China Emerging_ 1978-2008 - Xiao-bo , Wu [28]
The failure of releasing price controls, in addition to social turbulence and economic stagnation, now forced Chinese policy makers into a new way ofthinkingaboutmodelsforreform.Activistthinkinggraduallyreceded,and gave way to a more mainstream line of thinking that was in favor of gradual change. In 1989, Deng Xiaoping said, “The thing that outweighs all other considerationswhenitcomestoChina’sproblemsisthequestionofstability.” This word “stability” was soon to be seen more frequently in the media than anyothercatchphrase.InthefollowingNewYear’sEditorial,thePeople’sDaily
On November 9, 1989, Deng Xiaoping’s formal resignation was approved during the Fifth Plenum of the Thirteenth CPC Central Committee.
In 1990, when the Eleventh Asian Games were held in Beijing, China’s economy still remained in doldrums.
Wang Shuo, author of the book Riffraff, and film director Feng Xiao-gang in 1995.
Rock ‘n’ roll fans losing themselves in the music in 1990.
stated,“Wemustmaintainstability.Evenifwehavetogrowataslowyetsteady pace for ten years, China will achieve fundamental changes in the end.”
Contrary to the expectations of many Western scholars, China did not collapse. The country achieved a shift from economic overheating to stable growth, and “opening up” again became the main topic of how to develop the country. The Asian Games of 1990 could be regarded as a starting point in the process. In February 1990, Deng Xiaoping made a special trip to celebrate the Chinese New Year in Shanghai. On this occasion, he announced the decision to develop Pudong, the area across the Huangpu (Whampoa) River from the city of Shanghai. On April 18, Premier Li Peng and the State Council announced that the Central Committee of the Communist Party and the State Council had agreed to speed up the development in this area. They announced policies that would make Pudong into a new district as well as policies on the special economic zones. The commitment to Pudong allowed Shanghai to become the “dragon head” of Chinese economic growth. The long-term effects of these policies were enormous. From 1990–2004, Pudong’s GDP grew to RMB 179 billion, from a trivial RMB 6 billion. With one-eighth of the population of Shanghai and one-tenth of its land area, Pudong generated one-quarter of Shanghai’s GDP and its industrial output,
one-half of its exports, and onethird of its foreign investment. Within fifteen years, Pudong created the equivalent of another Shanghai. Pudong has become China’s reigning financial center, as well as home to its densest concentration of multinational headquarters. According to the 1990 Central Planning, Pudong would enjoy some preferential policies for fifteen years. In 2005, the State Council approved Pudong’s status as a place to pilot comprehensive reforms.
If Pudong was one of the wings that allowed Shanghai to take flight, then the other wing was the establishment of the Shanghai Stock Exchange. On December 19, 1990, the Shanghai Stock Exchange opened amidst a great flurry of activities. Zhu
The Shanghai Stock Exchange was established in 1990.
In the early 1990s, the Wanguo Securities Company in Shanghai was a meeting place where some hundreds and often thousands of people gathered every day, exchanging trading information on shares. In those days, as the retail clients’ hall was small and the screen to display stock quotes had not yet been installed, many would-be investors had to climb over the fence and peer inside the windows to see what was going on.
Rong-ji, China’s future premier, made the opening remarks. The person responsible for the Exchange beat a gong to announce the start of trading whereupon he fainted on the floor from all the excitement. The people of China had not played the game of “capital” for forty years, and there was a great deal of work to do to get things in order. Meanwhile, Shenzhen in the south was facing similar challenges in the rush to establish itself. On December 1, just prior to Shanghai’s opening, the Shenzhen Stock