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Yellow River Capitalism

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In the 1980s, we were all reformists. We criticized old-style Maoist goals and practices. We looked at our circumstances through the ideas of the West. What we got was naïve and abstract because we didn’t really know what would happen to China once the market took off. We didn’t know that the market would create rich and poor: we thought it would benefit everyone. And for a few years it did.

Gan Yang

It was the Cuban cigars that first caught my eye. Half a dozen boxes of Cohiba, Romeo y Julieta and Montecristo piled high on Zhang Weiying’s desk in a haphazard monument to the economic opportunities of today’s China. These almost Freudian status symbols – worth several times a Chinese peasant’s annual income – are like pocket-sized pyramids, toiled over by workers for the rich to flaunt. Like the 300 skyscrapers of Shanghai or Beijing’s new Olympic Stadium they testify to the nature of an economy where labour has become a commodity, and money is spent almost as quickly as it is earned.

But for Zhang Weiying they are also pocket-sized fragments of freedom; products of a parallel universe – a republic of the West – that has been built alongside the Communist state in China; one whose dynamism he hopes will gradually eclipse and replace the last vestiges of Maoism. Like other economic liberals – or members of the ‘New Right’ as their opponents call them – he thinks that the planned economy is the foundation of political despotism; that China’s freedom will not come until the public sector is dismantled and sold off, and the state has shrivelled into a residual body designed primarily to protect property rights. Only then, according to the ‘New Right’, will a propertied class – a new civil society – be able to lay the foundations for democratic politics. The cigars, therefore, do not just show that getting rich is glorious, as symbols of private wealth they are milestones on the road to freedom.

Behind Zhang Weiying’s desk a glass-fronted display case glistened with the trophies and baubles of a distinguished career: books he has written and edited, pictures of him with Nobel laureates and statesmen, degrees from leading universities, and an award for ‘The Man of the Year in Chinese Economy’ from Chinese Central Television (CCTV) in 2002. They all reinforce the point that Professor Zhang Weiying has made it; that he is one of the most famous economists in China. But life today is getting tougher for economists like Zhang Weiying. After thirty years of ruling the roost with imported ideas from the West, they can feel China turning against them. Opinion polls show that they are the least popular group in China – on a par with traffic wardens and used-car salesmen in the UK. Public anger is growing over the costs of reform, with protests by laid-off workers coming together with concern over illegal demolitions, corruption and unpaid wages and pensions. As a result, the ideas of the market are being challenged by a ‘New Left’ which advocates a gentler form of capitalism. A battle of ideas is raging which pits the state against the market; coasts against inland provinces; towns against the countryside; the rich against the poor.

What Does China Think?

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