Slipping Out of Zhu's Squeeze

Beijing backs down on the economic czar's short-term austerity, even as it pushes for medium-term reforms

HEADQUARTERED IN A SPRAWLING, 1950s-era complex just outside Beijing, the Shougang steel company is a symbol of China's economic prowess -- and its problems. Earlier this year, when credit was easy and the economy was steaming ahead at a 17% annual clip, the state-owned conglomerate and its 270,000 employees could hardly keep pace with consumer demand. Profits soared. Then came the credit crunch orchestrated by economic czar Zhu Rongji, and Shougang felt the sting at once. Customers slashed their orders, and soon Shougang could not pay its bills. The company last month was forced to take out a $70 million loan...

Want the full story?

Subscribe Now


Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!