China Emerging_ 1978-2008 - Xiao-bo , Wu [27]
Kentucky Fried Chicken was allowed to enter China in 1989. The photograph was taken at Qianmen in Beijing.
The first McDonald’s on the mainland of China opened at Dongmen in Shenzhen. This photograph was taken in January 2008.
putting an immediate stop to urban construction projects, which meant that some five million peasant workers would lose their jobs. These people had come into the cities from farming villages in search of work, and they were now forced to return to their rural homes. However, the economies in towns and villages turned out to be worse than those in the cities. Thus, the workers had no alternative but to turn around and try to find jobs in the cities again. After the Chinese New Year, when people traditionally go home for the holiday, millions of workers from the larger-population provinces of Henan, Sichuan, Hubei, and others began to clog the railroads and bus stations, trying to get into the cities. The crush of people on the move was tremendous. Large and medium-sized cities faced enormous lawenforcement problems. On March 9, the General Office of the State Council issued an “Emergency Notice,” requiring “a strict control on workers blindly coming into cities.”
With the situation at fever pitch, privately operated enterprises became the first target of the government’s “harnessing and rectifying” actions. In May, an investigation of the tax evasion of enterprises began in Jiangsu Province, where China’s private economy thrived the most. The investigation concluded that 80% of the enterprises were evading taxes. A national movement to rectify this problem began. According to theHistory of the PRC Economy, in the second half of 1989, the number of ge-ti-hu or registered private businesses decreased by three million. The number of privately administered enterprises was reduced from 200,000 to 90,600. The number of private enterprises did not experience any slight rise until 1991.
The second step the government took was to “clean up and rectify” the “new enterprises” outside the state-operated system. The new enterprises were blamed for their fights with state-operated enterprises over raw materials and causing inflation. They were regarded as traitors who had
brought on a national calamity by causing a loss of control over the market. In this rectifying movement, emphasis was placed on companies that produced home electronics, particularly refrigerators. The refrigerator industry had grown faster than any other, and was now at the very epicenter of the storm. These companies had been able to obtain domestic or imported raw materials for their production, even though this was strictly forbidden. It appears as if they had gone through all kinds of “channels.” In the years before 1989, if a company was not on a list of approved units, it was not allowed to import so much as a compressor, a ton of steel, or even test results. It was not allowed to place advertisements in any media. Yet somehow, these refrigerator companies managed to obtain raw materials and the number of such companies was also on the rise. Sixty-six refrigerator plants operated in Hangzhou, Zhejiang Province, alone, where people-operated enterprises had grown the fastest. Many of those “not on the list” were producing one hundred thousand refrigerators per year, while it was interesting to note that state-owned enterprises “on the list” not only had no new production lines in place, but also many of them had yet to build the workshops.
China’s economic growth in
1989 fell to its lowest level since
1978. Sources of financing dried up, consumer spending fell, and factories were unable to run at full throttle. Township and village enterprises shut down, unemployment increased, and money stopped circulating. Because of a sudden social upheaval, the positive changes that had been blooming over twelve years of reform, including a spirit of