Spurred by Economic Reforms : China--Money Talk No Longer a Taboo

ABOARD THE SHANGHAI-PEKING EXPRESS —  On jammed platforms of railroad stations up and down the East China coast this week, passengers are lugging television sets, radios and tape recorders to take home to their relatives along with the traditional lunar New Year cakes.

Inside the train cars, on the hard wooden seats and benches where ordinary Chinese sleep fitfully as they travel, people compare notes about the prices being charged in their hometowns and the bonuses that various factories are handing out.

China’s people--more than a billion of them now--begin the celebration of the lunar New Year, or spring festival, today, and this year, more than ever before, the talk on the trains and at the family reunions concerns the rapid changes in people’s personal finances.

Some Get Increases

“The main topic of conversation is money,” said one young government worker from Shanghai. “All people are talking about is how much they will get in wage increases or bonuses. Some of my wife’s family have gotten increases already, and others haven’t. It makes for a lot of jealousy.”

The realization that China’s whole price structure is changing has unsettled many people here, particularly the elderly. A 37-year-old teacher of English commented: “My mother said last week that 10 years ago China was in chaos, but Mao (Tse-tung) kept the prices stable. She said now China is stable, but the prices are in chaos.”

The current preoccupation with money must be put into context. Under any circumstances, people in China like to talk about financial matters more openly than Americans do.

American visitors to China are sometimes surprised to find people here volunteering information about their wages, their bank accounts and the cost of their clothes or other possessions. By contrast, Chinese visitors to the United States are amazed to find Americans freely discussing sexual matters, about which people in China are far more reticent.

Year of the Ox

This year, those in China who like to discuss money really have something to talk about. As families gather at home to celebrate the beginning of the Year of the Ox, they are comparing notes about who is getting what and how fast under the regime’s unfolding economic reform program.

Under the reform program announced last October, China is planning to let an increasing number of prices be determined by the market forces of supply and demand, to subject enterprises to profit incentives and to permit private businesses to play a limited role in the national economy. Along with these changes, Chinese workers are being promised significant wage increases.

Because of the widespread fear of inflation, the announcement of the program sparked a rush to withdraw savings and transform them into consumer goods. In major cities like Peking and Shanghai, residents have for months been lining up to buy color television sets, refrigerators, washing machines and other household items.

The fears of inflation and the consequent buying spree have apparently reached all parts of China and all segments of society.

A young engineer from a small town in Hunan province said in an interview that, a few months ago, poor people there began buying all available sugar and soap in expectation of price increases. Local authorities countered by bringing a huge supply of sugar and soap into the town and telling people they could buy as much as they wanted at the prevailing price.

“People stopped buying the sugar and soap, but they began buying new clothes,” the engineer said.

During the past few weeks, with the spring festival approaching, Chinese newspapers have launched an intensive propaganda campaign to assure the nation that there will be no rampant inflation and that there will be enough consumer goods to meet the upsurge in demand.

Stern Warnings

“The stocks of food, clothing and other necessities are large, and the living standards of our urban and rural populations are being raised gradually,” wrote Hu Bangding, deputy director of the state price bureau, in a newspaper article. “The price reforms will not cause the feared general rise in the cost of living, because of the central government’s carefully considered decisions and planning.”

In an effort to make sure the reform program is phased in slowly, Chinese authorities have recently issued stern warnings to local officials not to allow any unauthorized price or wage increases. However, Chinese travelers interviewed said that some factories that feel confident of their ability to continue making profits are finding ways around the government’s controls.

“One of my relatives told me that her factory gave its workers food, clothes and other commodities at the end of 1984,” a Peking office worker said. “Then they will get a wage increase with the rest of the nation later this year.”

In addition to the fear of inflation, there is also concern here about the possibility that the economic reforms could produce new social upheaval, pitting various classes and groups against one another.

Already, Chinese doctors, professors and civil servants are privately voicing complaints that the economic reforms will benefit factory workers more than they will help intellectuals.

Tensions are emerging between those working in jobs with profit incentives--some of whom are getting quick financial windfalls--and those whose salaries and bonuses are relatively fixed.

“I don’t know how much longer this will go on,” said one civil servant, who said he sees no way to increase his income quickly. “Maybe two or three years, maybe five.”

Despite his dissatisfaction, the man said neither he nor anyone else he knows is planning to go to work for any private business, because the financial prospects are uncertain and because the political climate that now supports a degree of private enterprise in China may shift back once again.

Amid all the uncertainty, China’s economic reform program is producing its own curious blend of conspiracy theories and folk wisdom. For example, one joke in Shanghai this week links some of the economic reforms to the recent visit to China by a Soviet official.

Coupon System Started

Early this year, in an effort to change the price system in a gradual way, the Chinese government instituted a coupon system for the purchase of some foods. With the right coupon, a person is allowed to buy a certain amount of specified foods at a state-approved low price. If he wants to buy more, he can do so but must pay the market price determined by supply and demand.

One longtime Shanghai resident said that the coupon system reminds him of the rationing that was imposed during the 1950s, when the Soviet Union and China were close allies. He noted that Soviet Deputy Premier Ivan Arkhipov came to China last December in an effort to improve Sino-Soviet relations.

“In my neighborhood, we have a saying that the Russians came back and, less than two months later, we have the coupons once again,” the man said.