from the power circles of China's capital. With
her degree in petroleum engineering, Wu paid her dues for 26 years in
China's oil and gas sector, including three years in the remote western
province of Gansu. Her no-nonsense approach caught the eye of former leader
Deng Xiaoping, who promoted her to deputy mayor of Beijing in 1988, and
deputy minister of trade in 1991. "Deng was looking for capable
technocrats -- and she is certainly that," says Cheng Li, a professor
of government at Hamilton College in Clinton, N.Y. Although she makes time
for concerts at the Beijing Symphony and a weekly game of tennis, the
unmarried Wu is "outspoken and works long hours, says Li.
It was as deputy trade minister that Wu really got noticed. Upon her
appointment, she started leading delegations to Washington to hammer out
agreements on policing knockoff goods and opening China's market to U.S.
companies. In the early years, she earned a reputation for toughness to the
point of intransigence. At the time, she was a "knowledgeable
negotiator," says U.S. trade official Aldonas. That means finding 19
different ways of reciting the same thing over and over again as you fend
off demands from the U.S. until the decision can be made at a higher level.
But she also won acclaim for her ability to defuse tensions with her
sometimes acid sense of humor. At one point, when U.S. negotiators were
pressing the Chinese to crack down on pirates stealing from multinationals
by selling counterfeit software and music, Wu countered that U.S. museums
are full of cultural relics plundered from China. A bit of a red herring,
perhaps, but the comment earned her plenty of admiration at home -- and the
respect of U.S. officials. Although she uses an interpreter, she speaks
enough English to understand much of what's being said and to throw in a
phrase or two at key moments. And despite her reputation, Wu has a softer
side, too. "The issues don't become personal with her," says
Charlene Barshefsky, U.S. Trade Representative in the Clinton
Administration, who negotiated with Wu over the terms of China's admission
to the WTO. Barshefsky particularly recalls a hand-dyed scarf that Wu chose
especially for her as a gift. "She can be tough as nails across the
table, and then she does something quite thoughtful," Barshefsky says.
Wu's reputation for hard work and competence has pushed her ever-higher in
the Chinese political firmament -- and won her jobs that extend far beyond
trade. During last year's SARS crisis, President Hu Jintao and Premier Wen
Jiabao tapped her to manage the response to the emergency, including
mobilizing teams of health inspectors and coordinating a nationwide medical
reporting system. For her trouble, she won the additional title of Health
Minister, a position she still holds. Since then she has won praise for her
effort to deal with problems ranging from HIV/AIDS to deteriorating health
care in rural China. And she hasn't been afraid to take bold steps. For
example, Wu Yi was the first top official to visit Gao Yaojie, an elderly
doctor who first exposed how serious AIDS had become in rural China, and who
had been put under temporary house arrest by nervous local leaders.
"She is the sort of person who really gets things done," says one
official with the Chinese Center for Disease Control & Prevention in
But trade has always been Wu's real specialty -- and her work in that sphere
is what may ultimately have the biggest effect on the future of China. Sure,
both China and the U.S. will likely try to paint the Washington talks as a
success, though passions are running high enough in this election year that
it may be difficult for them to reach agreement. "Both sides will be
very tough on all the issues," says Wang Yong, director of the Beijing
University Center for International Political Economy.
But the U.S. is China's second-largest trading partner, so Beijing can ill
afford to wage a trade war across the Pacific. Either way, the Iron Lady is
surely steeled for the fight.
- By Dexter Roberts in
Beijing, with Paul Magnusson in Washington Business
12 Apr 2004