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By Root 1229 0

to having an oil well outside your front door. The islanders were soon immersed in a frenzy trying to obtain import authorizations. Everyone wanted to dao-mai cars, or buy and resell the paper for importing them, at a profit. Senior government officials later admitted, ruefully, “Even kindergartens were dealing in authorizations to import cars. Those authorizations could be turned into money. You could take them to other provinces and sell them. They didn’t have authorizations. Hainan did! Just by turning a piece of paper around, selling it to someone else, you could make money!”

Street scene in a small city.

In the summer of 1984, practically everyone on Hainan was talking about “cars.” You would hear and see this in teahouses, restaurants, hotels, shops, government organizations, factories, schools, newspapers, and even kindergartens and day-care centers. In the first half of 1984, Hainan imported just two thousand cars. However, in July, the local government suddenly authorized the import of 13,000 cars, thirty-six times the monthly average of the first half of the year. The black market for foreign currency

A stream of peasant workers heading out to find jobs. Peasant workers in the mid-1980s.

Liping, Guizhou, 1985.

Shanghai in 1986. The bicycle brand

“Forever” was very popular at the time.

An old man doing small-scale business in 1987. He was able to make a few renminbi every day.

A Shanghai street scene in 1986. Back then, it was a privilege to be able to buy home appliances.

In 1986, a group of state-managed shops was openly sold at an auction in Beijing and was changed to private ownership.

became an openly traded market, and the price of foreign exchange rose wildly. The exchange rate between US dollar and RMB jumped from 1 to 1.5 before July 1984 up to 1 to 4.4, and even 1 to 6 thereafter. People brought in huge bundles of renminbi, and surged toward the Pearl River Delta area to exchange them into Hong Kong dollars. Similarly, many in Shenzhen, Beijing, and other places were quick to smell the scent of gold in this Hainan policy. At that time, the import of home electronics and other consumables was severely restricted in China. One had to obtain permission directly from the State Council. Cars, motorcycles, spare parts—all were restricted. Hainan Island now had its own special right to import, and even a fool could recognize the potential exorbitant profit. Hainan became irresistible.

Within six months, the Hainan Fever was over. Only a few “ rotten-tail buildings” stood around in the rain as a sign of the just bygone, glorious days. Due to the unequal pace of economic development in the various regions of China, during the early periods of reform and opening up, this phenomenon was inevitable. The moment the floodgates opened, all resources and energy flowed into the low-lying ground, to soak up any possible profits. This led to an unexpected chaotic situation. In Hainan and elsewhere, policy makers then had to address the problems with multiple remedial measures.

Stimulated by the Hainan fervor, the whole of China was embroiled in an economic fever in the mid-1980s. Credit increased ferociously, the central bank printed money night and day, and the entire country was swamped in a wave of imported foreign equipment.

From 1985 to 1987, China imported one hundred and fifteen color televisionproductionlines,seventy-threerefrigeratorproductionlines,fifteen copierproductionlines,thirty-fivealuminum-materialfabricatingproduction lines, twenty-two integrated circuit production lines, and six frostedglass production lines, among other things. The province of Guangdong alone imported twenty-one textile production lines, eighteen beverage containerization production lines, twenty-two food-packaging production lines, and twelve furniture production lines. Newsweek published an article that described the situation in vivid terms: “A group of engineers, technical people, and packaging workers arrived at an industrial town in France, and began to work day and night dismantling a refrigerator factory that