Time Traveling in China

10月1日是共产党革命的60周年，当时中国有效地孤立国际贸易。刚刚在30周年之后，回到1979年，我首次向中国旅行，几个月后的政治自由化后几个月被称为“北京春天”。我在那里参加了明星广交会的就职会议，一个开创性外国高管的场地，以在他们的名字中以数字的数字，如无线电工厂＃5在中国公司的同行。我记得的世界不再存在。

At the time, not just language but custom and economic incentives separated China from the outside commercial world. In the early 1980s, I worked with one of southern China’s largest newspapers. I asked the editor to increase the print run to accommodate the overflow of foreign advertising. He refused, citing his annual allocation of paper: If he increased his order that year and the ads dried up the following one, he would be in trouble. Besides, because all media in China were state-owned, the extra revenue didn’t mean anything to him. It would simply disappear down a black hole.

除了中国人之外，中国共产主义已被每个人宣布死亡。该国的经济仍然由非常大的国有企业主导。这些公司与之前的社会责任没有相同的社会责任 - 维持就业并提供医疗保健和退休福利 - 他们能够筹集大量资金在中国和国外的股票交易所。但所有这一切并不意味着中国已经变成了一个真正的市场驱动的经济。全球经济衰退几乎掌握了私有化努力。有一种Schadenfreude的感觉，为保守派的目的很好地提供服务。

The true difference in China today, and much of its economic hope, lies in the tens of millions of small and medium-size enterprises that have sprung up over the past 30 years. These companies have been steadily moving up both the value and quality chains. Their efforts have put China at the center of world manufacturing. They are innovators, engines of growth and, not coincidentally, major job creators. Unfortunately, the recession has been harder on them than on the country’s large companies. Small enterprises are shutting down, resulting in socially destabilizing job losses. Exporters are bending over backward to keep their foreign customers, offering open terms of trade rather than demanding letters of credit from them.

A few trends and flash points: Although Western governments have thwarted efforts by China’s largest companies to invest abroad, smaller firms and individuals, able to fly under the radar, are on a buying binge in the U.S. and elsewhere. The regional inequality resulting from decades of foreign investment along China’s seaboard presents an opportunity for foreign firms willing to invest in the interior. Today’s management talent is impressive but less loyal, giving lip service to nationalism while walking the path of self-interest — a bullish sign for consumption down the road. Market information is still hard to get, and when it is obtained outside the law, the consequences are extreme, as evidenced by the government’s incarceration of executives of Australian mining firm Rio Tinto on espionage charges.

As an old friend, my advice to China is: Don’t let the current recession hamper reform. Work toward making the yuan fully tradable on the world’s currency markets, opening the capital account to allow citizens to invest abroad and allowing free and unfettered access to information so that China’s software is up to the level of its infrastructure.

All that said, there is no country on earth that has witnessed so much change over such a short period. It is a privilege to have witnessed it.

Lyric Hughes Hale is the founding publisher of China Online.

See related article, "China Wants to Reshape the International Financial System".