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After the start of reform and opening up, the government began to encourage the development of commune-based enterprises as a way to ameliorate economic hardship in farming villages. These enterprises were given strict guidelines by the government. They were to adhere firmly to the “direction of socialism”; they were primarily to serve the needs of agricultural production and to make useful and necessary products; and they were to provide the goods needed in larger-scale industries and for export. They were absolutely forbidden to manufacture products in which there was a surplus of productive capacity; they were also forbidden to “cook a meal without rice,” which means to make substandard products. They were not to compete for raw materials with larger-scale industrial enterprises, and they could not cause damage to the state resources in any way. However, China’s peasants have never lacked intelligence. Among them, many are not only deeply patriotic but also highly attuned to opportunity, especially since most of them have faced the basic need to survive. China’s farmers were willing to do whatever was necessary for survival. Many had already begun supplementing their farming activities with other forms of business.

In Xiaoshan of Zhejiang Province, a local farmer could be seen riding an old bicycle up and down alleyways, collecting any scrap metal he could find. With this metal, he made items to meet people’s needs. When word got out and people learned about him, they were amazed to find that he had been quietly doing this for the past ten years. In the fall of 1978, this man, Lu Guan-qiu, began to specialize in making those automobile spare parts that wore out the quickest. In order to force his way into the market, he set up a little booth outside trade fairs that admitted only state-owned enterprises. He set his prices 20% lower than any of the prices on the inside. In 1993, the enterprise that Lu Guan-qiu founded became the first TVE to be listed on the stock exchange.

Lu Guan-qiu, the first Chinese entrepreneur to appear on the cover of Newsweekmagazine.

In Jiangyin County, Jiangsu Province, another unassuming man went abouthisbusiness,evenasthedebateabout“tailsofcapitalism”ragedaround him. This was Wu Ren-bao, Party Secretary of Huaxi Village. Wu secretly set up a little workshop in the fields, making hardware items. When officials came by, everyone would be seen working in the fields. When they left, farmers would go back to their benches and make hardware. Wu was able to single-handedly create a highly lucrative industrial kingdom. In 1999, his village became the first village to raise money on the capital markets.

In the mid-1980s, the spirit of the market economy quietly affected a few places in the Chinese countryside. While reform and opening up were still being debated, the wheel of history was gathering momentum and could not be reversed. People were aware that the world had changed, and they now channeled their energies in all directions. By the time Deng Xiaoping declared, “Let some of the people get rich first,” getting rich was already the common goal of most Chinese. A materialistic era was soon to roll across the country.

PART 2

Commotion

and Tumult

1984 –1992

1984, the “Founding Year” of Major Chinese Enterprises

T

he year 1984 was a year of suggestive overtones. George Orwell’s novel had predicted a totalitarian era. However, this did not occur in capitalist countries or in socialist China. Rather, a wholly different scenario was being played out with abandon, as private enterprises swept

through the country. Instead of the normal morning greeting, “Have you eaten?” people would say to each other, “Have you jumped into the ocean yet?” This meant, “Have you taken the big step and left the security of a state-funded unit to start a private enterprise of your own?” Other sayings about how it was more lucrative to wield a barber’s knife than a surgeon’s and to sell eggs rather than work