China Emerging_ 1978-2008 - Xiao-bo , Wu [7]
Around the same time, China began to loosen restrictions on foreign journalists in the country. Okada, a journalist for the Nihon Keizai Shimbun was soon reporting that China’s flights were always cancelled. Another Japanese journalist visited a steel plant in Chongqing and discovered to his amazement that it was still using a 140-year-old British-made steamroller in its processing. Jay Matthews, a journalist for the Washington Post, overturned heaven and earth in order to obtain permission to visit a state-run factory in Guilin. He reported, “As in most factories in China, workers at this Guilin silk factory are not putting much effort into their work.” He then stated categorically, “This relaxed work attitude is going to be a major obstacle to the modernization of this most populous nation on earth.” The far-sighted British magazine, The Economist, predicted in one article that in the immediate future, China would
be importing equipment and that
this would stimulate production in
industriallyadvancedcountries.With
respect to the longer term, how
ever, “a ferocious flood of Chinese
exports is going to be the necessary
consequence.” Twenty years later,
this forecast certainly came true.
Contrary to people’s expec
tations, nothing was smooth and
easy for either side. Foreign in
vestors soon discovered that the
policy environment in China was
turbulent and opaque and also that
given the extreme backwardness of
its basic infrastructure, China was
not an ideal place for investment.
A German correspondent from
Der Spiegel, who had accompanied
Textile workers in the Number Two Textile Factory in Shanghai taking a lesson from their senior colleagues, 1982. For twenty years, the female textile workers in Shanghai and the male workers at the Daqing Oil Field were the role models for the rest of the country.
a Volkswagen delegation, wrote with a touch of derision, “Volkswagen will be operating on a kind of island. There are virtually no spare-part suppliers here, and China’s methods of production date back to my grandfather’s era.” The American businessman Charles Abrams was the first American businessman to realize the sorry state of affairs. In a 1980 issue of the Fortune magazine, he was still being described as “a successful representative of the new American dream of going to China to strike it rich.” A fiftyseven-year-old real estate salesman from New York, Abrams set up a trading company and made forty visits to China.
He concluded that China was like one big company. He was received warmly by Chinese officials and was able to obtain “white papers” and even initial orders and contracts worth tens of millions from many state-owned enterprises. On the basis of this, he successfully raised US$25 million on the New York stock exchange. However, during the following year, many of the contracts he had in hand turned out to be useless pieces of paper. A China expert at Harvard University, John King Fairbank, was soon to comment, “Importing US$60 million worth of projects in one year is not a realistic goal. Within about a year, China is going to have to reduce it dramatically. Many contracts that were signed will be cancelled or postponed because China simply lacks the ability to pay.”
As soon as Deng Xiaoping discovered that this plan was impossible to execute, he swiftly changed course. He now placed the emphasis on reforming the hundreds of thousands of state-owned enterprises, hoping that granting them more autonomy would stimulate productivity. At the same time, he began an experiment in the “Special Economic Zones” of southern China, which were geographically remote from the center in Beijing and where state-owned economic forces were the weakest. He used this “window effect” to attract foreign capital and technology.
A labor union card from 1979.
The road between Guangzhou and Shenzhen in 1982, with the signs, “To Shekou” and “To Guangzhou.” Back then, these were two highly tempting destinations.
Shenzhen Special Economic Zone
C
onsequently, in the spring of