The Shattered Dream: CHINA /1989 : CHAPTER 1 : A Nation on the Brink, a People Ripe for Change

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June 25, 1989 12 AM PT

Beijing —

Well, and what was so remarkable about (the first great Chinese Emperor) Qin Shihuang? He executed 460 scholars. We executed 46,000 of them! This is what I answered some democrats. --Mao Tse-tung Once upon a time, there was a country whose rulers completely succeeded in crushing the people; and yet they still believed the people were their most dangerous enemy. --Lu Xun, China’s most famous 20th-Century writer .

As the people of China ushered in the Year of the Snake on Feb. 6, some of the country’s top leaders were already growing edgy about what the snake might bring.

At a special New Year’s Eve tea party in the city of Nanjing, President Yang Shangkun, one of the senior leaders of the People’s Liberation Army, urged 1,700 army officers to “join hands with the (Communist) Party, government and civilians in overcoming difficulties China has encountered in its ongoing reform.”

In Beijing, inside the cavernous auditorium of the mammoth Great Hall of the People, about 4,000 Communist Party officials assembled for the New Year’s reception of the leadership--an annual ritual in which the party’s senior cadres sip tea, eat delicacies, renew old ties and listen to speeches praising the party’s good deeds.

But this New Year, Premier Li Peng sounded a slightly sour note. He told the leaders that they needed to do “an even better job” during the coming year. “Everyone is very concerned about the situation in our country,” Li acknowledged.

The situation was as gray as the skies that hung across north China. The economy was sputtering, racked by inflation. Many citizens were increasingly vocal in their disdain for the party leadership.

But most Chinese, seeking a respite from their day-to-day grievances, made sure to celebrate the New Year in the traditional, festive way.

For days in advance, Chinese flooded markets to buy food and clothes, made trips to the barber or hairdresser and cleaned their homes. Work stopped for more than a week as hundreds of millions of people visited their families and friends.

Residents of Beijing set off fireworks, defying the official prohibition against them in many public areas. In the city’s parks, fortune tellers did a thriving business, flouting the ban on their trade.

Even then, many people in China believed that 1989 would be momentous. It was to be a year of special anniversaries--in a country whose love of history and of numbers makes anniversaries particularly important.

For the ruling Communist Party, 1989 would bring the 40th anniversary of the founding of the People’s Republic--the day, on Oct. 1, 1949, when Mao Tse-tung had declared to the throngs in Tian An Men Square: “The Chinese people have stood up.”

Others outside the leadership were already looking ahead to two different milestones. One was the 70th anniversary of the May 4 Movement--the great awakening of Chinese students and intellectuals--commemorating the day in 1919 when Beijing students sparked a series of nationalistic protests that swept across China. The other anniversary would come on July 14, the 200th anniversary of the French Revolution.

Chinese students said--and party leaders feared--that either of these days could provide the focus for massive demonstrations against the leadership of the Communist Party.

In retrospect, China seemed at the beginning of the year to be on the brink of an explosion. Signs of social unrest and political deterioration were everywhere.

Prices were running 30% or more above the previous year, a rate of inflation higher than at any time since the victory of the Communist revolution in 1949. Throughout China’s long history, its people have thought and worried about money as much as any people in the world. In Chinese cities, the rising prices made people angry.

“Under Mao, China was in chaos, but at least the prices were stable,” a young Shanghai office worker murmured to an American correspondent. “Now, China is stable, but the prices are in chaos.”

During 1988, each new wave of price increases had touched off panic buying. People bought jewelry, televisions, cooking oil, soap, whatever they could buy with their cash. There had been runs on banks.

From July 25 to 27, 1988, in the northeastern city of Harbin, residents lined up outside banks and withdrew $3.38 million, an amount unprecedented in that city since the Communist takeover. Over those same three days, all of the stocks of televisions, tape recorders, refrigerators, washing machines, rice cookers and carpets in all of Harbin’s department stores were bought out.

To help make ends meet, many people were taking second jobs or even leaving their regular factory or office jobs for new kinds of work. They could do that under the regime’s economic reform program--drive a cab, sell food on the street, do piece work at home, translate mystery novels from English into Chinese, anything that might earn money.

Ironically, allowing the people the freedom to do this did not make the Communist Party any more popular. Only a few people seemed to be getting rich--and, ordinary people said again and again, those who were getting the richest the quickest were the relatives of high-level cadres and members of organizations connected to the party.

One investigation, by the Chinese newspaper Economic Daily, found that over a three-year period in Sichuan province, the provincial government had spent more money buying new cars than it had spent on agriculture, the region’s most important source of income.

Moreover, to the extent that the people had greater economic freedom, they were becoming increasingly independent of the Communist Party. The number of people working in China’s huge state enterprises was declining. The party cadres had less and less hold over the daily lives of China’s citizenry.

The party leadership itself was badly divided and increasingly remote from the people.

One group within the party, the so-called reform wing headed by General Secretary Zhao Ziyang, had been trying to press forward with a radical change in China’s pricing system. The idea was to lift state-imposed price controls and let prices respond to market forces.

Zhao and the reformers were blamed for the accelerating inflation of 1988, dimming hopes that they could soon improve the people’s lot. A kilogram of fish that cost 16 cents in 1986 had gone up to 55 cents by the beginning of 1988, and in May of that year, fish and other food prices shot up another 30%. Such increases eroded popular support for Zhao and the reformers.

The other faction in the leadership, represented by Premier Li Peng, wanted to freeze inflation and rein in the economy. But it also seemed to want to return China to the old days, the era of central planning and little scope for market forces.

When Li and others in the leadership sought to cool down the economy in the fall of 1988, money and credit became so tight that peasants had to be paid in IOUs for the fall harvest. And reports circulated that corruption was taking “hot” money out of circulation, contributing to the shortage of currency and impeding commerce.

Li and his more traditional colleagues in the party were, if anything, less popular than Zhao and the reformers.

At the apex of the leadership, Deng Xiaoping, 84, seemed increasingly erratic. In the spring of 1988, he had encouraged--indeed, goaded--Zhao to move forward quickly on lifting price controls. Three months later, in the face of mounting public outrage over rising prices, Deng switched direction and threw his support to Li Peng.

At Beijing University, the nation’s most prestigious school, students had begun to put up wallposters denouncing the country’s most senior leaders. They spared no one, not even Deng.

During one demonstration in June, 1988, students put up a placard that said: “The Chinese people should not put their hope in a single, benevolent emperor!”--an obvious reference to Deng. “We no longer believe that the party can be reformed!” said another poster at the university.

As January turned into February and the Year of the Snake dawned, Li Zheng’s zest for life had turned into a brooding frustration. Only a year before, Li (not her real name) and her husband had enjoyed a rather comfortable life. Now, it had turned sour.

Rapid inflation through 1988 had wiped away the margin of comfort that their two salaries had given them. Even after working long hours, they found themselves unable to meet their needs.

What was worse was something Li had discovered in her work at a Beijing hospital, where she was a well-regarded doctor’s assistant: Her boss was a crook. The head of a ward, he was secretly forcing patients to pay for the medical care they desperately needed. He was becoming hugely rich, and Li could do nothing about it.

Later that spring, Li would take part in the mass protests in Beijing, eventually providing medical care for hunger-striking students.

Another Beijing resident in his 30s had fallen into similar despair. Deng Yitian (not his real name), seriously injured in the 1979 border clashes with Vietnam, had felt himself fortunate to get work afterward as a Beijing taxi driver. It was good work and paid well as tourism began to boom.

But near the end of 1988, he had been taken off the taxi pool and assigned to work as a regular driver for a government office. What he heard as he drove sickened him. In the back seat, officials spoke openly about the money they embezzled, about the valuable gifts they received from foreign investors. Deng would drive on, pretending not to listen. But inside, his anger boiled.

His chance to act was not far off. Later, when the demonstrations began, Deng drove his car for the cause of the students. It was a taxi for leaders in a hurry, a vehicle to bring them much-needed food and drink.

Virtually every segment in Chinese society nursed its own grievances:

-- The military, the People’s Liberation Army, felt that its status had slipped. The leadership was holding down the PLA’s budgets as it sought to free up money for economic modernization. The PLA was having trouble enlisting new soldiers because peasants, who make up most of the enlistees, found they could make more money by staying at home.

By early this year, some army officials were even recruiting criminals, schizophrenics, deaf mutes and illiterates to help fill their ranks, according to the official newspaper People’s Daily. “An army with no education is a stupid army,” the newspaper said.

-- Students, even at the nation’s best universities, were forced to live six or eight to a room, in cold dormitories without hot water or places to study. They seethed with resentment at the special dorms and dining halls that authorities set aside for foreigners. In late December, a brawl broke out in Nanjing when African male students were observed with Chinese women.

“We’re tired of being second-class citizens,” said one wallposter erected at the Beijing Language Institute.

-- Workers fumed over several years of changes, such as new bankruptcy laws, that seemed to erode their job security but demanded more and harder work. They complained that inflation was outstripping their wage increases.

Many of them were especially angry over the inequities in income brought about by the economic reforms. There was an epidemic of what the Chinese call “red-eye disease”--jealousy.

“We have new contradictions between prices and wages,” said Chen Ji, a senior official of the All-China Federation of Trade Unions. “Now factory directors earn more than workers, and some workers earn more than other workers. There are new problems we never met in the past.”

Throughout the country there were signs that the party was losing its ability to govern.

People and goods were streaming east and south in China, to the regions where money and jobs were abundant.

Residents of the countryside were swarming into the cities. Hundreds of thousands, perhaps millions, of Chinese headed for Canton and the areas around it, looking for work. In northern China, young peasants went to Beijing, looking for jobs as construction workers or maids. “We’re from Anhui province,” explained one girl as she and her colleagues lingered at one of Beijing’s new, unofficial labor markets. “It’s really poor there.”

Crime was on the upswing. People were being robbed on railway cars. Even freight trains were being stripped.

In December, four peasants stopped a freight train en route from Chengdu to Kunming. More than a dozen more peasants jumped aboard, removed the canvas covers from the cars and handed down 60 sacks of chemical fertilizer to their friends waiting below.

Young Chinese were scraping together their own money--or that of friends and relatives--to leave for study abroad. The number of Chinese students in the United States swelled, within two years, from fewer than 20,000 to more than 40,000.

Peasants were refusing to grow grain. Couples, ignoring the party’s population-control policies, were having second and third children. Provincial and municipal governments were disregarding orders from Beijing to freeze spending on new construction projects.

All this ran contrary to the party’s policies. Yet the party, unlike in the past, seemed unable to tell anybody what to do.

The mood of Chinese was angry, not frightened. When Perry Link, a UCLA professor of Chinese literature, moved to China in the summer of 1988, a young Chinese he had known in Los Angeles visited his apartment at Beijing’s Friendship Hotel.

The student poured out his unhappiness. After returning to China, he had found that life was oppressive. “I have seen through the vanity of life,” the student said.

In the time-honored fashion of cautious Westerners in China, Link motioned for the student to be quiet, reminding him that the apartment might be bugged. “I don’t care,” the student said. “I’m going to say what I want.”

Most of all, the Communist Party faced a challenge by an increasingly bold group of intellectuals calling for democratic changes in China’s political system.

Before the New Year, students in Beijing and Shanghai had been meeting in weekly lecture groups. They gathered in some of the cities’ new private cafes and bars or, occasionally, in their dormitory rooms. They were talking politics.

One Beijing group called itself the “Salon.” It had been formed two years earlier, after the end of student demonstrations that led to the ouster of Hu Yaobang, general secretary of the Chinese Communist Party. Now, in the months leading up to the New Year holiday, it had been discussing current problems in China, such as the contradiction between the nation’s economic reforms and its lack of political change.

This New Year’s holiday was no ordinary one, the students agreed. They decided that, during the three-week break between university semesters, they would go to smaller cities and towns to spread some of the ideas they had been discussing--their ideas about the need for a more open political system in China.

On New Year’s Eve, while Chinese leaders such as President Yang were out touring the nation, more than 100 Chinese scientists, academics, actors and businessmen gathered for their own holiday tea party.

It was held at a Beijing hotel, sponsored in part by the Chinese Academy of Science’s Entrepreneurial Assn., precisely the sort of group that had not existed before Deng Xiaoping launched his economic reform program a decade earlier.

Originally, the tea party was meant to be a nonpolitical event. Some of the guests had been singing some traditional songs or swapping stories. But suddenly, the conversation in the room was silenced by one of the participants.

It was China’s best-known dissident, an astrophysicist named Fang Lizhi. He delivered an impassioned speech imploring those in the room to work hard for the cause of democracy.

“Some people think China doesn’t need democracy, but I think human rights are basic,” Fang said. “ . . . Let’s call this ‘The Year of Human Rights.’ ”

Some in the audience cheered, and a few more came up to Fang afterward and told him they agreed with him. Others remained silent.

Pronouncing Chinese Names

CHAI LING, student leader: Chigh Ling

CHEN XITONG, mayor of Beijing: Chun Shee-toong

DENG XIAOPING, top Chinese leader: Dung Sheeow-ping

FANG LIZHI, dissident astrophysicist: Fong Lee-jer

HU YAOBANG, former party chief: Hoo Yow-bawng

JIANG QING, Mao Tse-tung’s widow: Jeeang Ching

LI PENG, Chinese premier: Lee Pung

LI SHUXIAN, dissident physics professor; Lee Shoo-shee-en

QIAO SHI, Politburo member: Cheeow Sher

QIN JIWEI, Politburo member, defense minister: Chin Jee-way