CAMBRIDGE, England -- Sometimes it takes a while for the significance of statements made by Chinese leaders to sink in. At a propaganda conference organized by the Communist Party Central Committee on Jan. 10, President Jiang Zemin said that the rule of law alone is not enough; there must also be rule of virtue.

The rule of virtue is a Confucian concept. When the Chinese Communist Party came to power in 1949, one of the first things it tried to do was wipe out Confucianism and replace it with Marxist-Leninist-Mao Zedong thought. Around 1984, Confucianism began to be referred to again, but to explain the Asian miracle (before it collapsed, that is). Now Jiang has gone whole hog and put Confucianism with its rule of virtue at the forefront of contemporary communist theory.

At another conference in Beijing, I complained about Article 7 of the new Wholly Individually-owned Enterprises Law. This article reads "Communist Party of China members in wholly individually-owned enterprises shall carry out their activities in accordance with the charter of the Communist Party of China." I complained that this would create difficulties for people and firms dealing with party members in such enterprises, as it introduced something seemingly above the rule of law, and hence something unpredictable, into business relationships.