China Emerging_ 1978-2008 - Xiao-bo , Wu [11]
Young employees of the watch and television factories in Hangzhou were serving the people.
in fact workshop directors. On the one hand, such enterprises were clearly not equipped to face competition. On the other hand, the state-owned enterprises held the economic lifeline of the country, were intimately tied to issues of social stability, and could not simply be done away with. They also embodied extremely complex personal relations among tiers of people, so that reforming them was almost unimaginably difficult. In order to resuscitate the deeply entrenched large enterprises, the first prescription that
A privately operated bookstall near a movie theater. Some two hundred people would come here daily to borrow books for a small fee.
Many people hoped that their living conditions would improve if they allowed developers to demolish their old homes and move them to new accommodations. However, the developers held back since there was no profit due to the large number of people.
Popped rice was a favorite food when other snacks were not available; this photograph was taken in Hangzhou, 1984.
A photography studio in Baxian County, Hebei Province, January 1982. Long pigtails were considered old fashion by this time, so the girl is wearing a hat to look more fashionable.
The Beihai Park, Beijing, 1980. Film-development technology had just arrived in the country, and young men and women could be seen everywhere checking their newly developed films.
A fashionable youth who has not yet learned how to tie his new tie properly. Photographed in 1983.
policy makers considered was to expand their autonomy in decision making. In May 1979, the State Council announced that eight large state-owned enterprises would be the first to pilot the policy of autonomy expansion.
Some of these were Capital Steel, the Tianjin Bicycle Factory, and the Shanghai Diesel Engine Plant. In July, five documents were issued concurrently, aiming to expand the decision-making power of these stateowned enterprises. This included considerations related to allowing profit retention, improving the use of depreciation allowances, levying tax on fixed assets, and turning disbursements of government funds for working capital into “credit loans” rather than simple “allocations.” With these measures, the long journey of reviving state-owned enterprises began. Many economists were to spend sleepless nights over the problems and it was only years later that they came to the conclusion that the underlying crux of the problem had always been the ownership of assets. Yet, several decades later, as China’s economy surged ahead, the monopolistic position of certain state-owned enterprises enabled them to become China’s most profitable companies.
Problems in reforming these enterprises in the early years quickly became apparent. Capital Steel employed over 200,000 people, but the head of the factory did not have the authority to “reform” a single toilet. In order to receive greater autonomy in decision making, Capital Steel proposed the idea of what was called a “cheng-bao” or contract system.
The factory guaranteed a basic amount of production to the government to fulfill its “Plan” requirements. Anything produced over that amount could be kept for its own account. Losses as well as gains were to be shouldered by the factory. In an era of extreme imbalance between supply and demand, when all goods were in short supply and everything that a monopolistic factory produced could immediately be sold, the fast growth of “reformed” enterprises was a foregone conclusion. As Capital Steel made an increasing amount of money, authorities
December 28, 1978: At thirty degrees below zero, people lining up early in the morning to buy alcohol with their coupons. Each family was allotted coupons for two bottles