China Emerging_ 1978-2008 - Xiao-bo , Wu [9]
With the appearance of Shenzhen and other special economic zones, large amounts of both capital and human talent began to flow toward China’s southeast. This movement spawned the strange offspring of a changing economic system— opportunists who were adept at reselling or dao-mai in Chinese. They took advantage of the disparities between the two co-existing economic structures. They were called “masters of the art of reselling,” or “dao-ye” in Chinese. Their senses were highly attuned to market prices and to those nebulous areas of the changing system that were not covered by laws or regulations. This “grey” territory allowed them to carry on all kinds of rent-seeking activities. In cultivating official connections, they tripped lightly between Beijing and Shenzhen, and stories of overnight fortunes became common. In the end, like swarms of carpenter ants, these people chewed through the rigid restrictions that had bound the distribution system of a planned economy until it was left in tatters. People might disparage them and envy their wealth, but they played a very useful role.
In a short time, taking its cue from these reselling masters, Shenzhen became the chief headquarters for buying and selling for the entire country. Senior officials of inland provinces came to set up trading companies in Shenzhen, using its special privileges to carry out “reselling” directly. Dr. Thomas Chan of the Centre of Asian Studies, Hong Kong University, studied the phenomenon of Shenzhen and discovered that, by 1983, when Yuan Geng and others were espousing the four “Shenzhen development goals,”thesehadalreadydefactobeenshovedtooneside.Thefourgoalswere as follows: First, “In products, exports are primary”—however, in reality, imports exceeded exports by US$484 million. Second, “Importing advanced technology is primary”—however, in reality, any imported technology was mainly old equipment that had been discarded by Hong Kong and Japan. Third, “Foreign investment is primary”—while in fact, the percentage
Small-scale private business was just beginning in 1982, and the girl selling clothes looks very shy.
of foreign investment was only 30%, and most foreign investments came from Hong Kong. Fourth, “In terms of economic structure, industrial developmentisprimary.”However,in1983,Shenzhen’sindustrialproduction totaledRMB720million,whiletheretailvalueofconsumeritemsthatpassed through the zone was RMB 1.25 billion. The money made from trading far exceeded that made from industry.
Although the abrupt rise of Shenzhen did not conform to what was intended, its effectiveness as a role model is indisputable. Subsequently, whenever the economy ran into uncomfortable volatility, people could always pin the problems on Shenzhen. The implication was that this “extreme frontline” in China’s progress was perhaps moving too fast. When inflation picked up in 1985 and China began its first round of “macroeconomic adjustments” by tightening the money supply, the ramifications for Shenzhen were severe. Years later, Ren Zhong-yi, who had served as First Secretary of the Guangdong Provincial Party Committee, made the following remark: “Guangdong has had to fight its way along a bloody path, for the pressure on it has been intense. Back then, Guangdong was not only expected to lead the way in ‘feeling out’ the future but was also expected to bear the brunt of all resulting criticism. The Guangdong Provincial Party Committee simply stayed on track. It never deviated from the intention to open China to the outside world.”
The basic framework of China’s economy began to be rebuilt in 1979. All kinds of modern economic factors began