One province leads China into the '90s Economic feats seen as way of the future

March 08, 1992|By Robert Benjamin | Robert Benjamin,Staff Writer

CANTON, China -- At the South Coast Seafood Restaurant, Chinese dwarfs and Nepalese Gurkhas serve as doormen. Pretty young women draped in furs make a show of leading guests to their tables.

Inside the mirrored hall, every table is packed with Hong Kong, Taiwanese and local entrepreneurs, downing imported liquor and mounds of seafood, and cutting deals over their ubiquitous portable phones.

This is China in the 1990s -- specifically Guangdong Province, the heart of what now is hailed as the nation's "Gold Coast." These days, the money-men relentlessly partying at the South Coast have plenty to celebrate.

At a time when the economic growth of the Western world and much of Asia has slowed dramatically, Guangdong Province is booming more than ever.

Guangdong claims the world's fastest-growing economy, no small feat for a region of 63 million people -- more than any European nation except Germany. Annual economic growth here since 1981 has averaged 20 percent. Last year, it topped 27 percent.

In the process, Guangdong has become China's promised land.

Foreign investors have poured billions of dollars into the province. Millions of unemployed rural laborers are flooding in from all over China. U.S. companies for the first time are peddling successfully here everything from baby food to beer.

More than ever, Chinese reformists are touting Guangdong's achievements as the way of the future for this troubled land -- a model presaging profound shifts in China's political and economic realities. The Guangdong boom began with the final rise to power of senior leader Deng Xiaoping, and his historic move in 1978 to reopen China to the world and remake its sinking socialist economy.

For many years more open, independent and entrepreneurial than other Chinese regions, Guangdong embarked on an economic free-for-all:

* The province's economy has grown four times faster than China's most sluggish regions, although a mere 3 percent of its ** investment comes from Beijing. Its per-capita income of $455 a year is China's highest.

* Foreign and private companies, including rural collectives that actually are privately owned, dominate Guangdong's economy -- with state industries' share reduced to 23 percent. Almost 90 percent of the goods sold are free of price controls, far more than anywhere else in China.

'Spiritual pollution'

But with this success story has come soaring crime, prostitution, drug use, Western individualism and official corruption. This "spiritual pollution" -- as it is labeled by Beijing propagandists -- has provided useful fodder for attacks by China's more conservative socialist elders.

These attacks mounted after the 1989 Tiananmen Square massacre. Along with a national fiscal austerity campaign, the vitriol cast doubt on the future of Guangdong's experiments.

But with a surprise tour of the province in January by Mr. Deng -- at 87, still China's supreme arbiter of power -- Guangdong's role as China's standard-bearer has been reaffirmed.

Mr. Deng reportedly hailed Guangdong as the next Asian region to industrialize, following the pattern of Hong Kong, Singapore, Taiwan and Korea. He called for the rest of China to emulate its economic successes.

The reformist-conservative power struggle in Beijing is far from settled, and meaningful political reforms are not part of that debate. But Mr. Deng's Guangdong trip immediately led to a stream of statements from other Chinese leaders and state news media strongly in favor of accelerating economic liberalization.

The Chinese Communist Party newspaper People's Daily now describes economic development as the true test of socialism. It recently endorsed "the correct understanding and use of capitalism" -- in a significant and abrupt departure from its anti-Western tone of recent years.

With the fall of Soviet communism, the newest line here is this: The party no longer can retain power by leading the masses as the prophet of Marxism, but only by delivering what the people want.

Increasingly, what most Chinese appear to want is what Guangdong has already achieved.

'I long for capitalism'

Jiujiang Township is an average success story for the Pearl River Delta, a triangle bounded by Canton, Macao and Hong Kong.

More than a decade ago, Mr. Deng planted in this fertile basin three of China's first five "special economic zones," the earliest areas to adopt capitalist methods and favorable terms for foreign investors.

These reforms quickly spread to the rest of the delta. Today, half of Guangdong's industrial output stems from there, even though it makes up but a quarter of the province.

In Jiujiang, a backwater in the early 1980s, the changes have been rapid. It used to take a half-day to drive the 35 miles from Canton to the township by a narrow road and a series of ferries. nTC Now the trip takes an hour, speeded partly by a freeway and new bridges.

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