China Emerging_ 1978-2008 - Xiao-bo , Wu [23]
In April 1988, Yunnan held its first bodybuilding competition, with curious onlookers standing outside the stadium.
Faced with these unintended consequences, one economist who espoused the two-track pricing system at the time, said, with a bitter laugh, “We sowed dragon seeds. But what we reaped were fleas.”
Economists have been and continue to be divided on how to evaluate the two-track pricing system. Some feel that the two-track pricing system allowed opportunism to become entrenched and systemic, creating largescale corruption. Others feel that this way of doing things was a success, and theyframetheirreasoningintheformofacounter-question.IfChinahadnot implementedatwo-trackpricingsystem,thecountrywouldhavehadonlytwo choices. It could have either continued along the single-track planned economy or used shock therapy to enter a single-track market system. The former was definitely not a viable solution. The latter, these economists feel, would havenotonlyledtowidespreaddisorderbutalsobroughtonallkindsofother problems. Once markets were opened up to market-driven forces, the originaleconomicstructureswouldnotchangeimmediatelybecausemonopolistic state-owned enterprises would have used their special interests and privileges to raise their prices. Before normal economic links could function smoothly,
the economy would have experienced extreme volatility. The two-track pricing system maintained a planned price, a kind of anchor, while at the same time releasing a portion of the market to marketdriven prices. Although this incubated corruption, economists in favor of the system believe that it provided nonstate-owned institutions with an opportunity to develop. It enabled them to enjoy rapid growth under the unconventional rules of the game of a two-track system.
When considered today, this debate about the twotrack system reflects the complexities of the Chinese economy. Any type of reform in the direction of a market economy is bound to require the paying of a certain price in a culture that has experienced several thousand years of agricultural civilization. The Chinese government has to maintain social stability, while at the same time stimulating the development of enterprises, which are the fundamental organisms of a market economy. How to carry out the marketoriented reforms in an orderly fashion is a balancing art because different forms of enterprise ownership co-exist and are mixed up as the country goes through one round after another of economic changes. Policies at any given time may stir up debate but the overall situation moves in the right direction. The fortunate and the important thing to remember is that China has not and will not turn around and go back in the other direction.
However, one aspect of China’s economic reforms that should provoke concern is the explosive appearance of psychological imbalances among the general populace. Everyone is thinking exclusively about how to make money, and a fundamental shift in values is underway. The People’s Daily published an article about three young journalists who wrote a book called Historical Direction of China’s Reform. In the book, the journalists caution, “Reform is a particularly complex form of ‘social systems engineering.’ One cannot draw up a seamless plan in advance and then simply implement it, for the process involves ongoing change. In the course of the ongoing adjustments, friction and conflict between different interest groups is going to be unavoidable.”
The first group of people from Taiwan to come “back home” arrives in Beijing on January 21, 1988. Atop the Great Wall, they shouted, “We’re home!” This first delegation mostly comprised old retired veterans from the KMT; returning had been a cherished dream for forty years.
People then did not like such a sharp message, as most of them were enchanted by the charms of reform. They were not aware of the repercussions of reform, specifically the changes it was inflicting on China’s social system, nor were they mindful of an overturn in fundamental concepts and a segmentation of Chinese