China Emerging_ 1978-2008 - Xiao-bo , Wu [44]
A wedding in 1987.
A wedding in a hutong, Beijing, 1997.
Korean and Japanese corporate groups during the financial crisis, the central government in fact lost confidence in this path. If Daewoo was unable to withstand the attack of international financial capital, how could China’s Daewoo-like companies escape the same fate?
Thus, a new strategy appeared. This was summed up as “State out, People in.” Its basic premise was that state-owned capital should exit the purely competitive arenas. Experts proposed that state-operated enterprises should “resolutely retreat from” 164 competitive industrial sectors. At the same time, the government should stay in strategic, resource-type sectors by establishing an absolutely monopolistic position. These sectors included steel, resources, automobiles, airlines, telecommunications, electricity, banks, insurance, media, large-scale equipment, and munitions. In these sectors, the government should do everything in its capacity to exclude the competition of all privately-operated and internationally funded entities. Through forceful monopoly, the government should protect the vested interests of state-operated enterprises. It should be the owner of stateoperated capital, and its role in these enterprises should not be weakened but instead, strengthened. The confirmation of this national policy had a decisive influence on China’s economy and on the way in which these major state-owned enterprises were to grow.
A cross-national wedding or mixed marriage in 1997.
PART 4
Swamps and
Landmines
1998 –2002
Some Hairpins
D
uring the plenary sessions of the National People’s Congress and the Chinese People’s Political Consultative Conference held in March 1998, Zhu Rong-ji was appointed as premier. On March 19, at around 10:30 a.m., the new premier took questions from a television
journalist. He declared, “I am tasked with heavy responsibilities during this session. I can feel the enormity of the task. I hope that I can meet the hopes and expectations of the people. Whether the way ahead is strewn with landmines or blocked by miles of impassable swamps, I will go forward. I will not look backward. I will bend my back to the work in front of me and die before I give up.”
“Landmines” and “swamps” are two words that aptly describe the huge difficulty back then in pushing forward China’s reforms. China had
A peasant worker connecting the wires up an electric pole at dusk.
Bowling in a county town, photographed in 1998.
been through twenty years of reform, and the time had come to show more progress. Zhu Rong-ji made a promise to the people that within the next four years, he would accomplish three goals. First was to preserve the value of the renminbi and prevent its devaluation. Second was to revive the economy by stimulating domestic demand, and third was to enable stateowned enterprises to emerge successfully from their problems within three years. This last goal seemed to be virtually impossible to achieve at the time, but a reform of real significance was indeed in the works.
The most pressing matter for Zhu Rong-ji was preserving the value of the renminbi. It is believed that at the beginning of 1998, the great “crocodile,” George Soros, among others, decided to attack the Hong Kong dollar, to which the renminbi was tightly linked. At the time, given the handover to China in 1997, Hong Kong was in the midst of panic, with real estate prices falling and many people thinking of leaving. Within a day, international speculators dumped more than HK$20 billion, followed by another HK$20 billion the following day, with the expectation that such an action would bring about a fall in price, at which time they would buy in again and reap the profit. The Hong Kong Monetary Authority gritted its teeth and intervened with its Exchange Fund. The