(p. C3) Up until the Covid pandemic, I spent years traversing the country to explore the Chinese Communist Party archives from the reform period. Access was at times surprisingly easy, and my findings were eye-opening.
. . .
The archives suggest that officials were aware of reform’s contradictions from its earliest days. Remnants of the command economy combined with what one economist called “selected, pasteurized, partial, truncated, restricted and disjointed pieces of market and private property policy.” The outcome, said Liu Guoguang, a professor of economics and alternate member of the party’s Central Committee, was “a confused economic system.”
Private ownership of intellectual property had no place in this system, and its theft was actively encouraged throughout the party hierarchy. Two government ministries jointly circulated a directive on counterfeiting in 1983, noting that due to the country’s legal obligations, it was necessary with such goods to “change the name of the product.” As one report noted, “We need a unified approach towards copying” so that “the quality of the copied equipment can be guaranteed.”
The counterfeiting of computer technology assumed particular importance after Zhao Ziyang, the country’s premier from 1980 to 1987, read “The Third Wave,” by the American futurist Alvin Toffler. The book predicted that, in the wake of the agricultural and industrial revolutions, a third revolution would be based on the computer. In October 1983, Zhao proposed skipping the second wave altogether: “Time and tide wait for no one, opportunity knocks but once,” he pronounced. To leap into the digital era, China would need to imitate and reverse engineer foreign products.
But the copying wasn’t limited to computer technology. By 2001, China was awash in fake pharmaceutical products and pirated Hollywood movies on DVD. China’s accession to the WTO that year led to a bonanza of copying, for which few consumers paid more than ordinary Chinese: Electric kettles blew up, brake pads failed. Spices contained paraffin wax, noodles used a red dye that caused cancer, and rice wine was made with cheap industrial-grade alcohol. In 2007, the government estimated that one-fifth of the food and consumer goods it checked were substandard or tainted.
China’s financial system rested on similarly shaky foundations. By the summer of 1988, the pace of growth led to double-digit inflation, and state banks were unable to pay villagers for their contractual deliveries of grain, cotton and other essential products. Protests in 1989, in Tiananmen Square and elsewhere across the country, were as much about economic as political discontent. About a fifth of the files in the party archives deal with debt—lending to solve the debt, further debt due to the lending, more lending to solve an even larger debt.
. . .
The image that emerges from the archives is very different from the impression that many have of today’s China. From a distance, the country’s gleaming cities may resemble an impressively shipshape tanker, with the captain and his lieutenants standing proudly on the bridge, but below deck, sailors are desperately pumping water and plugging holes to keep the vessel afloat.
For the full essay, see:
Frank Dikötter. “China’s Economic Miracle That Wasn’t.” The Wall Street Journal (Saturday, November 19, 2022): C3.
(Note: ellipses added.)
(Note: the online version of the review has the date November 17, 2022, and has the same title as the print version.)
The essay quoted above is adapted from Dikötter’s book:
Dikötter, Frank. China after Mao: The Rise of a Superpower. New York: Bloomsbury Press, 2022.