History of the People's Republic of China (1989-2002)
Encyclopedia
In the People's Republic of China
People's Republic of China
China , officially the People's Republic of China , is the most populous country in the world, with over 1.3 billion citizens. Located in East Asia, the country covers approximately 9.6 million square kilometres...

, Deng Xiaoping
Deng Xiaoping
Deng Xiaoping was a Chinese politician, statesman, and diplomat. As leader of the Communist Party of China, Deng was a reformer who led China towards a market economy...

 formally retired after the Tiananmen Square protests of 1989
Tiananmen Square protests of 1989
The Tiananmen Square protests of 1989, also known as the June Fourth Incident in Chinese , were a series of demonstrations in and near Tiananmen Square in Beijing in the People's Republic of China beginning on 15 April 1989...

, to be succeeded by former Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...

 mayor Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

. The crackdown in 1989 led to great woes in China's reputation globally, and sanctions resulted. The situation, however, would eventually stabilize. Deng's idea of checks and balances in the political system also saw its demise with Jiang consolidating power in the party, state and military. The 1990s saw healthy economic development, but the closing of state-owned enterprises and increasing levels of corruption and unemployment, along with environmental challenges continued to plague China, as the country saw the rise to materialism
Materialism
In philosophy, the theory of materialism holds that the only thing that exists is matter; that all things are composed of material and all phenomena are the result of material interactions. In other words, matter is the only substance...

, crime, and new-age spiritual-religious movements such as Falun Gong
Falun Gong
Falun Gong is a spiritual discipline first introduced in China in 1992 by its founder, Li Hongzhi, through public lectures. It combines the practice of meditation and slow-moving qigong exercises with the moral philosophy...

. The 1990s also saw the peaceful handover of Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...

 and Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...

 to Chinese control under the formula of One Country, Two Systems
One country, two systems
"One country, two systems" is an idea originally proposed by Deng Xiaoping, then Paramount Leader of the People's Republic of China , for the reunification of China during the early 1980s...

. China also saw a new surge of nationalism
Chinese nationalism
Chinese nationalism , sometimes synonymous with Chinese patriotism refers to cultural, historiographical, and political theories, movements and beliefs that assert the idea of a cohesive, unified Chinese people and culture in a unified country known as China...

 when facing crises abroad.

Restoring economic stability and growth

The inflation trends of the years leading up to the Tiananmen Square protests of 1989
Tiananmen Square protests of 1989
The Tiananmen Square protests of 1989, also known as the June Fourth Incident in Chinese , were a series of demonstrations in and near Tiananmen Square in Beijing in the People's Republic of China beginning on 15 April 1989...

 had subsided by the early 1990s, as Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

 and the new generation of leadership attempted to calm any economic influx. Political institutions have stabilized, owing to the institutionalized procedures of the Deng years and a generational shift from peasant revolutionaries to well-educated, professional technocrats. The majority of university graduates come from a sciences-oriented background, and many pursued life outside of China. For those who stayed, State-owned research firms and enterprises were a popular destination.

In the aftermath of the Tiananmen Square protests, China became an international pariah and the next three years were grim. Hardliners took over the government and began reigning in free enterprise. They also attempted to revive Maoist propaganda and ideological campaigns, but the public largely treated it with apathy. In practice, the changes of the last decade made it impossible to ever truly return to the ways of Mao's time. The CPC leadership was further embarrassed by the collapse of communism in Eastern Europe during 1989-1990, and especially by the fall of Romanian leader Nicolae Ceaușescu
Nicolae Ceausescu
Nicolae Ceaușescu was a Romanian Communist politician. He was General Secretary of the Romanian Communist Party from 1965 to 1989, and as such was the country's second and last Communist leader...

, as his fanatical regime was one they were certain would never fall. Despite retreating into its shell, China's government continued to state that it welcomed foreign business and investment. For all its weakness and unpopularity, the CPC nonetheless had no serious opposition, as most overseas dissident groups were divided, quarrelsome, and lacking a charismatic leader. In April 1990, Li Peng
Li Peng
Li Peng served as the fourth Premier of the People's Republic of China, between 1987 and 1998, and the Chairman of the Standing Committee of the National People's Congress, China's top legislative body, from 1998 to 2003. For much of the 1990s Li was ranked second in the Communist Party of China ...

 visited Moscow where he was faced with dozens of Soviet protesters denouncing him as a butcher. Li laid a wreath on Lenin's tomb, indicating his loyalty to a fading ideology. His ideas of reform did not extend beyond economic matters, and he flatly dismissed the idea that glasnost
Glasnost
Glasnost was the policy of maximal publicity, openness, and transparency in the activities of all government institutions in the Soviet Union, together with freedom of information, introduced by Mikhail Gorbachev in the second half of the 1980s...

 and perestroika
Perestroika
Perestroika was a political movement within the Communist Party of the Soviet Union during 1980s, widely associated with the Soviet leader Mikhail Gorbachev...

 were also applicable to China.

In the spring of 1992, Deng Xiaoping suddenly reappeared in public and embarked on a tour of southern China to restore faith in his reforms and stop the country's slide back into Maoism (on the trip, he criticized the CPC for its "continuing leftism"). The visit was not only Deng's last major public appearance, but also seen as a test for the direction of the new leadership. Deng's renewed push for a market-oriented economy received official sanction at the 14th Party Congress later in the year as a number of younger, reform-minded leaders began their rise to top positions. The congress also affirmed the position of Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

, a former mayor of Shanghai, as the new "core of CPC leadership", paving the way of Jiang becoming the "Third-generation" leadership figure. Deng and his supporters argued that further reform was necessary to raise China's standard of living. After the visit, the Communist Party Politburo publicly issued an endorsement of Deng's policies of economic openness. Though not completely eschewing political reform, China has consistently placed overwhelming priority on the opening of its economy.

Although another massive protest is unlikely in the near future, social instability due to economic conflicts has become a greater challenge for the third and fourth generation of leaders
Generations of Chinese leadership
Because both the Communist Party of China and the People's Liberation Army promote according to seniority, it is possible to discern distinct generations of Chinese leadership...

. Politically, however, Deng's experiment separating the governance of Party, Government and Military have proven to be a failed strategy under the current political system. During the recovery period, Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

 took the office of CPC General Secretary, President of the PRC, and Chairman of the Central Military Commission
Chairman of the Central Military Commission
The Chairman of the Central Military Commission of the People's Republic of China has overall responsibility for the Central Military Commission. According to Chapter 3, Section 4 of the Constitution of the People's Republic of China, "The Central Military Commission of the People's Republic of...

, securing political stability, and centralizing power yet again.

Deng's legacy

Deng Xiaoping was one of only a few peasant revolutionaries to lead China, along with Mao Zedong and the founders of the Han
Han Dynasty
The Han Dynasty was the second imperial dynasty of China, preceded by the Qin Dynasty and succeeded by the Three Kingdoms . It was founded by the rebel leader Liu Bang, known posthumously as Emperor Gaozu of Han. It was briefly interrupted by the Xin Dynasty of the former regent Wang Mang...

 and Ming
Ming Dynasty
The Ming Dynasty, also Empire of the Great Ming, was the ruling dynasty of China from 1368 to 1644, following the collapse of the Mongol-led Yuan Dynasty. The Ming, "one of the greatest eras of orderly government and social stability in human history", was the last dynasty in China ruled by ethnic...

 dynasties. Deng's policies opened up the economy to foreign investment and market allocation within a socialist framework, and put into practice a daring and unprecedented system that allowed free enterprise and capitalist ideas to grow and compensate for each other under a single-party political system. Since his death, under Jiang's leadership, mainland China has sustained an average of 8% GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

 growth annually, achieving one of the world's highest rates of per capita economic growth, and became the world's fastest growing major economy.

Also as mentioned, due in part to "socialist" measures and price/currency controls, the inflation characteristic of the years leading up to the Tiananmen protests has subsided. Political institutions have stabilized, due to the institutionalization of procedure of the Deng years and a generational shift from peasant revolutionaries to well-educated, professional technocrats. At the beginning of the 1990s it seemed that social problems have eased as well, as the PRC rapidly became a more modern, prosperous nation. According to journalist Jim Rohwer, for example, "the Dengist reforms of 1979-1994 brought about probably the biggest single improvement in human welfare anywhere at any time." This improvement was due to the fact that the reforms affected hundreds of millions of people.

Deng's reforms, however, have left a number of issues, mainly in the social and political arena, unresolved. As a result of his market reforms, it became obvious by the mid-1990s that many state-owned enterprises (owned by the central government, unlike TVEs publicly owned at the local level) were unprofitable and needed to be shut down to prevent them from being a permanent and unsustainable drain on the economy. As the pace of urbanization continued to increase, urban unemployment
Unemployment
Unemployment , as defined by the International Labour Organization, occurs when people are without jobs and they have actively sought work within the past four weeks...

 became a rising problem, and urban housing shortages caused the rise of low-income slum
Slum
A slum, as defined by United Nations agency UN-HABITAT, is a run-down area of a city characterized by substandard housing and squalor and lacking in tenure security. According to the United Nations, the percentage of urban dwellers living in slums decreased from 47 percent to 37 percent in the...

s in major urban centres like Shanghai
Shanghai
Shanghai is the largest city by population in China and the largest city proper in the world. It is one of the four province-level municipalities in the People's Republic of China, with a total population of over 23 million as of 2010...

 and Guangzhou
Guangzhou
Guangzhou , known historically as Canton or Kwangchow, is the capital and largest city of the Guangdong province in the People's Republic of China. Located in southern China on the Pearl River, about north-northwest of Hong Kong, Guangzhou is a key national transportation hub and trading port...

. Furthermore, by the mid-1990s most of the benefits of Deng's reforms, particularly in agriculture, had run their course; rural incomes had become stagnant, leaving Deng's successors in search of new means to boost economic growth in rural areas, or else risk a massive social implosion.

Finally, Deng's policy of asserting the primacy of economic development, while maintaining the rule of the Communist Party, has raised questions about its legitimacy in the West. Many observers both within China and outside question the degree to which a one-party system can indefinitely maintain control over an increasingly dynamic and prosperous Chinese society. Questions have also been raised about the amount of foreign enterprise within China, and the time it takes before the government will no longer be able to effectively control private enterprise to fit their standards.

Deng Xiaoping died on February 19, 1997. Party General secretary Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

 delivered an official eulogy to the late revolutionary and Long March
Long March
The Long March was a massive military retreat undertaken by the Red Army of the Communist Party of China, the forerunner of the People's Liberation Army, to evade the pursuit of the Kuomintang army. There was not one Long March, but a series of marches, as various Communist armies in the south...

 veteran stating, "The Chinese people love Comrade Deng Xiaoping, thank Comrade Deng Xiaoping, mourn for Comrade Deng Xiaoping, and cherish the memory of Comrade Deng Xiaoping because he devoted his life-long energies to the Chinese people, performed immortal feats for the independence and liberation of the Chinese nation." His ideology, Deng Xiaoping Theory
Deng Xiaoping Theory
Deng Xiaoping Theory , also known as Dengism, is the series of political and economic ideologies first developed by Chinese leader Deng Xiaoping. In theory, it does not reject Marxism or Mao Zedong Thought but instead seeks to adapt them to the existing socio-economic conditions of China.Since the...

, became an official "guiding ideology" in the national Constitution in the subsequent meeting of the National People's Congress
National People's Congress
The National People's Congress , abbreviated NPC , is the highest state body and the only legislative house in the People's Republic of China. The National People's Congress is held in the Great Hall of the People, Beijing, capital of the People's Republic of China; with 2,987 members, it is the...

.

Return of Hong Kong and Macau

Hong Kong was returned to PRC control after a 99-year-lease to Great Britain
Great Britain
Great Britain or Britain is an island situated to the northwest of Continental Europe. It is the ninth largest island in the world, and the largest European island, as well as the largest of the British Isles...

 on July 1, 1997. The agreement reverting control had applied Deng's theory of One Country, Two Systems
One country, two systems
"One country, two systems" is an idea originally proposed by Deng Xiaoping, then Paramount Leader of the People's Republic of China , for the reunification of China during the early 1980s...

. Hong Kong was to maintain independence in all areas except for foreign affairs and defence, withholding any major changes for another fifty years. Macau
Macau
Macau , also spelled Macao , is, along with Hong Kong, one of the two special administrative regions of the People's Republic of China...

 reverted to Chinese control under a similar agreement with Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...

 on December 20, 1999. The two former colonies kept separate legal systems. The return of the two colonies meant the installation of an unprecedented political system, and the legal matters involved thereof, especially those involving Hong Kong's Basic Law
Hong Kong Basic Law
The Basic Law of the Hong Kong Special Administrative Region of the People's Republic of China, or simply Hong Kong Basic Law, serves as the constitutional document of the Hong Kong Special Administrative Region of the People's Republic of China...

, became the subject of constant debate. The subject of the amount of control the Mainland has over the former colonies' political institutions had raised many questions both internally and abroad. Some debate ensued over the legitimacy of Hong Kong Chief Executive Tung Chee-hwa and the level of democracy in Hong Kong, as the colony is supposed to remain economically independent from the mainland for another fifty years. Hong Kong is also fighting against Shanghai to keep its status as the regional commercial hub.

Third generation of leaders

Deng's health deteriorated in the years prior to his death in 1997. During that time, General secretary Jiang Zemin and other members of his generation gradually assumed control of the day-to-day functions of government. This "third generation" leadership governed collectively with Jiang at the "core". Jiang was initially seen as an unlikely candidate for the position of General secretary, and was believed to be simply a power transition figure. In reality, however, Jiang's era saw the return to complete, centralized leadership by 1998, after ousting rival party leader Qiao Shi
Qiao Shi
Qiao Shi is a politician in the People's Republic of China. He was born as Jiang Zhitong , to parents of Dinghai, Zhejiang province ancestry. He is said to be distantly related to Chiang Kai-shek's family and this was the cause for the persecution he suffered during the Cultural Revolution...

 and firmly taking the positions of the CPC General secretary, the President, and the Chairman of the Central Military Commission
Central Military Commission
A Central Military Commission or National Defense Commission is an organisation typical of Communist one-party states, responsible for supervising the nation's armed forces....

, becoming paramount leader
Paramount leader
Paramount leader literally "the highest leader of the party and the state ", in modern Chinese political science, unofficially refers to the political leader of the People's Republic of China....

 of China's tripartite Party-State-Military functional structure.

With support from Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

 and Li Peng
Li Peng
Li Peng served as the fourth Premier of the People's Republic of China, between 1987 and 1998, and the Chairman of the Standing Committee of the National People's Congress, China's top legislative body, from 1998 to 2003. For much of the 1990s Li was ranked second in the Communist Party of China ...

, then General secretary and Premier respectively, the government enacted tough macroeconomic control measures. The PRC began expunging low-tech, duplicated projects and sectors and projects in transport, energy, agriculture and sectors, averting violent market fluctuations. Attention has focused on strengthening agriculture, still the economic base of the developing country and on continuing a moderately tight monetary policy.

In March 1998, Jiang was re-elected President during the 9th National People's Congress. Premier Li Peng was constitutionally required to step down from that post. He was elected to the chairmanship of the National People's Congress
National People's Congress
The National People's Congress , abbreviated NPC , is the highest state body and the only legislative house in the People's Republic of China. The National People's Congress is held in the Great Hall of the People, Beijing, capital of the People's Republic of China; with 2,987 members, it is the...

. Vice Premier Zhu Rongji
Zhu Rongji
Zhū Róngjī is a prominent Chinese politician who served as the Mayor and Party chief in Shanghai between 1987 and 1991, before serving as Vice-Premier and then the fifth Premier of the People's Republic of China from March 1998 to March 2003.A tough administrator, his time in office saw the...

 was nominated as premier of the State Council
State Council of the People's Republic of China
The State Council of the People's Republic of China , which is largely synonymous with the Central People's Government after 1954, is the chief administrative authority of the People's Republic of China. It is chaired by the Premier and includes the heads of each governmental department and agency...

 by President Jiang Zemin
Jiang Zemin
Jiang Zemin is a former Chinese politician, who served as General Secretary of the Communist Party of China from 1989 to 2002, as President of the People's Republic of China from 1993 to 2003, and as Chairman of the Central Military Commission from 1989 to 2005...

 to replace Li and confirmed by the Ninth National People's Congress
National People's Congress
The National People's Congress , abbreviated NPC , is the highest state body and the only legislative house in the People's Republic of China. The National People's Congress is held in the Great Hall of the People, Beijing, capital of the People's Republic of China; with 2,987 members, it is the...

 (NPC) on March 17, 1998 at the First NPC Session. He was reelected Standing Committee member of Political Bureau of 15th CPC Central Committee in September 1997. Zhu was believed to be a tougher and more charismatic leader compared to the generally unpopular Li Peng.

Falun Gong

While the government under Jiang Zemin allowed further opening of the Chinese economy, a more liberal and materialistic environment gave way to the emergence of various schools of new-age social and religious thinking. Falun Gong
Falun Gong
Falun Gong is a spiritual discipline first introduced in China in 1992 by its founder, Li Hongzhi, through public lectures. It combines the practice of meditation and slow-moving qigong exercises with the moral philosophy...

 (法轮功 lit. The Practice of the Wheel of Law) was a qigong practice founded by Li Hongzhi
Li Hongzhi
Li Hongzhi is the founder and spiritual master of Falun Gong , a "system of mind-body cultivation" in the qigong tradition. Li Hongzhi introduced Falun Gong on 13 May 1992 in Changchun, and subsequently gave lectures and taught Falun Gong exercises across China...

 in 1992, and holds some similar beliefs to Buddhism
Buddhism
Buddhism is a religion and philosophy encompassing a variety of traditions, beliefs and practices, largely based on teachings attributed to Siddhartha Gautama, commonly known as the Buddha . The Buddha lived and taught in the northeastern Indian subcontinent some time between the 6th and 4th...

 and Taoism
Taoism
Taoism refers to a philosophical or religious tradition in which the basic concept is to establish harmony with the Tao , which is the mechanism of everything that exists...

. In the next few years, under CPC supervision, Li published various books on the practice, and attracted an estimated 70 million followers in Mainland China
Mainland China
Mainland China, the Chinese mainland or simply the mainland, is a geopolitical term that refers to the area under the jurisdiction of the People's Republic of China . According to the Taipei-based Mainland Affairs Council, the term excludes the PRC Special Administrative Regions of Hong Kong and...

 alone, exceeding the number of Communist Party members. The practice of Falun Gong meditation exercises claimed to improve physical and mental health. There are conflicting ideas as to just how the spiritual movement spread so fast.

As the movement spread to larger proportions, people began gathering in squares in united practice sessions, sitting for hours practicing meditation exercises. Owing to criticism of the practice by academics and certain inner party elements, beginning in 1999, practitioners resorted to group appeals or letter writing. Numerous letters were written to local party and government leadership in attempts to restrict what was considered "unfair" media criticism of Falun Gong. A newspaper article denouncing "teenagers practicing Qi Gong," with some parts specifically targeting Falun Gong, in Tianjin
Tianjin
' is a metropolis in northern China and one of the five national central cities of the People's Republic of China. It is governed as a direct-controlled municipality, one of four such designations, and is, thus, under direct administration of the central government...

 in April triggered a series of events which eventually led to over 10,000 practitioners silently protesting outside the Beijing Zhongnanhai
Zhongnanhai
Zhongnanhai is an area in central Beijing, China adjacent to the Forbidden City which serves as the central headquarters for the Communist Party of China and the State Council of the People's Republic of China. The term Zhongnanhai is closely linked with the central government and senior Communist...

 Compound, near China's Central Appeals Office, to appeal for the release of detained practitioners. The unprecedented event had raised alarm bells for China's top leaders. Premier Zhu Rongji
Zhu Rongji
Zhū Róngjī is a prominent Chinese politician who served as the Mayor and Party chief in Shanghai between 1987 and 1991, before serving as Vice-Premier and then the fifth Premier of the People's Republic of China from March 1998 to March 2003.A tough administrator, his time in office saw the...

 met with several Falun Gong representatives, coming to a compromise, agreeing to a few, but not all demands. This decision, however, reputedly resulted in a great rift in the Politburo, with Zhu holding moderate views, and Jiang Zemin personally alarmed by the seriousness of the situation, and in favour of a complete crackdown. Some political analysts have suggested that Jiang was using the situation to strengthen his own core of CPC leadership, while CPC supporters contend that Falun Gong's continual spread would result in unwanted political instability in a still fragile and growing economy.

On June 10, 1999 the government set up the "6-10 Office", an extra-constitutional organization in charge solely of the Falun Gong crackdown. China's state-controlled media vilified Falun Gong and denounced it as an unhealthy element in society. On July 22, CCTV
China Central Television
China Central Television or Chinese Central Television, commonly abbreviated as CCTV, is the major state television broadcaster in mainland China. CCTV has a network of 19 channels broadcasting different programmes and is accessible to more than one billion viewers...

's Xinwen Lianbo ("Continual News") at seven in the evening, as well as many provincial and municipal TV networks, labeled Falun Gong as an "evil cult", and was extended to three hours over the regular half-hour broadcast. Regular programming was in many cases disrupted for up to a week. On July 23, the People's Daily
People's Daily
The People's Daily is a daily newspaper in the People's Republic of China. The paper is an organ of the Central Committee of the Communist Party of China , published worldwide with a circulation of 3 to 4 million. In addition to its main Chinese-language edition, it has editions in English,...

contained a full-page editorial titled "Enhance Knowledge; See Clearly the Harm; Hold on to Policies; Maintain Stability", criticizing Falun Gong as "corrupting people's minds, creating chaos, and destroying society's stability." Officially after 1999, party organs claimed that Falun Gong, being an "evil cult," had used deception to manipulate and attack the psychology of the common people, and that its aims stretched into the political and economic realm. State run media was quick to show echoing commentary by scholars and "experts." The beginning of the crackdown saw state-controlled media repeatedly claim that Falun Gong was nothing more than a scheme to earn money, through the retailing of Falun Gong books and merchandise that was done through a complicated hierarchical sales system. The dominant view in the West regards these reports as largely falsified, reminiscent of similar Communist Party propaganda campaigns such as seen during the Cultural Revolution. The popularity and growth of Falun Gong is considered legitimate, with the assertion that it was no more than the healthy spread of certain religious beliefs to which people felt connected.

On July 22, 1999 Falun Gong founder Li Hongzhi, then in exile in the United States, published a statement entitled "A Brief Statement of Mine" in which he urged "all governments, international organizations, and people of goodwill worldwide to extend their support and assistance to us in order to resolve the present crisis that is taking place in China." and claimed that Falun Gong "does not have any particular organization, let alone any political objectives. We have never been involved in any anti-government activities." http://clearwisdom.net/emh/download/publications/peacereport_statement.html

Falun Gong supporters and Human Rights organisations claim that thousands of practitioners have been tortured, beaten, subjected to psychiatric abuses, put in forced labour camps or experienced other forms of persecution, and that tens of thousands more have been imprisoned. http://www.amnesty.org.nz/web/pages/home.nsf/dd5cab6801f1723585256474005327c8/83fba691f912206bcc2571d3001824ed!OpenDocument Falun Gong practitioners have continued to appeal for an end to the persecution and legalisation of the practice, including western Falun Gong practitioners travelling to China to protest. http://asia.cnn.com/2001/WORLD/asiapcf/east/11/20/china.falungong/index.html Practitioners inside China have distributed leaflets and VCDs to counter what they see as the state controlled media's propaganda campaign against Falun Gong. They have also resorted to hacking into state run television to broadcast their views. http://www.fofg.org/news/news_category.php?cat_id=9&FormNewscat_Page=4 Such an incident in March 2002 in Changchun sparked a string of arrests with thousands of practitioners reportedly being detained, as well as reports of some being tortured or beaten to death. http://www.upholdjustice.org/English.2/Liu_Chengjun's_death.htm

Economic development

Amidst maintaining political stability, Premier Zhu Rongji
Zhu Rongji
Zhū Róngjī is a prominent Chinese politician who served as the Mayor and Party chief in Shanghai between 1987 and 1991, before serving as Vice-Premier and then the fifth Premier of the People's Republic of China from March 1998 to March 2003.A tough administrator, his time in office saw the...

 kept things on track in the difficult years of the late 1990s, maintaining mainland China's averaged growth at 9.7% a year over the two decades to 2000. The ability of the PRC to chart an effective course through the recent Asian Financial crisis, which crippled Southeast and East Asian economies (including that of Hong Kong and Taiwan), was also rather noteworthy. Part of the survival was owed to the state's overall control of the economy. Against the backdrop of the Asian financial crisis and the catastrophic 1998 Yangtze River Floods
1998 Yangtze River Floods
The 1998 Yangtze River floods was a major flood that lasted from middle of June to the beginning of September 1998 in the People's Republic of China at the Yangtze River.-Tolls:The event was considered the worst Northern China flood in 40 years...

, mainland China's GDP
Gross domestic product
Gross domestic product refers to the market value of all final goods and services produced within a country in a given period. GDP per capita is often considered an indicator of a country's standard of living....

 still grew by 7.9% in the first nine months of 2002, beating the government's 7% target despite a global economic slowdown. Active state intervention to stimulate demand through wage increases in the public sector and other measures showed certain strengths in the Chinese economic system in times of hardship.

While foreign direct investment
Foreign direct investment
Foreign direct investment or foreign investment refers to the net inflows of investment to acquire a lasting management interest in an enterprise operating in an economy other than that of the investor.. It is the sum of equity capital,other long-term capital, and short-term capital as shown in...

 (FDI) worldwide halved in 2000, the flow of capital into mainland China rose 10%. As global firms scramble to avoid missing the China boom; FDI in China has risen 22.6% in 2002. While global trade stagnated, growing by one percent in 2002, mainland China's trade soared by 18% in the first nine months of 2002, with exports outstripping imports.

Zhu tackled deep-seated structural problems which more conservative leaders were afraid of letting go. Uneven development was a major issuse, as was the remaining state-owned enterprises. In addition, inefficient state firms and a banking system mired in bad loans and lost funds to foreign countries. Substantial disagreements over economic policy resulted in the party leadership, as the tensions focused on the pace of change. Zhu was long known to have been involved in a divisive relationship with President Jiang.

The PRC leadership was also struggling to modernize and privatize State-owned enterprises (SOEs) without inducing massive urban unemployment. A generation of people that suffered due to the Cultural Revolution
Cultural Revolution
The Great Proletarian Cultural Revolution, commonly known as the Cultural Revolution , was a socio-political movement that took place in the People's Republic of China from 1966 through 1976...

 that lacked the proper education or applicable skills has found it increasingly difficult to find a stable place in the increasingly privatized workforce. As millions lost their jobs as state firms closed, Zhu demanded financial safety nets for unemployed workers. While mainland China will need 100 million new urban jobs in the next five years to absorb laid off workers and rural migrants; so far they have been achieving this aim due to high per capita GDP growth. Under the auspices of Zhu and Wen Jiabao
Wen Jiabao
Wen Jiabao is the sixth and current Premier and Party secretary of the State Council of the People's Republic of China, serving as China's head of government and leading its cabinet. In his capacity as Premier, Wen is regarded as the leading figure behind China's economic policy...

, his top deputy and successor, the state has been alleviating unemployment while promoting efficiency by pumping tax revenues into the economy and maintaining consumer demand.

Critics have charged that there is an oversupply of manufactured goods, driving down prices and profits while increasing the level of bad debt in the banking system. But demand for Chinese goods, domestically and abroad, is high enough to put those concerns to rest in the time being. Consumer spending is growing, boosted, in large part, due to longer workers' holidays.

Zhu's right-hand man, then Vice-Premier Wen Jiabao
Wen Jiabao
Wen Jiabao is the sixth and current Premier and Party secretary of the State Council of the People's Republic of China, serving as China's head of government and leading its cabinet. In his capacity as Premier, Wen is regarded as the leading figure behind China's economic policy...

 oversaw regulations for the stock market, campaigned to develop poorer inland provinces to stem migration and regional resentment. Zhu and Wen have been setting tax limits for peasants to protect them from high levies by corrupt officials. Well respected by ordinary Chinese citizens, Zhu also holds the respect of Western political and business leaders, who found him reassuring and credit him with clinching China's market-opening World Trade Organization
World Trade Organization
The World Trade Organization is an organization that intends to supervise and liberalize international trade. The organization officially commenced on January 1, 1995 under the Marrakech Agreement, replacing the General Agreement on Tariffs and Trade , which commenced in 1948...

 (WTO) deal, which has brought foreign capital pouring into the country. Zhu remained as Premier until the National People's Congress met in March 2003, when it approved his struggle to clinch trusted deputy Wen Jiabao
Wen Jiabao
Wen Jiabao is the sixth and current Premier and Party secretary of the State Council of the People's Republic of China, serving as China's head of government and leading its cabinet. In his capacity as Premier, Wen is regarded as the leading figure behind China's economic policy...

 as his successor. Like his fourth-generation colleague Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...

, Wen's personal opinions are difficult to discern since he sticks very closely to his script. Unlike the frank strong-willed Zhu, Wen, who has earned a reputation as an equally competent manager, is known for his suppleness and discretion.

Crises abroad

In May 1999, NATO forces undergoing bombing operations in Yugoslavia during the Kosovo War
Kosovo War
The term Kosovo War or Kosovo conflict was two sequential, and at times parallel, armed conflicts in Kosovo province, then part of FR Yugoslav Republic of Serbia; from early 1998 to 1999, there was an armed conflict initiated by the ethnic Albanian "Kosovo Liberation Army" , who sought independence...

 bombed the Chinese embassy
NATO Bombing of the Chinese embassy in Belgrade
On May 7, 1999, during the NATO bombing of Yugoslavia , five US JDAM bombs hit the People's Republic of China embassy in the Belgrade district of New Belgrade, killing three Chinese reporters and outraging the Chinese public. President Bill Clinton later apologized for the bombing, stating it was...

 in Belgrade
Belgrade
Belgrade is the capital and largest city of Serbia. It is located at the confluence of the Sava and Danube rivers, where the Pannonian Plain meets the Balkans. According to official results of Census 2011, the city has a population of 1,639,121. It is one of the 15 largest cities in Europe...

. The event resulted in the death of three Chinese journalists, as well as a strong wave of Anti-American sentiment, gaining strength daily from mass denunciations in the Chinese media on the event. Many ordinary citizens saw the attack as one on Chinese patriotism, therefore national unity was variably strengthened. People with no regular affiliation with the CPC came out and spoke against American hegemony. The Americans officially declared the incident an accident, but the apologies and other official statements seemed unconvincing to the vast majority of the Chinese public, and some military analysts and journalists. Various anti-American protests followed on a nationwide scale, with the most concentrated in Beijing near the American Embassy.

The Chinese government officially condemned the action and demanded a full apology. In an official statement, then-Vice-President Hu Jintao
Hu Jintao
Hu Jintao is the current Paramount Leader of the People's Republic of China. He has held the titles of General Secretary of the Communist Party of China since 2002, President of the People's Republic of China since 2003, and Chairman of the Central Military Commission since 2004, succeeding Jiang...

 declared the action as "barbaric" and behind the basic principle of ignorant "American hegemony". In the same statement he raised traditional slogans regarding the strength of the Chinese people, to rally behind the government and Jiang's leadership a huge portion of the populace. As protests escalated, the Central Government began changing its tone in an attempt to calm the outpouring wave of nationalism. Russia was largely on side.

At the turn of the century, although China had a relatively healthy economy with increased foreign investment, it faced a more precarious position on the global scale. Human rights
Human rights
Human rights are "commonly understood as inalienable fundamental rights to which a person is inherently entitled simply because she or he is a human being." Human rights are thus conceived as universal and egalitarian . These rights may exist as natural rights or as legal rights, in both national...

 became the concern for many western governments, and most leaders of western powers mention the issue every time on an official state visit. Pro-Taiwan Independence
Taiwan independence
Taiwan independence is a political movement whose goals are primarily to formally establish the Republic of Taiwan by renaming or replacing the Republic of China , form a Taiwanese national identity, reject unification and One country, two systems with the People's Republic of China and a Chinese...

 forces of the Democratic Progressive Party
Democratic Progressive Party
The Democratic Progressive Party is a political party in Taiwan, and the dominant party in the Pan-Green Coalition. Founded in 1986, DPP is the first meaningful opposition party in Taiwan. It has traditionally been associated with strong advocacy of human rights and a distinct Taiwanese identity,...

 won the elections in Taiwan for the first time, limiting talks of Chinese reunification
Chinese reunification
Chinese reunification refers to the bringing together of all of the territories controlled by the People's Republic of China and the Republic of China under a single political entity...

. Li Teng-hui published his "Two Countries Statement", the first of its kind labelling Taiwan as an independent entity separate from China. And then, in April 2001, a collision occurred
Hainan Island incident
On April 1, 2001, a mid-air collision between a United States Navy EP-3E ARIES II signals intelligence aircraft and a People's Liberation Army Navy J-8II interceptor fighter jet resulted in an international dispute between the United States and the People's Republic of China called the Hainan...

 between a US spy-plane and a Chinese military jet near the island of Hainan
Hainan
Hainan is the smallest province of the People's Republic of China . Although the province comprises some two hundred islands scattered among three archipelagos off the southern coast, of its land mass is Hainan Island , from which the province takes its name...

, straining China-US relations even further.

Meanwhile, in July 2001, the PRC and Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...

 signed the twenty-year Treaty of Friendship and Cooperation
2001 Sino-Russian Treaty of Friendship
The Treaty of Good-Neighborliness and Friendly Cooperation Between the People's Republic of China and the Russian Federation is a twenty-year strategic treaty which was signed by the leaders of the two international powers, Jiang Zemin and Vladimir Putin, on July 16, 2001.-Overview:The treaty...

, aimed at increasing Sino-Russian
Sino-Russian relations
Contact between China and Russia began in 1618, when the Tsardom of Russia sent Ivan Petlin to the court of the Chinese Ming emperor as its first official representative. Prior to the 1600s, most of Siberia was controlled by independent tribes...

 cooperation and mutual assistance in various areas, covering economic
Economy
An economy consists of the economic system of a country or other area; the labor, capital and land resources; and the manufacturing, trade, distribution, and consumption of goods and services of that area...

, military
Military
A military is an organization authorized by its greater society to use lethal force, usually including use of weapons, in defending its country by combating actual or perceived threats. The military may have additional functions of use to its greater society, such as advancing a political agenda e.g...

, diplomatic
Diplomacy
Diplomacy is the art and practice of conducting negotiations between representatives of groups or states...

 (including Taiwan
Political status of Taiwan
The controversy regarding the political status of Taiwan hinges on whether Taiwan, Penghu, Kinmen, and Matsu should remain effectively independent as territory of the Republic of China , become unified with the territories now governed by the People's Republic of China , or formally declare...

), energy
Energy policy
Energy policy is the manner in which a given entity has decided to address issues of energy development including energy production, distribution and consumption...

 and ecological
Ecology
Ecology is the scientific study of the relations that living organisms have with respect to each other and their natural environment. Variables of interest to ecologists include the composition, distribution, amount , number, and changing states of organisms within and among ecosystems...

fronts. The move was seen as another step towards balancing out US dominance in global affairs. China and Russia had also agreed upon a complete border treaty between the two countries.
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