China Emerging_ 1978-2008 - Xiao-bo , Wu [6]
Posing with a car. A view of the Forbidden City and a Red Flag automobile in 1980, at the very early stage of a still uncertain market economy.
Youngsters selling bowls of tea in front of the Wumen Gate of the Forbidden City. One large bowl cost 2 fen (Chinese cents). There was a very limited choice in beverages back then, and tea was sold everywhere.
and operations as fast as possible in
coal, nonferrous metals, oil, electric
power, electronics, weapons, trans
portation, communications, and even
feedstock.” Based on this discussion,
the central government formulated
a massive ten-year plan for attract
ing US$60 billion of foreign invest
ment, in order to expand industry, ter: Insert Photo agriculture, science and technology,1.17 here)and weapons production. The plan
included 120 large-scale projects, in
cluding mines, petrochemical plants,
and steel refineries.
For a long time after this dis
cussion, the government’s primary
responsibility became attracting
fo-reign business and foreign invest
ment. In a book titled The Building of
Modern China, author Peng Min
revealed that in 1978 alone, agree
ments worth more than US$7.8
billion were signed. Agreements
for around half of this amount were
signed in just ten days, from Decem
ber 20 to the end of that year.
In August 1978, the First
Machinery Industry Ministry in
charge of the automobile industry
in China issued telegrams invit
ing General Motors, Ford, Toyota,
Nissan, Renault, Citroen, Mercedes
Benz, Volkswagen, and others to
China, hoping that they would rush
to investigate the “China market.”
The first to arrive was General
Motors. On October 21, a large
delegationledbyThomasA.Murphy
arrived to discuss potential projects.
Li Lan-qing, the future vice premier,
received them, and later recalled
howMurphymentionedtheconcept
The earliest production line for Santana cars in Shanghai. For nearly fifteen years, Santana was the most popular car in China.
of a “joint venture.” He asked why the Chinese seemed only interested in importingtechnologyandnotinsettingupajointventure.LiLan-qinglater told CCTV reporters that although the Chinese people understood English and knew that the words “joint” and “venture” had something to do with “mutually shouldering risk,” they were very hazy about any details.
Shortly after this, a delegation from Volkswagen arrived in Shanghai. The delegation met with leaders to discuss a potential joint venture for producing Volkswagen cars. These discussions were to last a full ten years and the only thing the Chinese side insisted on was that Volkswagen had to localize its products.
Meanwhile, multinational companies had begun to enter China. In 1979, the first batch of 3,000 boxes of Coca-Cola departed from Hong Kong, bound for Beijing. After test marketing, the US side signed an agreement that included the donation of a bottling plant to the China National Cereals, Oils and Foodstuffs Corporation (COFCO) that could fill 300 bottles of Coca-Cola in a minute. The ten-year agreement gave an exclusive license to COFCO to use the Coca-Cola brand, and produce and sell its products on the mainland.
The first shipment of Coca-Cola arrives in Beijing, September 1979.
One amusing sequel to this story is that COFCO wanted to build the plant in Shanghai at the site of a time-honored soda-bottling plant, Aquarius Company, which was established in 1864. Shanghai resolutely opposed this. The charge against COFCO was that it was selling out the country, acting as a slave to westerners, and importing the decadent bourgeois lifestyle. It was also undermining the nation’s own industry. As a result, COFCO set up the factory in Fengtai outside Beijing. The production initially supplied tourist hotels, but this market was quickly saturated and after obtaining permission from the Ministry of Commerce, from 1982 onward, the surplus Coca-Cola was