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A Great Leap Backward?

Some have argued that in any transition from a planned to a market economy, corruption and inequality are necessary, or perhaps even useful. He Qinglian acknowledges that when a society and economy are stultified by political terror, as China’s were during the late Mao years, the unofficial trading of favors can indeed have a part in loosening up the system. But she argues that this stage has long passed in China, and that the effects of the corruption of the 1980s and 1990s have badly hurt the economy. She calculates that in recent years about 130 million yuan in public property has been diverted annually to private use. But she also calculates that only about 30 million of this sum actually reaches the economy as private capital. The other 100 million is spent on bribes, entertainment, and favors that are necessary to divert the money and to cover it up. Corruption thus hardly leads to efficiency.

The argument that inequality is beneficial in a period of transition had the personal blessing of Deng Xiaoping right from the beginning of the reform period. Deng argued that overall wealth will grow in a situation of inequality and that the resulting income will trickle down. He Qinglian accepts neither view. If it is true that accumulating capital is necessary in order to get private enterprise going, it is also plain, she shows, that the structure of privilege in China brought about cronyism more than efficiency. And she refutes the “trickle down” theory with the overwhelming evidence of growing inequality.

When reform began, many Chinese intellectuals hoped that economic growth would erode the authority of the Communist Party and lead to diversification of power under the rule of law. Twenty years later, in He’s account, the Party indeed has lost some of its political power, but has lost it not to the citizens but to a new robber-baron class that now allies itself with the Party in opposing the rule of law.

Chinese readers have received He Qinglian’s book with enthusiasm. When its Beijing edition was published in January 1998, the entire first printing of 100,000 copies sold out in less than two weeks. After that, five different pirated editions put 330,000 more copies into circulation. This extraordinary response can hardly be attributed to the book’s prose, which is laden with statistics and technical terms. It comes rather from the author’s untiring demonstration of a repressed truth: that the strategy of the Deng years—fast economic change and no political change—was a huge and terrible mistake. The symptoms of the mistake surface in the economy, but the root problem is political.

About a quarter of He’s book addresses the effects of rampant money-making on social morality. She finds, first, an “immense public indignation at social unfairness,” as the mocking popular sayings (shunkouliu) that circulate widely in China make clear. One adopts the viewpoint of an elderly state worker:

I worked my whole life for the Party
And had nothing at the time I retired;
Now they tell me to live off my kids,
But my kids one by one have been fired.

He Qinglian observes that “the complaints of most people about inequality are not against inequality per se but about the sordid methods by which wealth is achieved.” When ordinary people hear stories about greed at the top, they come to feel that it is pointless, and even a bit stupid, for the ordinary citizen to stick to moral behavior. If anything “trickles down,” in her view, it is cynicism and the abandonment of responsibility. Many of the shoddy goods that circulate in China come from state enterprises. If the government can cheat farmers with bad seeds or fake fertilizers, who is to blame ordinary people for injecting red coloring into watermelons or mixing water into ground meat? Another popular saying, archly entitled “A Short History of Comradely Sentiment,” runs:

In the 50s we helped people.
In the 60s we criticized people.
In the 70s we deceived people.
In the 80s everybody hired everybody else.
In the 90s we “slaughter” whoever we see.

The word “slaughter” (zai), which corresponds in both sense and tone to “rip off” in American English, is now widely used. Few people in the outside world appreciate how pervasive the attitude and practice of zai have become in China. Probably in no other society today has economic good faith been compromised to the extent it has in China. Contracts are not kept; debts are ignored, whether between individuals or between state enterprises; individuals, families, and sometimes whole towns have gotten rich on deceitful schemes. He Qinglian sees the overall situation as unprecedented. “The championing of money as a value,” she writes, “has never before reached the point of holding all moral rules in such contempt.” She finds the collapse of ethics—not growth of the economy—to be the most dramatic change in China during the Deng Xiaoping era. The challenge facing China is not just “survival” (which the Chinese government lists as the most basic human right) but “how to avoid living in an utterly valueless condition.” She does not hold out much hope.

He Qinglian’s book has much to say about China’s underworld economy—including drug trafficking, smuggling, sale of human beings, counterfeiting, prostitution, and pornography—and on the ways in which it has merged with the legitimate economy. In parts of the countryside, underworld leaders have either assumed political power or made alliances with Communist officials “to form a force that treats farmers almost like slaves.” He Qinglian concludes that

the emergence of the “government- underworld alliance” shows that progress toward a civil society ruled by law is no more likely an outcome for our country than is descent into a “mafia model.”

She leaves no doubt that, among many in the Communist elite, the zest for economic reform had little to do with abstract ideals about civil society and everything to do with enriching themselves and assuring that their socially privileged positions would be transferred smoothly from one economic system to another. The Communist Party has varied immensely over its seventy-seven years: from a guerrilla movement in the hills of Shaanxi to a cadre of bureaucratic managers; from “resist Japan” to “resist America” to “oppose the Soviets”; and from slogans like “fight selfishness” (late 1960s) to ones like “getting rich is glorious” (early 1980s). But essentially the same elite has remained dominant. This remarkable group, like a seal on a rolling ball, may not be graceful but it stays on top.


He Qinglian was born in Hunan Province in 1956. She was part of a generation of Chinese youth who were shaped by Mao’s Cultural Revolution. In 1966, He’s school, like all others in China, was closed down so that students could “make revolution.” When she was twelve she was shaken by the sight of human corpses floating in a local stream. At seventeen, after she went to work at a railroad construction site in the remote hills of West Hunan, she found a circle of friends whose social idealism became all the stronger as they became disillusioned with Mao. Most books were banned during the Cultural Revolution, but an unusual number of books circulated informally; she and her friends became devotees of works of the Russian literary and social critic Vissarion Belinsky (1811-1848), who commented that Russia must draw on the intellectual resources of Europe. In an afterword to her book, He writes that she owes to her friends in those years “my basic outlook on life as well as a sense of moral responsibility that has stayed with me ever since.” Wei Jingsheng, Xu Wenli, Zheng Yi, and many others in this generation also illustrate the paradox that Mao Zedong’s misguided moral crusade had beneficial consequences for China that Mao never imagined.12

With the changes following Mao’s death, He studied history at Hunan Normal University in Changsha beginning in 1978, and in 1985 began graduate work in economics at Fudan University. In 1988 she went to Shenzhen, the boom town just north of Hong Kong, to work as a newspaper reporter. She was irritated to see newspaper advertisements such as “Our company urgently seeks high level staff…. Preference will go to those with good connections in government,” and soon began collecting material for her book.

In passing, she makes telling comments on the state of academic economics as practiced in China today. She finds that the field is dominated either by “toady writing” that provides academic backing for the favorite ideas of politicians or by “techniques for dragon slaying”—a Chinese cliché for technically brilliant skills that have little practical use. She refers here to the field of “pure” economics, primarily an import from the West, that tends to ignore the ways in which politics and morality impinge upon economic questions. In a preface to He’s book, Zhu Xueqin, a professor of history at Shanghai University, writes:

In China, ever since the arrival of the planned economy in the 1950s, every cell of economic life has in fact been saturated with politics. Such a condition does not change just because “reform” is announced. What can it mean to study “pure” economic questions in such a context?… To talk about reform while ignoring the political content of Chinese economic structures is to weave a set of emperor’s new clothes.

After finishing her manuscript in August 1996, He Qinglian sent it to nine publishers in different parts of China. Editors were impressed but none would accept the risk of publishing her book. Eventually she settled for publication in Hong Kong, knowing that circulation into China would be limited. After the book was published there, she found an ally in Liu Ji, vice president of the Chinese Academy of Social Sciences in Beijing, who read the book, discussed it with He Qinglian for five hours, and backed its publication in Beijing. It appeared in January 1998 from China Today Publishers in nearly complete form, although some of He’s more provocative language—and two prefaces (including the one by Zhu Xueqin, quoted above)—were deleted. The title was revised from China’s Pitfall to the more euphemistic A Pitfall of Modernization.

Publication in China led to book reviews and interviews with He in the Chinese press, and she used her new celebrity to press her ideas further. In a recent article she notes that 1998 is the hundredth anniversary of the 1898 reforms that were aimed at saving the moribund Qing dynasty. She identifies five major problems that held China back in 1898—population size, agricultural stagnation, inequality, corruption, and low standards in education—and argues that all five are at least as severe now.13

Her emphasis on this anniversary was not arbitrary. Anniversaries are taken seriously in China, and “anniversary momentum” is now gathering there. Next year will be the eightieth year since the “Chinese enlightenment” of May Fourth, the fiftieth year since the founding of the People’s Republic, the twentieth of the “reform era,” and the tenth since the Beijing massacre. Chinese people tend to see in such anniversaries an opportunity to “take stock.” The fiftieth year of the People’s Republic, for example, will lead to comparisons between the Communists and the Nationalists whom they displaced. The corruption of the Nationalists was ugly in the late 1940s, but many say it is far worse now. Problems of inequality, vice, and crime, which the revolution swept away in the 1950s, have returned. A popular saying goes:

For forty-some years, ever more perspiration,
And we just circle back to before Liberation;
And speaking again of that big revolution,
Who, after all, was it for?

Each year since June 4, 1989, the police have taken steps to repress memorials of the Tiananmen massacre; next year the tenth anniversary will raise the stakes for both sides. Recently the government dealt with the hundredth anniversary of Peking University—a perennial source of democratic thought in China—by smothering open discussion under elaborate official ceremonies, which included a presidential visit to the campus and rigidly organized dances by uniformed children in Tiananmen Square.

Under the rule of a government as wary as China’s, how can conspicuously critical work such as He Qinglian’s be published at all? It helped that she had the backing of an important official like Liu Ji, and it helped as well that for the last twenty years economists have had more freedom to express themselves than others because the government views them as essential to the country’s modernization. It is significant, moreover, that He’s book was published in early 1998, when the government was more tolerant of critical commentary than it had been in the preceding year. In December 1997, Premier Li Peng, one of the more authoritarian of China’s leaders, had praised the popular television show Focus, which sometimes exposes official wrongdoing, especially in the provinces. In March, Li Peng also called for “criticism of problems and corruption in the Party” while Xiao Yang, chief of China’s Supreme Court, ordered an inquiry into corruption in the justice system. Such events, together with a relaxation of restrictions in book publishing, seem to amount to a coordinated policy.

This spring there was considerable speculation in the Chinese-language press in Hong Kong and Taiwan that the show of liberalization was designed to bamboozle Clinton, who was preparing to visit China in late June. But this explanation cannot account for Li Peng’s approval of an audacious television show or the appearance of a book like He Qinglian’s.

It seems more likely that the leadership felt it needed to calm popular unrest. With layoffs accelerating and the perception spreading that the rich are corruptly getting richer, the top leaders feel pressure to dissociate themselves from such trends. Since the Mao years, control of private speech has loosened to a point where the Party leaders can no longer suppress widespread informal complaints. The thousands of sardonic popular sayings that pass along the oral grapevine make this plain. When Li Peng praises Focus, he probably does so because he recognizes that he and others in the ruling group are better off when they seem to be siding, at least to some extent, with the critics.

There may be more to the question of why the authorities allowed publication of He’s book. Liu Ji, the official who sponsored it, is known to have some sympathy for He Qinglian’s humanist values, but he is also a member of President Jiang Zemin’s brain trust. It is hard to imagine him sponsoring a controversial book unless he thought that doing so would serve Jiang’s political interests.

He’s book can be useful to Jiang in the same way that “scar literature,” which exposed the painful history of the late-Mao years, was useful to Deng Xiaoping twenty years ago. In 1978 Deng wanted to inherit Mao’s mantle even as he distanced himself from the “catastrophe” of Mao’s Cultural Revolution. Scar literature was useful to him because it denounced the “Gang of Four,” who stood for Mao’s rule, without naming Mao himself. It thus helped to turn popular resentment of Maoism into popular support for Deng.

Jiang Zemin now inherits from Deng a Chinese economy that, along with rapid growth, has produced terrible problems and rising popular resentment. Jiang does not want to take personal responsibility for the mess, and in this he has a point. Deng Xiaoping, in his own words, was the “chief architect” of reform. Anyone who reads He’s book will understand that the problems of the reform period were deeply entrenched by the time Jiang took over. But even if Jiang Zemin succeeds in dissociating himself from the problems created by Deng, it does not follow that Jiang will lead China (as Deng did) in a fundamentally new direction. Jiang Zemin’s program for China remains largely a mystery. Indeed he may not have one.

If Jiang is unsure about where China is headed, he is not alone. The political thinking of Chinese intellectuals is more bewildered than it has been for a long time. Ten years ago there were two fairly clear camps in Chinese political thought: the conservatives, or “old leftists,” who defended the Maoist establishment, and the reformers or liberals who favored change—the camp that included most intellectuals. Today there is a third camp, one that is by nature conservative but that seeks to preserve not Mao’s China but Deng’s, arguing that the troubles discussed in He Qinglian’s book are the growing pains of a basically healthy process, which must be pursued. Many others dissent from this view, but disagree about what to do instead.

In order to get her book published at all, He Qinglian had to soften some of her criticisms of the Deng-era reforms. She could not name names, but still issued a daring challenge:

If the preponderance of new wealth we see today was gained illegally or through means that are inconsistent with fairness and justice, then we should launch a moral inquiry and an analytical crusade.

Her book itself begins this “crusade.” Beneath its surface, packed as it is with facts, numbers, and technical terms, the reader senses a deep anger. She raises fundamental questions about twenty years of reform: “China,” she writes, “is headed toward joint rule by the government and a mafia.” She asks: “When you have development that is built on the premise that people will pursue their interests at the cost of the…property and lives of others, is it really worth it?”

Even if one answers “yes,” He Qinglian argues, such a system will eventually destroy itself. “The systemic corruption in which pursuit of private interest undermines society’s legal system and public morality will inevitably kill [China’s] reform before it matures.” Today, eleven months after the appearance of He’s book, events in China are confirming her prediction. In March 1998 China’s top leaders announced emergency measures to address the current crisis: a plan to transform state enterprises and to pay their debts within three years; a plan to cut government employees by 50 percent, also within three years; and plans to reform the financial system, to rid it of corruption, and so on. In June, however, reliable sources in direct contact with the top leadership revealed that these plans were meeting stiff, and perhaps fatal, opposition. They had been proposed too late, the sources said. Had they been carried out in the early 1990s, there might have been hope for success.

What happened in China in the 1990s is thus becoming clear. Reform was aborted when Deng Xiaoping strangled China’s democratic forces in 1989 and when—as He Qinglian shows in detail—he decided in 1992 to buy stability for his regime by pursuing a rapid economic growth whose price was sharply increased corruption, financial deception, and the erosion of the moral basis of society.

September 9, 1998

  1. 12

    See Laifong Leung, Morning Sun: Interviews with Chinese Writers of the Lost Generation (M.E. Sharpe, 1994).

  2. 13

    Yige jingji xuejia yanzhong de wuxu bainian” [The Hundred Years Since 1898 as Seen by an Economist], Nanfang Zhoumo [Southern Weekend], April 17, 1998.

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