Chinese Business Under Socialism: The Politics of Domestic Commerce, 1949-1980

386 Pages·1984·6.079 MB·English

by  Dorothy J. Solinger

CHINESE BUSINESS UNDER SOCIALISM
This volume is sponsored by
THE CENTER FOR CHINESE STUDIES
University of California, Berkeley
Chinese
Business Under
Socialism
The Politics of
,
Domestic Commerce
1949-1980
Dorothy J. Solinger
University of California Press
Berkeley Los Angeles London
University of California Press
Berkeley and Los Angeles, California
University of California Press, Ltd.
London, England
©1984 by
The Regents of the University of California
Printed in the United States of America
1 2 3 4 5 6 7 8 9
Library of Congress Cataloging in Publication Data
Solinger, Dorothy J.
Chinese business under socialism.
Bibliography: p.
Includes index.
1. China—Commercial policy. 2. Socialism—China,
b Title.
HF1604.S64 1984 381'.3'0951 83-17930
ISBN 0-520-04975-6
CONTENTS
List of Figures and Tables vii
Acknowledgments ix
List of Abbreviations xiii
Introduction 1
PART ONE :
The Framework for Commerce
in the People’s Republic
1. The Planned Economy and Competition for Goods 11
2. Policy Conflict in Chinese Commerce, 1949-1979 60
3. Technological Underdevelopment: A Case Study of
Corruption in the Southwest Countryside, 1949-1952 124
PART TWO:
The Three Central Issues in Commercial
Policy in China
4. The Private Sector: The Regulation of Small Rural Traders 157
5. Commerce and Industry: Strains and Models 206
6. Commerce and Agriculture: Fights over “Free” Markets 243
vi CONTENTS
CONCLUSION:
The Pattern, Shape, and Dilemmas of Chinese
Business under Socialism 297
Appendix A: Rationing 305
Appendix B: A Comparison of the Organizational Outcomes
of the Socialist Transformation Campaign in
Various Economic Sectors ' 307
Appendix C: Forms and Procedures in the Transformation of
Wholesale and Large Retail Trade 313
Appendix D : Forms and Procedures in the Transformation of
Small Retail Trade 319
Appendix E: Vicissitudes of Socialist Commerce, 1950-1980 325
Appendix F: Prices for Items of Daily Life in Six Provinces,
Early 1975 327
Appendix G: Ministers of Commerce, 1949-1982: Relevant
Biographical Data 328
Glossary 331
Bibliography 337
Index 351
FIGURES AND TABLES
FIGURES
1. The Organization of a State General Goods Company 3 7
2. Organization of a District-Level Commercial Bureau 39
3. Hierarchy of Authority for and Organization of a Beijing
Hardware Shop 40
TABLES
1. A Sampling of Shops Outside the Usual Commercial System
Channels in Three Cities (Changsha, Guilin, Guangzhou) 43
2. Three Tendencies and Commercial Policy: Selected Issues 71
3. Highlights in the History of Commerce in the PRC,
1949-1980 87
4. Six Episodes of Conflict over Commercial Policy,
1955-1978 121
5. The Situation in the Transformation of Privately Operated
Commerce, 1956 191
6. Numbers of Private Individual Laborers and Collective
Private Firms, Selected Areas and Years, 1953-1981 194
7. Three Tendencies and Disagreements over the Effects
of Fairs 266
B-l. Comparison of Socialist Transformation in Industry and
Commerce, 1955-1956 309
VII

ACKNOWLEDGMENTS
It is now some six years since I first noticed that my fascination with
the phenomenon the Chinese call “socialist commerce” was taking me
beyond the scope of an article-length study. In these six years I have
watched the Chinese leadership experiment with forms of trading that
touched on practices more typically connected with capitalism; I have
also seen these leaders return, in time, to the structures and procedures
long in place. This book delineates the system formed by those struc­
tures and procedures and details the politics that surround it.
This critical feature of economic and social life in the People’s Repub­
lic has, oddly enough, received scant scholarly attention until now.
Thus, the present study should address an important need, for surely the
procurement and the distribution of the goods of daily use affects every
resident of the country. An array of issues revolve around the market in
this poor and populous nation as its political elite strains to realize a
socialist society. These range from the basic matter of living standards to
the distribution of economic power among various social groups and
classes to the more theoretical question whether buying and selling is
appropriate in a genuinely socialist setting.
My own journey through thirty years of Chinese commercial policy
and politics has satisfied me that I now understand the substance of the
phrase “socialist commerce,” that I grasp how it works, and that I have
found a framework to explain the forces that shape it. I hope this book,
the product of my journey, will clarify for others the nature of this com-
X ACKNOWLEDGMENTS
mercial system. It aims to do so through analyzing the effect on the sys­
tem of three key factors: the socialist planned economy, political conflict
among a socialist elite, and technological underdevelopment.
A number of people have helped me by reading and commenting on
individual chapters, and I have tried to take their remarks into account in
my revisions. They are David Bachman, Susan Mann, Richard Curt
Kraus, Nicholas Lardy, Ramon Myers, Michel Oksenberg, William
Parish, Donald Sutton, Steven Thorpe, Peter Van Ness, Andrew Wälder,
Carl Walter, and Fred Whelan. I appreciate very much their good advice.
In addition, four others each gave the manuscript as a whole a careful
and thorough reading, and offered a number of thoughtful suggestions,
both editorial and substantive. Here I must thank Charles E. Lindblom,
Mark Seiden, Susan Shirk, and Vivienne Shue. Mark’s efforts in particu­
lar went far beyond the usual duties of a reader for the Press, as he noted
from one to as many as six critical comments or questions on almost
every page. His and Susan’s probing queries challenged some of my basic
assumptions, forcing me to rethink my approach toward a number of
central issues raised by this study. Charles Lindblom’s remarks helped
me to put some of my ideas into a larger, more comparative perspective,
and Vivienne raised valuable points about the structure of individual
chapters. I feel very fortunate that all four of these people gave me the
benefit of their insights and of their time.
Two individuals named above contributed to this work in ways other
than simply by criticizing the written page, each during a different phase
of the work. Richard C. Kraus was an invaluable colleague in the early
years, when I first conceived the study and as my ideas initially began to
take shape. His interest helped to spark my enthusiasm as we discussed
the thoughts I formed while reading the Chinese press and as he recom­
mended references. My bibliography and my understanding of the Chi­
nese political system are both much richer because of his friendship then.
At a later stage, after I had begun to write the book, the sharp edito­
rial eye of Ramon Myers enabled me to pick out the patterns in the mate­
rial I was describing and so to give structure to the presentation. It is
difficult to underline adequately the significance of his help in honing
the analysis and clarifying the overall argument. Both Dick and Ramon,
each at different times, also gave me the kind of support and encourage­
ment that continually shores up one’s conviction that the job is worth the
effort. For their company in this labor, many thanks.
Gordon Bennett, John Wilson Lewis, Evelyn Sakakida Rawski,
Thomas G. Rawski, Alberta Sbragia, and Donald Sutton each helped by