Category Archives: China

by Joel | 23 November 2009 · 5:31 pm

One Child’s Language: at 32 months (and abroad)

Social notes: Rachel is experimenting with social graces now. She plays with using please and thank you sometimes, and is working up to saying xiexie (‘thank you’) and zaijian (‘goodbye’) aloud in Chinese. Her strategy seems to be to listen and repeat to herself for a long time while she is mastering something new, then finally perform out loud.

She often gets very upset if we let a guest into the house without her help, or see someone off before she gets to wave goodbye. One day, Daddy came home from school in the afternoon, let himself in, and went in to find Rachel and Mama in the kitchen. Rachel immediately cried that she wanted to meet Daddy at the door. So Daddy went back outside in the stairwell, Rachel sent him down to the landing, then she walked down the steps to greet him on the landing with “Hello, how are you?” She nodded her head in response to “Fine, thank you. And you?” and then turned around and said “Well, let’s go up.” She repeated this ritual about ten times before our downstairs neighbors, Uncle Xu and Auntie Ni, came out to invite Rachel to play with them.

For quite a long time now, she has not gotten tearful when we drop her off at school, and she has a “best friend” there now. When she hears classmates’ names she can point them out, but she won’t say their names out loud to us.

Intellectual notes: In Freudian jargon, she still shows a lot of typically “anal retentive” behavior. She is compulsive about arranging and matching things. If you slip out of your shoes, she is liable to run off with them to arrange them carefully among other shoes. When she gets dressed, she is always concerned that everything should match. After eating, she will often get down and rearrange the magnetic letters and numbers on the refrigerator door. She is more concerned about matching shapes than about sequential order, so she groups 694, 25, 17, 38, VY, KX, MN, IL, CG, FR, BD, OU, and so forth.

Language notes: Rachel is speaking more and more Chinese. Her teachers say she is becoming more verbal at school. She must be saying a lot more Chinese to herself than to anyone else. She is quite aware of the tones in Chinese and experiments with them sometimes. Everyone at school tries to get her to say simple greetings to them, but they are content for now if she simply shows she heard and understood them.

Her pronunciation keeps improving. She has /s/ and /z/, /ch/ and /j/ pretty much under control. When she demonstrated that she could produce a clear /s/ one day on the way home from school, Daddy praised her and asked her when she would be able to say /k/ as well. She said “Soon.”

She still sings school songs at home and also sings a lot of English songs. She sings This Old Man up through number five or six. (On one of our excursions she got to see a beehive up close, so she no longer needs prompting for “hive”.) Her going-to-sleep ritual every night includes the same series of songs: Sleep Baby Sleep, Teddy Bear (“Dayto” Bear), Mockingbird (Hush Little Baby), and then Angels Watching Over Me (“That Guy Is Watching Over Me”). She sings along on all of them and recently recorded them on tape, singing by herself.

She knows the lowercase as well as uppercase printed letters now. (After trying to think of easy terms other than “big/little” to distinguish the two styles, we just settled on “uppercase/lowercase”—and so has Rachel.) She often utterly loses her chain of thought when her eye catches any letter or Chinese character she can read. She reads off numbers on license plates or hotel-room doors as she walks by. Sometimes she spells words from right to left.

UPDATE: This child is now a 24-year-old teacher in Boston’s Chinatown.

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by Joel | 20 November 2009 · 7:37 am

One Child’s Language: at 30 months (and abroad)

Social notes: Rachel is a full member of the family now. She has her own independent moods, desires, habits, hobbies, and insights. Her many observations intrigue and delight us and her usually buoyant mood lifts us when we are feeling cold and discouraged. She is more and more articulate about the specialness of our family relationship. She likes to repeat “Mama, Daddy, Rachel” as she points to each of us, sometimes misnaming us for our collective amusement. She often calls Daddy “Mama” and vice versa. When she does, she just smiles and repeats her error to reaffirm it. She has also discovered our given names and sometimes uses them to amuse us. She likes to sit us all next to each other and often calls for three-person hugs. She gives nice strong hugs now. She likes to refer to us as “this baby’s Mama” and the like. When we were travelling, she once said, “If Rachel goes to Guangzhou by Rachel’s self, Rachel will cry.”

She continues to feel more comfortable with familiar people. She warms up to students and people we visit much quicker than she used to, and is willing to show off a bit for them when she’s in the mood. She readily waves goodbye to everyone and anyone—even the most obnoxious of the “hello, hello” types. She really likes her teachers at school and knows them all by name. They really like her too, and spend a lot of time teaching her Chinese and eliciting English words from her. Rachel recognizes her classmates when we run into them around town, and knows many of their names. She has also become much more attached to and affectionate toward her stuffed animals, and likes to arrange them around her when she’s sitting on her potty chair or lying down to sleep.

Intellectual notes: Rachel’s compulsion about arranging things has reached the stage where she will take every loose object in the house and make long lines across the floor. When she finishes a line she calls us to come look, and then spends some time sucking her thumb, rubbing her belly button, and surveying her work with an artist’s eye.

She also likes her routines to be just so. When Daddy doesn’t do exactly what Mama did the day before, she will object. One day, Daddy sang Old King Cole as he stirred Rachel’s milk into her oatmeal, inadvertently establishing a ritual. Only the living room will serve for the nighttime milk-drinking and teeth-brushing routine.

Right before we took our winter trip, Rachel started to ask WHY everything. “Oh, that boy has no shoes on! Why?” “Oh, that’s a steam locomotive! Why?” Now, about three weeks later, she is trying out “that’s why” constructions: “Rachel’s cold, that’s why Rachel has no pants on.” (She still gets it backwards sometimes.)

She has begun to exercise her imagination and sense of humor a lot. She will turn herself into a roaring lion, an old lady with a walking stick, a vendor and shopper at the market, or a train passenger with bags and ticket. One night, she said “Rachel is sleeping with Rachel’s eyes open because Rachel doesn’t have eyelids.” She laughs “Rachel made a moo-take!” when she slips up, and likes to deliberately set out to make us laugh with funny faces, words, or movements.

Language notes: Rachel makes a clear distinction between occasions to use Chinese and English. Sometimes when we use Chinese, she will protest, “But Daddy’s an English speaker!” She is still not very talkative at school, but gets chatty in English as soon as we show up. She frequently asks “How Rachel say X in Chinese?” Sometimes she gets confused: “How Rachel say China in English?” She has learned to read a few more characters: 中国 (Zhongguo, China), 美国 (Meiguo, the US), 中山大学 (Zhongshan Daxue, Zhongshan Univ.), and 园林管理处 (Yuanlin Guanlichu, Forest Park Management). [Well, the last only in the context of the sign in the photo that we passed on the way to her school and back everyday.] She sat up in bed one night and said “Apple is pingguo” and then lay back down to sleep.

Her teachers were astounded to find that she knew all the letters of the English alphabet. (They seem rather easily astounded.) She knows how to spell her own name, and can say the 7 syllables of her full name pretty fluently. Her grammar is coming along nicely: “Rachel thought this walrus had a blue shirt on.” “If Rachel runs down this ramp slowly, Rachel won’t fall down.”

CHILD’S SCHOOL RECORD
OFFICIAL NO. 2 KINDERGARTEN – SMALL CLASS
NAME BO LIQIU, WEIGHT 29 lbs. HEIGHT 89 cm. (35 inches)
CHILD’S SCHOOL PERFORMANCE
Able to adapt very quickly to kindergarten life. Comes to school on time everyday. Asks for leave when needed. Able to play together with her little playmates. Likes to listen to stories. Can chant simple nursery songs. Can do morning exercise and play games. With teacher’s guidance, can do drawing exercises. Ability to get along independently has improved. Regularly washes her hands before eating and wipes her mouth afterwards. Can eat by herself. Noon nap normal. But usually drinks little water. Hope next semester to strive for even greater improvement.
TEACHER: ZHOU
HEAD OF HOUSEHOLD’S OPINION
SIGNATURE: BO DEXIAO

UPDATE: This child is now a 24-year-old teacher in Boston’s Chinatown.

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by Joel | 19 November 2009 · 6:45 am

One Child’s Language: at 27 months (and abroad)

Rachel’s command of Chinese is growing. She still doesn’t volunteer to speak any, but she understands simple Mandarin and Cantonese at school. Her teachers teach her Chinese and she teaches them English, correcting them if they make mistakes. In Chinese, she can count quickly to ten, and knows basic body parts, items of clothing, and animals. At home she rehearses songs from school. In fact, she is now able to carry a tune (as well as her parents at least) and is sensitive to rhythm and rhyme. She frequently wanders around singing songs and rhymes to herself.

She loves to recite the Mother Goose rhymes we read her. She knows Pease Porridge Hot and Eeny Meeny Miny Moe by heart, and objects if we don’t stop to let her fill in the rhyming words in many others that we read her. The Grand Old Duke of York is one of those she loves to help recite. One time her Daddy said “Eeny Meeny Miny Yes” and she responded by trying to make all the lines rhyme with yes. She goes crazy saying Goosey Goosey Gander. When Daddy recited a nursery rhyme destroying the rhyme and using Rachel’s worst pronunciation, she said, “No, that not right.” Then she recited the rhyme and declared, “That’s right.”

We have worried that her English pronunciation won’t improve quickly, since we are the only native speakers of English that she talks to, and we already understand her idiosyncracies. But lately she has begun to mind her /p/ and /b/ and /m/ sounds. One day she managed to put /b/ in bubble bath. Since then, she has been changing a few of her all-purpose /d/ and /t/ to /b/ and /p/ when they should be. The /g/ and /k/ sounds may not be far behind. Any sounds that Chinese and English share should get double reinforcement. But old pronunciation habits die hard. She still has to stop and think before saying her name with an initial /r/ rather than /d/.

She is still eager to read. She pretends to read things sometimes, moving her head as if she’s scanning the lines. She has also started to read Chinese, starting with the characters for Zhongshan City (中山市). She spots them on signs or city vehicles all over the place. We’re helping her with some basic ones like Fire (火), Woods (林), Person (人), Water (水), and the like. But right now she is more eager to sing and recite rhymes than to read letters. She recites rather than reads many of her favorite passages in books.

She knows clearly now that she is dealing with two separate languages, and she doesn’t object any more if we English speakers use Chinese with her. She elicits the names of the languages by counting in one language and then the other, asking “What Rachel saying?” after each series of numbers. She also knows how to ask “What that mean?” if she doesn’t know the English equivalent of a Chinese word. Her nose, which is often runny these days, she calls bizi as often as she calls it her nose.

UPDATE: This child is now a 24-year-old teacher in Boston’s Chinatown.

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by Joel | 9 November 2009 · 9:17 pm

Watershed Face-off: 1979 vs. 1989

While Europeans and Americans are remembering the major transformation of international relations in 1989, economic historian Niall Ferguson argues that 1979 marked a much greater watershed.

The real question about Russian policy today is not whether Russia will invade Ukraine, but whether Gazprom’s strategy of investing in new pipelines and gas fields will pay off. Should Gazprom focus on developing its dominant position in the European natural-gas market? Or should the vast gas fields of Russia east of the Urals (Yamal, Arctic, Far East) be given precedence with a view to capturing market share in China? Could Russia one day establish an Organization of Gas Exporting Countries, modeled on the Saudi-dominated oil cartel? Or is the simpler strategy simply to stoke trouble in the Middle East, covertly encouraging the Iranians’ nuclear ambitions until the Israelis finally unleash airstrikes, and then reaping the rewards of a new energy price spike?

These questions themselves indicate the limited long-term significance of the Soviet collapse of two decades ago. By comparison, the events of 10 years earlier—in 1979—surely have a better claim to being truly historic. Just think what was happening in the world 30 years ago. The Soviets began their policy of self-destruction by invading Afghanistan. The British started the revival of free-market economics in the West by electing Margaret Thatcher. Deng Xiaoping set China on a new economic course by visiting the United States and seeing for himself what the free market can achieve. And, of course, the Iranians ushered in the new era of clashing civilizations by overthrowing the shah and proclaiming an Islamic Republic.

Thirty years later, each of these four events has had far more profound consequences for the United States and the world than the events of 1989. Today it is the Americans who now find themselves in Afghanistan, fighting the sons of the people they once armed. It is the free-market model of Thatcher and Reagan that seems to lie in ruins, in the wake of the biggest financial crisis since the Depression. Meanwhile, Deng’s heirs are rapidly gaining on a sluggish American hyperpower, with Goldman Sachs forecasting that China’s GDP could be the biggest in the world by 2027. Finally, the most terrifying legacy of 1979 remains the radical Islamism that inspires not only Iran’s leaders, but also a complex and only partly visible network of terrorists and terrorist sympathizers around the world.

In short, 1989 was less of a watershed year than 1979. The reverberations of the fall of the Berlin Wall turned out to be much smaller than we had expected at the time. In essence, what happened was that we belatedly saw through the gigantic fraud of Soviet superpower. But the real trends of our time—the rise of China, the radicalization of Islam, and the rise and fall of market fundamentalism—had already been launched a decade earlier. Thirty years on, we are still being swept along by the historic waves of 1979. The Berlin Wall is only one of many relics of the Cold War to have been submerged by them.

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Filed under Afghanistan, Britain, China, economics, energy, Iran, Islam, Middle East, Russia, U.S., USSR, war

by Joel | 7 November 2009 · 8:19 pm

One Child’s Language: at 24 months (and abroad)

Rachel celebrated her birthday in China this year. We used the occasion to invite all of our sophomore class students over to our apartment for tea and snacks. Rachel was overwhelmed. But two people brought cakes (most of which we prevented ourselves and Rachel from eating) and she got to blow out two candles. Shortly after her birthday, she started going to the Number 2 Kindergarten in Shiqi town, Zhongshan City, Guangdong Province. It is about a 10-minutes walk from home, but Rachel can stretch it into 30 or more minutes when she walks home. She examines puddles, ramps, steps, curbs, passing vehicles (especially walking tractors), the chickens in one front yard, and the regulars who wave at her or come out to touch her.

Culture shock: For a long time Rachel would just stick her thumb in her mouth and and ask us to pick her up when anyone else wanted to talk to her or pick her up. She has been subjected to a lot of physical and vocal attention here; we had expected as much. But she has gradually begun to deal with the attention a bit more confidently. After our students assault her, she will ask us “They just want to be Rachel’s friends?” She dodges or brushes aside most passing maulers now, and lets one or two of the more familiar people pick her up. But for the first two months or so, she was in deep culture shock and very fussy and clingy. She still won’t say “thank you” or “good-bye” to anyone in either Chinese or English.

It was as hard for us as it was for her the first day we dropped her off at kindergarten. It was really sink or swim. She had had some setbacks in her toilet-training because of all the travel and stress she went through just before her second birthday. The first week of kindergarten, she wet her pants at least once a day, she wasn’t napping the required three hours [!] each day, and she was clinging pretty close to the principal all day. But now, she talks happily about “Rachel’s new aunties” and “Rachel’s school” (it helps that Mama and Daddy also have a school), rarely comes home with wet clothes, and is almost always in a pleasant, curious, and talkative mood all the way home and into the evening. She enjoys us a lot more when she isn’t with us all day long. She’s had a rough time but she’s grown up a lot in the last two months. She won’t even suck her thumb (considered a vile habit in this dirty environment) while she’s at school anymore. It may get worse, but the terrible twos don’t seem so terrible now that she’s actually two.

Physical development: She is increasingly confident—even reckless—on her feet: running, climbing, jumping, sliding down long slides. She almost has a swagger when she walks by herself. She loves to swim. We’ve been several times to hotel pools and she’s enjoyed leaping or falling off the side into our arms. She has very good control in her hands now. She can put up one finger or two fingers easily, and just recently managed to put up three fingers (the last 3) on the first try. We were all quite proud.

Intellectual notes: She is delightfully curious about all the new things around us, and wants to “see” every noise she hears. She loves to stop and inspect the snails, dragonflies, grasshoppers, and butterflies we encounter in our walks. She has an amazing memory. She can remember exactly where she put something hours ago, can remember what she saw where on a previous walk, and can remember who gave her things. We’ll say “Do you want to walk on the sand?” And she’ll say “Rachel want to walk on sand with Rachel’s new pink shoes from Rachel’s Grandma Grandpa.” She often asks “What’s that from?”—even about the toothpaste.

One of her games is to tell you one thing (“That Winnie Pooh”), then tell you something contradictory (“That not Winnie Pooh”). If you react with appropriate surprise, she will exclaim delightedly, “Rachel tricking Mama!” She can keep it up until you have trouble feigning surprise. Daddy said to her one day, “Rachel’s a talking trickster and a walking tractor.” She adapted that to “Rachel trickster, Rachel tractor, Rachel walking tractor.”

Language notes: Over the past two months, Rachel has been filling in a lot of the unstressed words she hears between the major words: prepositions, pronouns, adverbs, and conjunctions. One week it would be from, the next week with, the next w’out. She hasn’t got the and a figured out, and still uses Rachel instead of I, me, my but her English is more and more grammatical. She has now got the /s/ sound under control, so she distinguishes Rachel and Rachel’s, but she still has trouble with /p, b/ and /k, g/. She also just recently managed to make her Dayto sound a little more like Rayto, but the old habit of saying Dayto will take a while to break. Recently she has been playing with doubling words: “This Rachel Rachel; that Daddy Daddy.” [In retrospect, I think this may have been prompted by Chinese usage in her kindergarten, where she was called Qiuqiu, from her Chinese name Liqiu ‘beautiful autumn’. She was greeted every day like a visiting celebrity, with shouts of Qiuqiu lai le ‘Qiuqiu has come!’—J.] Not much progress in Chinese yet, but she can count from 1 to 5 (sometimes 10) in Chinese, and can follow simple directions at school.

We are amazed by her eagerness to read. She knows all the letters of the alphabet by name. We bought her a little magnetic board with all 26 letters and she plays with it each time she sits on the potty. It makes for some long potty sessions. She’ll keep playing with the letters long after she has done her business. Her demand as soon as she sits down is, “Rachel want to play with these letters,” followed shortly now with “Spell something, spell something.”

UPDATE: This child is now a 24-year-old teacher in Boston’s Chinatown.

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by Joel | 2 October 2009 · 6:09 am

Wordcatcher Tales: Datsu-A Nyuu-Ou vs. Datsu-Bei Nyuu-A

One of the frequent catch-phrases in Japanese foreign policy discussions these days is 脱米入亜 datsu-Bei nyuu-A ‘leave America join Asia’, one of many trial balloons floated by the new DPJ-led government. This phrase (r)evokes an older formulation attributed to one of the most avid Westernizers of the Meiji era, Fukuzawa Yukichi, who must hold the world record in Sinographic neologism. (One of the neologisms sometimes attributed to him is minshuushugi [people-master-ism] ‘democracy’.) His policy prescription for Japan in the late 19th century was 脱亜入欧 datsu-A nyuu-Ou ‘leave Asia join Europe’.

How feasible for Japan is 脱米入亜 datsu-Bei nyuu-A ‘leave America join Asia’? Kyushu-based blogger Ampontan is translating and hosting a series of columns by Shimojo Masao, one of Japan’s top specialists on Korea (whose second language is Korean), who weighs in on the issue. Here is Ampontan’s translation of Shimojo’s first column, in its entirety.

The Preconditions for an East Asian Entity

There has been a change of government in Japan for the first time in half a century, and a Democratic Party of Japan administration has taken power under the leadership of Hatoyama Yukio. Among his policy initiatives, the concept of an East Asian entity or community similar to the European Union is receiving widespread attention. The alliance with the United States has been the cornerstone of international relations for Japan since the Liberal Democratic Party came to power. People are discussing whether the change of government might mean Japan has chosen to turn away from the U.S. and place a greater emphasis on Asia.

A full understanding of the distinctive historical characteristics of East Asia is required before embarking on such a course, however. While Japan, the Korean Peninsula, and China on the continent are close geographically, the history of their social systems is different. They have less in common than the members of the European Union, which had shared Christian beliefs and intermarriage of the ruling classes.

In Japan’s case, a social system that incorporated regional authority was formed after the establishment of the Kamakura Shogunate in the 12th century, and the foundation of a market economy was created. That is why Japan, with a system closely resembling capitalism, was quickly receptive to Western civilization after the Opium War of 1840.

In contrast, a system of centralized authority was maintained in China and on the Korean Peninsula despite the arrival of modernization. For many years, they had what amounted to planned economies. The history of Japan vis-à-vis China and the Korean Peninsula is that of relationships similar to the one between the United States and the Soviet Union during the Cold War.

The achievement of an East Asian entity depends on whether Prime Minister Hatoyama is possessed of the awareness of those historical differences and the insight to perceive what is necessary to overcome them.

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by Joel | 1 October 2009 · 5:31 pm

American Independence & Chinese Silver Imports

The June 2009 issue of Journal of World History has an enlightening bit of historical revisionism by Alejandra Irigoin entitled The End of a Silver Era: The Consequences of the Breakdown of the Spanish Peso Standard in China and the United States, 1780s–1850s (Project MUSE subscription required). Here are her conclusions (pp. 238-239).

This article argues for revision of traditional views of the global silver trade with China in the late eighteenth and early nineteenth centuries. Section I shows that the existing historiography tends to ignore that silver imports into China continued for longer than normally acknowledged and at increased levels up to the 1820s. New evidence shows that the structure of the silver trade changed substantially when US merchants became central intermediaries between Spanish American silver “producers” and Chinese “consumers,” when Chinese imports of silver consisted increasingly of Spanish American coins, the so-called pillar and bust dollars.

Section II explores the role of Americans as intermediaries who increased trade with Spanish America in order to obtain silver coins needed to trade with China. The timing of the flow of silver out of China to pay for opium purchases is challenged, as is opium as a cause for the desilverization of China. This article also questions received wisdom that reduction in the supply of silver owing to Spanish American independence was the root cause of silver scarcity in China in the early nineteenth century. This received wisdom ignores a fundamental fact: Spanish America itself was a significant reservoir of silver coins in the world. Thus, (relatively minor) interruptions in the production of silver—at different points in time and in distinct places—in South America during Independence were unlikely to account for supply shortages in China, and continued exports of silver into the United States confirm this view. Hence, the fall in Chinese silver imports must be a function of demand-side forces in addition to supply-side problems.

Spanish American independence presented a different problem to the global economy. The Spanish Empire broke up into a multitude of distinct states in the wake of independence, each fiscally and monetarily autonomous. In other words, the largest monetary union of the premodern world had collapsed. The resulting fragmentation of coinage and seigniorage across postindependent Spanish America terminated a silver standard that had organized international trade throughout the early modern world, East and West and in between. New republican governments, especially in regions with silver endowments, took over mint houses in the service of local and regional interests. Coins minted in various mint houses began to diverge in quality and fineness, whereupon the universal standard of the Spanish silver peso was definitively lost.

Section IV advances the central argument of this paper, namely that Chinese demand for silver, at least since the late eighteenth century, involved demand for a certified and reliable means of payment, as opposed to silver in some generic sense. “Good” colonial Spanish American coins traded at a premium over the sycee [ingot] equivalent, clearly confirming this point. Fragmentation of the Spanish monetary standard after independence had a devastating influence on Chinese demand. The impact of Spanish American independence on China’s economy operated through deterioration of coin quality, not through quantities of silver per se. By contrast, the United States used Spanish dollars as legal tender under the control of central monetary authorities, thereby succeeding in keeping new peso coins in circulation for a decade or more.

The end of the silver standard following independence in Spanish America during the 1810s and the 1820s had major consequences for development of the global economy before the gold standard. On one hand, termination of the silver era contributed to the poor economic performance of the Chinese economy. A lack of high-quality, reliable Spanish pesos between the 1820s and the 1850s, rather than insufficient silver mining, largely explains the fall in Chinese silver imports. Hence, I argue that the Chinese silver trade in these decades was demand-side rather than supply-side (mining) driven. Consequences for the internal market in China were manifold, including increased transaction costs, fragmentation of markets, and credit shortages. On the other hand, the United States reacted differently—and with a different timing—to termination of the silver standard. Immediate detrimental effects were weathered by workings of a well-integrated banking system, a quasi–monetary authority, and assay by the mint. Ultimately, this article poses an important comparative question for economic historians: in light of the US response, why did the Chinese empire never monopolize seigniorage, and why did it fail to provide reliable control of its currency system in the face of high costs for the domestic Chinese economy? Answers fall well beyond the scope of this article, of course, but the question should at least be framed in a global context.

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Filed under China, economics, Latin America, opium, Spain, U.S.

by Joel | 14 September 2009 · 8:18 pm

Zhao Ziyang on Deficit Financing

From Prisoner of the State: The Secret Journal of Premier Zhao Ziyang, trans. by Bao Pu and Renee Chiang (Simon & Shuster, 2009), Kindle Loc. 2059-88:

After the Third Plenum of the 11th Central Committee, our country’s financial revenue gradually declined in proportion to the gross national product, while expenditures steadily increased, thus resulting in a deficit. This was the price we had to pay; it was normal and solvable. In 1984, I began proposing a gradual raising of the revenue-to-GNP ratio. To reduce the deficit, we temporarily scaled back infrastructure construction and reduced the pace of economic development. There was no other choice.

If we had ignored the situation and launched an “all-out fast-paced campaign,” we would have faced seriously high inflation and put greater strains on farmers and workers. The readjustments in 1979 and 1980 and again in 1981 had been necessary. As a result of the 1981 readjustments, the agricultural sector continued to enjoy big harvests, the market continued to prosper, and the nation’s economy showed no negative growth. On the contrary, the economy grew by an annual rate of 4 percent. And as the readjustment deepened in 1981, growth increased. The growth rate in the first quarter was relatively low, the second quarter was better, the third quarter was higher, and the fourth quarter was significantly higher. This proves the readjustment was good and the economy had recovered.

Here’s how we kept the economy growing: by scaling back infrastructure projects and reducing heavy industry, iron and steel production, and machinery production; by expanding light industries such as consumer products and textiles while allowing and encouraging private businesses; by developing service industries. The cities continued to prosper and living standards continued to rise. Employment rates rose. In the end we achieved a balanced budget and the people were generally more satisfied. That said, the policy had its shortcomings. We still hadn’t entirely corrected the traditional way in which the Planning Commission cut back on infrastructure projects, which was to “cut straight across the board.” With the old system still in place, it was hard not to do so, and so we set quotas for each region.

In order to save projects that really should not be cut, however, I asked the Planning Commission to be flexible with a part of the budget so that we could revive some of these projects. After the general spending reduction, we reviewed which cuts would incur too great a loss, or which projects were so beneficial they should continue. Of course, there could not be a large number of exceptions, but we were able to reduce the negative impact of “cutting straight across the board.”

Still, in retrospect, the readjustment was too severe. We should have made exceptions for all projects where equipment had already been received or was urgently needed and could be installed and put into production quickly. This would have been more cost effective, particularly if you consider the cost of storage. Even though some of these projects resumed a year later, time and money was wasted. Some of the projects took years to recover.

The reason we didn’t take more flexible measures was mainly because we lacked sufficient domestic funds to pay for these projects; the deficit needed to be reduced so that a financial balance could be achieved. It was all too mechanical.

For example, if the deficit had not been eliminated immediately and some of the budget had been spent on worthwhile projects, the investment could have been returned in a year or so. And under the open-door policy, we could have resolved the problem by taking out more foreign loans.

But Chen Yun was concerned and firmly insistent. He was afraid of excessive and overly large projects and insisted on the reductions. At the time, there were things we didn’t clearly understand, since we did not have enough experience.

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by Joel | 14 September 2009 · 7:54 pm

Zhao Ziyang on China’s Agricultural Revolution

From Prisoner of the State: The Secret Journal of Premier Zhao Ziyang, trans. by Bao Pu and Renee Chiang (Simon & Shuster, 2009), Kindle Loc. 2040-59:

After the Third Plenum of the 11th Central Committee, there were good harvests several years in a row: 1979, 1980, 1981, 1982, 1983, and 1984. The rural areas experienced a new prosperity, in large part because we resolved the issue of “those who farm will have land” by implementing a “rural land contract” policy. The old situation, where farmers were employees of a production team, had changed; farmers began to plant for themselves.

The rural energy that was unleashed in those years was magical, beyond what anyone could have imagined. A problem thought to be unsolvable had worked itself out in just a few years’ time. The food situation that was once so grave had turned into a situation where, by 1984, farmers actually had more grain than they could sell. The state grain storehouses were stacked full from the annual procurement program.

Two other factors contributed to the change. One was the elevated price of agricultural products. Farmers could make a profit from farming. The other was the reduction in the quotas for mandatory state procurement, which meant taking less food out of the mouths of farmers.

For more than two decades, farmers had not had enough to eat after handing over the grains they had produced to the state after every harvest. Of course, the reason that we were able to introduce this new policy was because the Third Plenum of the 11th Central Committee had decided that China could import grains. Comrade Chen Yun said the imports were allowed so that industrial crops could be preserved, but in fact, the imports fulfilled urban consumption demands, thereby reducing the rural mandatory procurement quota [purchased in part for urban markets]. The quantity of grain imports was huge in those years, between 10 million and 20 million tons. Major grain-producing regions could sell their surplus at a higher price and make a profit. Together, all of this gave rural areas instant prosperity.

These policy implementations came at a cost. While the prices of agricultural products had gone up, urban food prices could not be immediately raised, since urban workers had limited purchasing power. Therefore we had to finance additional subsidies for agricultural and other rural products. At the same time, foreign currency was needed to import grains, which affected the import of machinery. Plus, urban housing needed to be expanded. And since factories now had more autonomy, the wages and bonuses of the workers were raised. All of this involved additional expenditure. But these things all were part of the recovery process, which paved the way for the good situation of later years.

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by Joel | 14 September 2009 · 6:08 am

Zhao Ziyang on the “Birdcage Economic Model”

From Prisoner of the State: The Secret Journal of Premier Zhao Ziyang, trans. by Bao Pu and Renee Chiang (Simon & Shuster, 2009), Kindle Loc. 2442-56:

Comrade Hu Yaobang was similarly unenthusiastic about the planned economy. According to my observations, he believed it was the highly concentrated top-down planning model that had limited people’s motivation and creativity and restricted self-initiative at the enterprise and local levels. He believed that building a socialist society entailed allowing people, enterprises, and local governments to act independently, while the state continued to direct and mobilize them with social campaigns.

Chen Yun and Li Xiannian, however, emphasized the importance of a planned economy, especially Chen Yun, whose views had not changed since the 1950s. He included the phrase “planned economy as primary, market adjustments as auxiliary” in every speech he gave. The tone of his speeches didn’t change even after reforms were well under way. His view was that dealing with the economy was like raising birds: you cannot hold the birds too tightly, or else they will suffocate, but nor can you let them free, since they will fly away, so the best way is to raise them in a cage. This is the basic idea behind his well-known “Birdcage Economic Model.” He not only believed that China’s first Five-Year Plan was a success, but also, until the end of the 1980s, he believed that a planned economy had transformed the Soviet Union in a few decades from an underdeveloped nation into a powerful one, second only to the United States. He saw this as proof that economic planning could be successful. He believed that the reason China had not done well under a planned economy was mainly the disruption caused by Mao’s policies, compounded by the destructive Cultural Revolution. If things had proceeded as they had in the first Five-Year Plan, the results would have been very positive. In terms of foreign affairs, Chen Yun retained a deep-rooted admiration for the Soviet Union and a distrust of the United States. His outlook was very different from that of Deng Xiaoping, and there was friction between the two.

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