Zhongguo de xianjing [China's Pitfall]
Most of the good news from China during the Deng Xiaoping era concerned the country’s economy. It grew at an average annual rate of 10 percent from 1981 to 1991, and 12 percent from then until 1995. Average personal income more than tripled in the 1980s, and doubled again in the first half of the 1990s.1 Some Westerners were dazzled. In November 1992, The Economist referred to “one of the biggest improvements in human welfare anywhere at any time,”2 and six months later Business Week told of “breathtaking changes…sweeping through the giant nation.”3 Foreign corporations, eager to be part of the China boom, poured investment in at record rates. China’s foreign currency holdings soared.
Yet during the same two decades, especially the 1990s, there was much bad news as well. People died from drinking phony liquor; fake fertilizers killed crops; there were growing markets for illicit drugs, for sweatshop labor, and even for the sale of young women for wives and male infants for sons. Corruption was rampant. Industrial pollution was serious and growing fast. State enterprises were failing, unpaid workers were striking, and banks were mired in bad debt. The gap between rich and poor became much wider. During 1997 and 1998 average personal income growth has fallen off sharply, and for large portions of both urban and rural poor it has reversed.4
No one during the Deng years produced a systematic account of how these two aspects of China’s economy were related. The regime and its defenders argued that so long as the economy surged forward, other problems would eventually take care of themselves. In the US, many business leaders, followed by the Clinton administration, argued that Western commercial engagement with China creates not only more wealth but progress toward democracy as well. Skeptics countered that more wealth, by itself, does not necessarily cure social problems or lead to democracy.
China’s Pitfall, the first systematic study of the social consequences of China’s economic boom, vindicates the skeptics so resoundingly as to force us to reconceive what “reform” has meant. In her book, which was published in Beijing early this year, He Qinglian, an economist trained at Fudan University in Shanghai, shows how Deng’s reforms between 1979 and 1997 did indeed lead China out of the stifling agricultural communes and urban work units of the Mao era. But what resulted, she argues, was not “civil society,” or even a market economy in the normal sense, but a strange way of life that the Chinese people had hardly imagined when they first embraced reform. She compares the Chinese people to the mythical She Gong, who felt a strong attraction to dragons in paintings, only to be terrified when confronted by a real dragon.
The first spurt of growth in the Chinese economy resulted from the release of farmers from the commune system beginning in the late 1970s. Besides growing and marketing their own crops much more efficiently than they had under state planning, farmers…
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