Deng’s health deteriorated in the years prior to his death in 1997. During that time President Jiang Zemin and other members of his generation gradually assumed control of the day-to-day functions of government. This “third generation” leadership governs collectively with President Jiang at the centre.

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. Zhu Rongji was selected to replace Li as Premier.

China is firmly committed to economic reform and opening to the outside world. The Chinese leadership has identified reform of state industries as a government priority. Government strategies for achieving that goal include large-scale privatization of unprofitable state-owned enterprises. The leadership has also downsized the government bureaucracy.