Written by Laurence Brahm - Published by South China Morning Post on 06/08/2003

Just as Tiananmen marked a turning point for the mainland, so the outbreak of Sars is likely to usher in a new era of change under President Hu Jin Tao, writes Laurence Brahm

This past month has been a time of acute introspection for many people in Beijing, and Wednesday, in particular, provided an opportunity to look back on the years that have passed since June 4, 1989. I can’t remember the city having been so quiet – nor the economic pain so severe – since the aftermath of Tiananmen.

Sars will surely go down in China’s history as another threshold, a turning point, just as June 4 did.

There can be little doubt now that the traditional Chinese view of the Year of Sheep being a bad year – as sheep die butchered – has been borne out. But at the same time, Chinese 12-year cycles represent full circles of change and, fortunately, the end of one cycle represents another’s beginning.

The past two of these cycles involved transition that would be considered unprecedented by any nation’s standards. And the way things are starting to change in the wake of Sars suggest another dynamic round of reforms is in the making.

The first cycle of reform began when Deng Xiaoping consolidated power at the 11th CCP congress in 1978, ending a Maoist era of isolationism. An era opened, spanning in the 1980s, which has characterized by careful, uncertain experimentation. I remember the excitement around the 13th congress in 1987, when Deng declared China “not communist but socialist”, and “only at the first stage of socialism”, requiring an indefinitely “long period of time” – hinting at capitalism, or at least entrepreneurship. The frenetic, euphoric buzz of investor, bankers and Chinese returning students during 1987-88 was hard to describe. But the enthusiasm was shattered the following year in Tiananmen Square, closing this era.

In truth, the reforms of the 1980s focused primarily on agriculture, introducing the “self-responsible system” that moved China from a nation of crop and staple insufficiency (China was then importing rice) to one of self-sufficiency. While so-called “rich farmers” were paraded before the media, urban reforms were not keeping pace with the rural areas, especially on the wage front. Shock therapy had become vogue in the Soviet Union and when Deng’s protégé Zhao Ziyang applied it to China, inflation created more shock than therapy – leading workers to join student protest on that fateful spring on 1989.

As the Soviet Union collapsed a year later, introspection sunk into Zhongnanhai – in the same way it has with Sars – signaling time for a new approach.

It is hard to forget the beginning of that new era. For me, the epiphany came when I was sitting in the China World complex, Beijing’s first comprehensive hotel-office block, on the morning of June 4, 1991. I was listening to the radio as the suicide of Mao’s notorious wife and Gang of Four member, Jiang Qing, was broadcast. Her final act – ironically announced on such an auspicious date – seemed to protest against Deng’s new brand of socialist-market economics. It certainly represented the passing of one era and the beginning of another, I thought about this a lot that morning, presenting a seminar on Chinese law to a new flock of foreign investors. Beijing was re-awakening.

By the following June, a new buzz was in the air, inspired by Deng’s springtime “southern tour”. To a great extent, the 1989 power crisis had precipitated Deng’s own determination to open and reform China Faster. Enthusiasm rising, foreign investors came back to Beijing, in even bigger numbers. Students returned again, savvy with newly acquired MBA degrees. Beijingers began hustling, I can remember 1,000 yuan selling for US$100 on every street corner. Government offices were busy setting up side business – “san chan” “third estates” “China Inc”. Everyone suddenly seemed to know some leaders secretary who could pull a fast project approval. “What would you like? It can be done,” could be heard in every hotel lobby and banquette room. Money was on everyone’s lips. It suddenly seemed that Chinese in Beijing could not stop talking about money.

I did not realize that in the 1990s “money worship” would evolve into a national mental disorder, saturating all levels.

In 1992, I was negotiating Ericsson’s first joint venture with classic state-owned enterprise, Panda Electronics of Nanjing. Imagine China without mobile phones. Think about it. The only ones allowed were carried in from Hong Kong supported by documents, big cards with big red stamps from post and Telecom Administration and Public Security. Without those big cards you could not carry a mobile phone through customs or even around the city. Yes, only two years after Tiananmen, China’s security apparatus was still that uptight, we closed our deal. News in the grapevine so had Motorola. Nokia had arrived as well.

The next thing I knew, another decade was about to past. In June 1998, Beijing was buzzing again in preparation for Bill Clinton’s visit. The first by an American president since relations chilled after Tiananmen. Finally, after nearly a decade, CNN stopped running dark, scratchy, Tiananmen footage, refocusing on a synagogue in Shanghai that Mr Clinton would visit.

After Mr Clinton’s visit, American business delegations followed. They saw Beijing transformed. Needles to say, Shanghai shocked them. Deng’s “first stage of socialism” had within a decade become China’s “first stage of capitalism”.

Indeed, by June 1998 Beijing was on a roll again. Newly ascended premier Zhu Rongji’s unprecedented outspokenness inspired everyone as he introduced reforms that melted the once-sacrosanct iron rice bowl systems, setting off commercialization of everything from housing to medical care, retirement, and finally grain market prices. Without question, Mr Zhu shifted the country off the state-planning track onto a market, now irreversible. Mr Zhu, amid the Asian financial crisis that year, shrugged off IMF medicine. China emerged from the crisis, through Mr Zhu’s concoction of managed marketisation, ever stronger.

The era of Jiang Zemin and Mr Zhu witnessed currency stabilization, with China’s reserves ballooning through US$330 billion, and the emergence of a new consumer economy evidenced by currency black marketers being replaced by DVD sellers, whose enthusiastic product promotions outside of every Starbucks in Beijing underscored China’s worsening counterfeits and contrasting service industry improvements.

Taking centre stage in foreign policy, Mr Jiang managed to impress many with his ability to play the two-stringed erhu, sing Pavarotti and speak broken English. Mr Zhu concentrated on economics, closing out two decade of reforms with an average 8 per cent to 9 percent growth, inflations controlled at less than 1 per cent. With modern China’s first smooth leadership transition spanning the 2002 16th CCP congress and 2003 10th National People’s Congress, Hu Jintao took centre stage as president and Wen Jiabao as premier. Things couldn’t have seemed better.

Then Sars hit.

The fake number scandal surrounding the disease forced China’s controlled press to face transparency as a very question of CCP political legitimacy. Soon Beijing’s Sars patient broadcast exceeded the frequency of surf reports from Hawaii. The CCP demonstrated Mao-styled muscle by building a 1,000 bed hospital within a mere week. Last month, everybody religiously wore white surgical masks, abandoned entirely by this month.

The Sars crisis 14 years on from June 4, 1989, may prove pivotal in setting China on yet another direction. National problems of bad sanitation and horrific hygiene are questions not solved through growth statistic, rather linked to serious deficiencies in education at lower stratums and insufficient allocation of social software resources, widening the gaps between urban rich and rural poor. The crisis in 1989 erupted from urban pressures, as 1980s reform improvement had focused on rural areas. Likewise, 1990s reforms raising urban wealth have left rural regions behind. Draconian measures preventing Sars spreading to rural regions were driven by fear over rural infection creating a desperate situation.

China’s government, reflective of society throughout the 1990s, has been too focused on glitz – quantity of economic growth, not quality. Foreign and investment policy infatuation with western heads of state and Fortune 500 CEOs overlooked the influence of other social forces like NGOs, until World Health Organisation brought China to its knees by issuing Sars travel warnings.

Once again, changes may be in the air. China’s government and press are discussing these issues openly. There is a lot to be said for a nation recognizing deficiencies and seeking to address them. This differs starkly from the eras of Mao, Deng and even Mr Jiang, when rosy picture painting was national policy. China today, having undergone two twelve-year cycles of change, has transformed from a nation driven by ideological convictions functioning in economic scarcity, to a nation poorly lacking ideological values – with money prevailing over life itself and social dignity. Prolific corruption has given Beijing a higher per capita ratio of abalone and sharks fin restaurants than staple food shops. China’s media criticizes national “money worship” as social disease. Unchecked, it could cancerously eat away at China’s achievements.

Sars may prove pivotal in checking or shifting national values from infatuation with getting rich overnight, and superficial symbols of development like marble lobbies of government offices and plaster Roman statutes decorating real estate projects. Modernity goes deeper, involving sets of values, quality of life not quantity of materialism.

Within two twelve-year growth cycles, China has gone from an economic of scarcity to oversupply. Likewise, perceptions, values, and orientations of Chinese society manifested by behavior of its political leaders swing with the pendulum. Already, many of the rags-to-super-rich paraded as symbols in 1990s success are, together with the officials who assisted them, being arrested. In China today, that’s how fast things change.

If only the West could keep up. Since 1989, China analysis from America University and government thinks-tanks have carried a self imposed political correctness that believes only an American-style democratic system of reform will safe China from inevitable collapse. Hamper by a determination to see China’s changes through blinkers of preconceived models, they fail to recognize that political changes will evolve as robust economics transforms China into an economic powerhouse emerging on sheer weight of its own market potential. Too much concentration has been focused since 1989 on the question of democracy for China, missing both successful achievements and concrete problems underlying miraculous economic growth, gnawing at the root of this success.

China’s problems today go deeper than political system reform, right to the root society. China has come full circle, ironically mirroring where it was at the beginning of another century: diminished central government control challenged only by its own corruption, rising regional economic warlord-ism, rural populations shifting towards cities in hopes of fortunes, and urban standards set by foreign business. These are problems or realities, which will not be improved by adopting razzmatazz. American bi-partisan elections, which Chinese see in their own socio-political context as buffoonish. Badly needed political reform will evolve together in a unique Chinese framework, but only with necessary educational reform, the construction of social values as the basis for behavioral order rather than reliance on government controls, which is unfortunately still the case.

To achieved this sustained economic development is essential as China’s fundamental basis for political stability. Sars, however, has thrown new questions into the equation, over the quality of social benefits, behavioral respect effecting hygiene and environment, and over what values will serve as the foundation for China’s society and body politic. The press liberalization process that is already in momentum, partially due to political decisions made in awareness of such necessity (and partially forced by digital communications) will contribute to this irreversible process.

Sars, as Tiananmen, has woken up the government. Power can be shaken easily by social crisis. For a new leadership just eased into power, it has made them sit down and think.

Laurence Brahm is a global activist, international mediator, political columnist and author. He is the leading advocate of a fresh development paradigm - The Himalayan Consensus - an innovative approach to development.

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