China Boom CMS

<p>So, many Chinese companies like, for example, the Baoshan Steel Corporation in Shanghai, now have maybe 75% of their shares owned by the State, but another maybe 10% are owned by other legal persons, namely other institutions, maybe another bank, like the Communications Bank. And maybe another 10% are owned by other individual shareholders like me. We just buy it [stock] in the stock market. So, this corporatization was a major experiment. I think, by now, maybe more than half of state-owned enterprises have been corporatized. They have a board of directors and some of them are listed on the Shanghai and Shenzhen Stock Market. And I think this kind of corporatization is still going on today. But, since 1995, I think there's another trend, which is just outright privatization of many state-owned enterprises, especially at the city and provincial level. So, [the trend is] not to try the responsibility system or corporatization. Just privatize them, sell them to private entrepreneurs. So, this is a very big change since the middle of the '90s and it is very controversial, of course, 60 million to 80 million traditional state-owned enterprise workers have been, essentially, kind of fired. We do not use this word, and they have some kind of severance payment, but this large scale restructuring, privatization, in the local level state-owned enterprises and the accompanying transformation of this labor force in the traditional state-owned sector is a huge social transformation. I mean, it is very controversial to this day. If you think about it, actually, it would be very difficult for it to be done in many other countries because, [in the] whole process, 80 million people in the state-owned sector at the provincial level essentially lost their jobs.</p> <p>For China, in terms of economy, it's very interesting. I think it's a mixed economy. A mixed economy in the sense of coexistence of public owned enterprises and public owned assests and resources and huge amounts of private owned enterprises. So, how should I say it, this coexistence, because the public owned enterprises and assets are still quite significant. Because people at the central government level, because as I said, the privatization mostly occurred at the provincial and the city level, but at the central government level, the major enterprises, like China Telecom, and PetroChina , the major oil company, and there are about 160 [other] SOEs under central government control that are still alive, and performing very well actually, making huge profits. And also the four major state owned banks, China Construction Bank, China Commercial and Investment Bank, the Agricultural Bank, and the Bank of China, those four major banks are corporatized. They are--the Bank of China has strategic investors, like the Bank of America. But China's central government owns them, more than 80% of the shares. Of course, the public ownership of all the land in the cities, and the collective ownership of the land, by whole villages in the Chinese countryside, it means that public and collective ownership are still very significant in the Chinese economy. But at the same time, the private economy is also very very significant.</p>

<p>It is a change from nature to the concrete, a cement-like feeling of change. How do I describe it? Maybe that feeling is my visceral reaction to the material. I used to live alongside nature. When I was small, I grew up in an area where the city and countryside met, so I did have a feeling of the city, however the city was a village/township type of city, the type you find in Jiangnan (a region in the lower Yangtze Valley). There were a lot of traditional and very beautiful cities and towns. And at that time, the children were not as coddled as they are today, you could boldly, with peace of mind, just let them run loose in the fields and play in groups and allow them to become closely intertwined with nature. So, I'll tell you why 1995 had such a big impact on me. I suddenly felt that after 1995, there were a lot of steel-reinforced concrete things. Before, our buildings were primarily wooden, with a few made of concrete. Afterwards, I discovered that the materials being used in buildings were changing. It was a very easily perceived change. It has a very direct impact on the individual development of children. I feel that before, there were a lot of things that you could become one with but, from 1995 onwards, or after modernization started, you can feel a distance between the materials and people. The thing that you are facing is probably your object, but it isn't a thing of your own. Using a philosophical phrase, in the beginning, humans and nature were almost one, however, later on, there developed a feeling of &quot;objects&quot;. You have a feeling that, &quot;The world is like this and I am like this, I need to get to know the world.&quot; This type of process develops. So, the memories that are transferred from childhood to adolescence to youth are totally different. In some aspects, the feeling is very directly perceivable. And later, this permeates into the heart, resulting in a special experience and understanding.</p>

<p>Deng Xiaoping said that the policies of the Reform and Opening would not change within 100 years. It has only been 30 years up to this point. I believe that after at least this 100 years has passed, we can again discuss future development. I am confident that things are only going to get better and better, because so long as a person's lifestyle or regime has reached a certain level, it is impossible to make them accept anything less. If people normally eat good food at dinner and you want to make them regress to a very basic lifestyle, no person will be willing to do this, to say nothing of a whole country. I think the reform and opening policy is correct and is really consistent with China's present and future development. It also is consistent with the people&rsquo;s will and the trend of world economic development. I became Mayor in late 2002. Since 2002, our local fiscal revenue has gone up 337% and the per capita incomes of urban and rural residents have increased by 49.8% and 67.6% respectively. There is no way that this trend of development could be stopped by whomever is Mayor. Because it has already embedded itself deeply in the hearts of the people: If you don't develop, you will become backwards. If you don't work hard, you will fall behind the others. So, China has already created a development situation where people are eager to develop and afraid to be left behind. At the same time, we are very aware of environmental problems. We cannot sacrifice the interests of future generations for economic development today. Every year, we, in accordance with the developmental goals and assessment criteria of the central government and Sichuan Province, scientifically plan the design of our industrial development in order to instructively motivate sensible layouts for enterprises, in order to mitigate the risk of any pollution that may be created by the development of these enterprises harming future generations. Environmental performance has been directly integrated into the criteria for evaluating the performance of a mayor. If any serious environmental incident occurred, I would absolutely be the first person to be removed from my post. I bear the utmost responsibility for protecting the environment in our city. Overall, we recognized that a win-win situation is essential to our development. I have confidence, and 590,000 citizens have confidence, in the future of reform and opening in our country.</p>

<p>Personally, after 1989, I really didn't imagine that China would still have the kind of the development that it had later on. I think that one of the most important events of the period was what was then called Deng Xiaoping's &quot;Southern Tour&quot; and the famous speech he made. He renewed the reform in 1992. I think that it was an extremely important historical event because he directed the ship of reform back onto its original track, and reform continued even faster than before. At the time, Deng Xiaoping raised an important perspective: &quot;It doesn't matter whether you follow socialism or capitalism.&quot; He restated the black cat/white cat philosophy. The standard by which he would evaluate [an ideology] was whether or not the economy could develop. He thought that economic development would really solve the problem of legitimacy. After that, China was on the reform track again, and I feel that reform happened faster than before. Because reform is an accelerating process, as soon as it starts, it will move faster and faster. So, I think the restarting of reform in 1992 was very important. After the revival of the reform in 1992, China made a few things explicit. What were these things? In the 1980s, it was Reform and Opening. In 1992, after the revival of the reform, China several things explicit. First of all, the reform would come in the form of market economy. This was important because this economic model was used by Western nations, and it came with the comprehensive experience accumulated over hundreds of years. It was unlike the reform of the 80s, which was mainly about opening, contracting, and experimenting with various models. But, all along, it was &quot;open, open, decentralize.&quot; They thought about that part the most. However, with regard to creating a new system, if you want to give up the past and you are ready to propose something with an unclear vision, the prospects will be unclear. They only explicitly proposed a vision in October of 1992, and that vision was to have a market economy. So, the West attentively said, &quot;Don't you mean a socialist market economy? You need to add 'socialist' at the beginning.&quot; But, don't forget, the word socialism was already in use, but it was the first time that the concept of market economy was proposed and employed by the central government. The market economy, in itself, has its own definitions and explanations; this is really mainstream economics, it has a complete set of definitions and rules. What is a market economy actually? What sort of laws of operation does it have? It has a complete experience and summary. But we continue to see it develop. But, they adopted this, so it's entirely different. Secondly, they decided to build a framework for the market economy. At the end of 1993, the Communist Party held the Third Plenary Session of the 14th Central Committee and this meeting was held to set up the framework for market economy. What does this framework include? Let us recount. In the 80s, much of the reform was expressed in bottom-up efforts. For example, all industries had contracts and privately-run enterprises started to appear, this was bottom-up. Also, state owned enterprises, through contracting, or through the policy of separating politics from enterprise management, and various other methods, reformed. Also, there was what we then called &quot;untying the enterprises,&quot; rural township and village enterprises, the establishment of joint enterprises, and so forth. After '92, these bottom-up reform efforts continued, but, at the same time, they established a framework for market economy -- this signifies the public financial system, taxation system, and the financial and banking system. The financial system reform was major, it included the separation of the commercial banks and the policy banks and, at the same time, there was a clear-cut goal to, step by step, make the central bank independent in the future. Although, even now, the central bank isn't independent, its effectiveness has definitely become increasingly striking. These reforms were top-down, they were only possible with government action. Otherwise, they could not have been done and there would not have been a framework change. This happened at the end of 1993. After [framework reform] was realized, it propelled the reform process forwards, but this was more obvious in '92, or the end of '93.</p>

<p>2008 was really a remarkable year for all this, because it&rsquo;s the first time where, in an unmediated setting, we have Chinese netizens and American or other Western, Anglophone netizens encountering each other. Enough Chinese-speakers now, enough bridge bloggers, enough Western media where there&rsquo;s room for comments, that in these comment threads, there are these really vicious battles going on between what I call the Rednecks and the Red Guards. They&rsquo;re standing nose to virtual nose, for the first time, and seeing anything but eye to eye on all these issues. There&rsquo;s a gaping chasm between the way that they see things and, in 2008, with the Tibet protests, and with the torch relay, and all the problems that the torch relay had in various Western cities that it went through, and, of course, the Olympics itself. It got really, really ugly. It got very, very ugly, and there&rsquo;s this assumption on the part of the Westerners that any time they see defense of China, that it&rsquo;s necessarily the product of brainwashing by the Chinese educational system, or it&rsquo;s these so-called 50 cent, (<i>wumao dang</i>) Party-paid posters who are given 50 Chinese cents for every pro-China post they put up there. This happens, I don&rsquo;t say that it doesn&rsquo;t happen, I&rsquo;m sure that it does happen, but it&rsquo;s certainly not as widespread as they imagine. And what this has its roots in is, and I&rsquo;m sure you&rsquo;ve seen this before in your travels here, but every time there&rsquo;s a big flare-up, whether it&rsquo;s about Tibet or any other human rights issue, people are astonished that these seemingly Westernized, cosmopolitan, quite liberal-minded Chinese, who may have been educated abroad, who may have, or may be, living or working abroad, who have American friends, who watch American movies and film and television, how these seemingly cosmopolitan people can still have, within that worldview, this rabid strain of nationalism. That&rsquo;s one thing that I think needs to be understood in an historical context. Liberalism and nationalism in China developed very much in lockstep, with the former serving the latter. People embraced classical liberalism at the end of the 19th and in the early part of the 20th century, not because it was seen as a noble end in itself, the end of history, but because that was perceived as the way that Western powers had become rich and powerful. And so, the liberal worldview was always in the service of nationalist ends. And that remains true to this day. People accept the inequalities visited on China by capitalism because it is creating wealth, it&rsquo;s making China stronger, it's not seen as an end in itself. So, that explains this seeming paradox in the worldview of so many of these Chinese people.</p>

<p>Now, we say that China is only African. We save China. Because, I think that some of their products are not being bought much by the Europeans and Americans. Now, the Chinese are getting most of their raw materials, such as mineral resources, from Africa, And China is moving very fast because of their population and also the system of their government. They support their people. Most of them go to Africa to know what they can do to get what you have. So, they go to Africa to do something, and they receive something in return. I'm not against that, because Europeans, the English, and Americans, have come to Africa as well. But, today, Africa is growing because the Chinese are coming to African markets. They see what they need, they take what they need and, in return, they give Africa what it needs. So, I believe that even in 20 or 40 years, China will still be dealing with Africa, because only Africa can save China. And that is why I am fighting for our relationship to become even better.</p>

<p>There is a social theorist named Giovanni Arrighi, he is teaching at Johns Hopkins. He has a book that was recently published; the title is very interesting, it is &ldquo;Adam Smith in Beijing.&rdquo; And he says Western Europe benefited from China and India in the past, benefited from the world system centered in Asia in the last millennium. But, now, the current world system is built and protected by America that China is part of this system. China benefits from this system. I think he&rsquo;s very right, he&rsquo;s a true thinker on that. He realizes, not a single country can escape from globalization, it&rsquo;s a fact you have to take. Now of course, it&rsquo;s upon yourself [to decide] how to utilize the chances and opportunities that presented by globalization, and China, somehow, has taken full advantage of this round of globalization. So, my opinion is that China benefits from the current world system, and the US and China, the world, is in the same boat. I do not like the idea of delinking China from the world system. Of course, there&rsquo;s a strong voice in China trying to say that China should delink from the world system. I think that&rsquo;s a very short-sighted view.</p>