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Permalink 04:24:55 pm, by Kaidong Email , 1834 words   English (GB)
Categories: Uncategorized




To know the things of shame is to be near to fortitude.

                                                          -------- Confucius


The 8th May of 1999, could be a common and ordinary day of history, as what it has been to most people in the world. But if the super power of China, as exaggerated by journalists, observers and reviewers in the western world intentionally and especial recently, comes to be true, this date shall be recorded retrospectively with remarkably significance.


In the morning of that day, employees from the FAW (the First Automobile Works) and the Chery were awoken by alarms. These two were totally different automobile makers, say, the front one was the largest incumbent inheriting from the lcentral planning era and now depending on foreign technology while the latter one was small new entrant even without governmental license at that time and implemented technological development indigenously. But on this day, their people were called on to do the similar thing. They rushed to public squares nearby, as well as what people irom thousands of manufacturing plants around the whole country did at that time – whether these plants were state-owned or private-owned. Some factory girls sob; but solemn and stirring speeches were given by factory leaders and voluntary speakers; the mass roared “industry for national salvation”. In cities, massive people rushed from the early morning to the embassies of U.S. and other NATO countries, or the places of large western MNCs. The wave of protest maintained for over one week.

Beneath the surface of the angry waves, a group of people were called on  from different cities to Beijing, namely political decision-makers, industrial leaders, economic planners, etc. They got highly uniform in very short time for some issues which had even been debated for long, and started up corresponding actions. For the outcomes of these decisions, we may have noticed from news about China’s achievements in the past ten years – if with sufficient sensitiveness. Some have been demonstrated publicly at important ceremonies, such as those on the Tiananmen Square on the 1st October of 2009.


Several hours before the above scenes, namely 5 am of the Beijing Time, the China’s embassy in Belgrade was bombed with 5 GPS-guided JDAMs from a B-2 belonging to the air force of U.S.. Three Chinese were killed in sleep while dozens wounded.


We do not really know how the decision was produced by the U.S. or NATO. What they claimed as the B-2 using an outdated wrong map was obviously a cloak and bullshit. And we even don’t care it today. Since after being humiliated and being detected for the strategic underscore, China has been changed, at least disruptively from its previous trajectory, so have many Chinese people.


Looking backwards by by ten years earlier, in 1989 a political movement in fact divided the country. The social cohesion, brought up by the process of building socialism, was destroyed. In the whole 1990s, the key words of Chinese social-economic development could be represented as, associated with nominal fast economic growth, the investment bubble, the actual privatization, the bankrupt of SOEs, the decay of social trust and the unexpected tide of unemployment. During the second half of 1990s, by roughly estimated, there were 30-40 million industrial workers from SOEs got “XiaGang” – in most cases meant real unemployed. The traditional heavy industry base, namely the NorthEast China, was the harder-hit area. Under such circumstances, the self confidence and the cohesion of Chinese society were sharply decreased. The American style of social and economic operation was absolutely the ideal model of reform held by many Chinese intellectuals and reformers. Technically, Chinese economic planners laid off, to "the invisible hand", its governmental industrial system and R&D system. Even though the industrial reform started from the mid-1980s, the real massive privatization happened in the 1990s. And from 1998 a largest and the final reform of governmental R&D system was implemented, by which meant they would not get governmental funds as before. Only in 1998, there were 248 institutes were given up.


But the strike from Belgrade ignited the whole country, and shocked Chinese elites. In a word, going through the two decades' reform, China might not be a real socialism country anymore, but this strike totally built it into a nationalism country. Cohesion recovered in a very short time among decision-makers. The dream of American model broke up to many intellectuals, and similar seeds to the mass – which could be identified by a series of nationalism protests (against U.S., Japan and France, etc. in the 2000s). We are not denying the growing internal conflicts especially those originating from the enlarging gap of income distribution. However, nationalism becomes, possibly unintentionally, a flag for the country to motivate its elites, especially the growing generation, and have its people know clear who they shall stand together with in  facing of international affairs and ideology conflicts. It constructs the social foundation for the feverishly-discussed “China pattern”: Washington Consensus could be challenged by nationalism and pragmatism, and the appeals for social-economic reform could not go beyond the visible international conflicts.

The Chinese change, very possibly, is out of expectation of the U.S. schemers of the “5-8 event”: they won the battle by China’s no-real-action after being detected for the strategic underscore; but they lost the country mentally by this winning.


Significant shift was made to China, although some components of the shift happened gradually, or haven’t been studied carefully by international observers. Firstly of all, the ratio of heavy industries in the Chinese industrial economy was increased. In the 1999, the growth rate of heavy industries was in the first time for years over that of the light industries. Certainly we may regard it as a coincidence. However, it kept growing, associated with the decrease of the ratio of light industries. Only during the December of 2000 to the July of 2003, the ratio of heavy industries grew into 60.85% from 56.28%, while light industries dropped down from 43.72% to 39.15%. It’s a trajectory shift, because technically speaking the Dengist reform was a changeover to the Maoist industrial economy -- the latter stressed Gerschenkronian heavy industry first strategy.


Quite a few industries get renaissance such as the automobile (now China is the no.1 producer and consumer of automobile in the world), the machine tool the constructive machine, and so on. Chery leads the exports of cars developed in China. SMTCL, namely a previous backbone SOE, represents a group of reviving machine tool makers by their technological breakthrough and foreign merge. ZPMC becomes the global leader in another industry. That’s to say, the heavy industries, which had ever been dying in the 1990s, come back with energy. And the change was not achieved with proactivities of foreign aids,or with the technologies of global production networks. If we sticked to a resource-based-view, we have to say: it just changes. The same industries just revolutionise themselves suddently, although by different operators and patterns.


Renaissance happens to another group of industries we “CANNOT SAY” much with details. But after 1998, the suicide of R&D institutes was out of the book of planners.  Retrospective studies  are made to the previous institutes now in "the invisible hand".Governmental funds come back to the front doors of survival institutes. In the aerospace industry, which is without doubt a flashing industry in the 2000s of China, the engineers and researchers in their 40s become the backbone while those in 30s new generation work as the main force. The implication is multi-fold: there were gap in talents for the previous policies; the new generations are going up on the stage and they are doing terrific which requires not only the physical investment but also the spiritual revival. The situation that young generation shoulder a big beam would definitely happen to the aviation manufacturing industry, in which China has claimed its plan to develop its own wide-body jets to compete against international monopoly giants both in the cargo plane and the passenger plane segments. Now engineers have finished the first round design for the plane head of the C919 model.
Similar structure of human force for product and technology development can also be found in other indigenous industries and firms, such as Chery, HuaWei (No.2 globally in the telecom-equipment sector now), SMTCL, etc.


The story about the past ten years for Chinese shall not only stay with the invisible policy change and the renaissance of China’s indigenous heavy industries. Rather, it shall go further with the mental model of Chinese. And the implication for researchers is obviously. Considering the development of latecomer countries, the source of their substantial dynamics lies in their collective reactions in the face of opportunity and crisis. To study Chinese, we must go deep into their mental model, and their roots of culture. Only after that, their cognitive model and collective behaviours could be discovered and understood. Otherwise, our understandings would be only separated stories for specific time periods one after one, or even worse by messing them up. Before 2001 (the time that China joined WTO), some China study experts, such as Peter Nolan from the Cambridge Univ. ever predicted the future of China’s indigenous industries very pessimistically. That could be true if China had gone along the previous trajectory. But if it and relevant premises for Chinese could be taken as true, China had already fallen into infinity for many times from the mid 19th century.


G2, as exaggerated by western writers may be just an illusion or a trap to the emerging power. But it doesn’t matter very much. If you could spend several years in fieldwork with the front-line managers, engineers and workers of Chinese core industrial factories, you would realise the most important point is not how China changes the rest world (such as the notion of “global factory”), but on the contrary is how China changes itself. The underlying change happen in the past 10 years will again breed the potential of China to impress the world continually in the near future.


To Chinese people, the experience of the past ten years is also a topic being or to be discussed. It’s a journey to be discovered again, to be retold, and to be enhanced with their achievements to their memories, as how deeply it has changed our trajectories, including those of my interviewees and myself.

Then, so long, 2009.

Kaidong Feng

Doctoral candidate, Sussex University, UK


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