“China’s problem is that it has a dream, a dream of modernisation,” said Prof Wen Tiejun in his lecture on “The Year of ’93 (China’s Crises and Opportunities)” at Lingnan University on 24 January.
Prof Wen observed that the year of 1993 saw great deficits in government revenue, foreign trade and money supply, posing a major crisis for China that was comparable to the Great Depression in the US and Western Europe. China responded with depreciation of the Renminbi by 51% in real terms, re-allocation of local tax returns between the municipal and central governments from 73%:27% to 50%:50%, and monetisation of Renminbi through investments in infrastructure. These were named “deepened reforms” in the Chinese context.
Prof Wen examined the underlying causes of China’s 1993 crisis, which can be dated back to the opening-up reforms in 1978. The reforms were essentially a response to the economic problems of China after decades of closed-door policy and international sanctions.
In his lecture, the title of which conjures up French writer Victor Hugo’s last novel about the anti-revolutionary revolts of 1793, Prof Wen also compared the socio-economic conditions of France before the outbreak of the French Revolution to the current situation of China. He said Louis XVI’s attempt to negotiate with the rising bourgeoisie at the dawn of the Revolution might be comparable to the ongoing power gaming between the government sector and the fast-growing middle-class in China. What seems worrisome is that, according to Prof Wen, both parties do not seem to know where the true crisis lies and have been paying little attention to the livelihood of the grassroots. However, the poverty-stricken, loosely organised peasants were those who ignited the flames of revolution with their attack on the Bastille. The occurrence of more than 100,000 “mass public security incidents” in China annually also tells something of the Chinese grassroots’ response to the power game, Prof Wen added.
From a historical perspective, Prof Wen concluded that the price of modernisation is too high. He questioned whether China could afford paying such a price. “The problem of China is that it has a dream, a dream of modernisation that very few people bother to question,” he added.
Born in 1951, Prof Wen is a renowned expert on socio-economic development and rural issues advising various Chinese ministries and departments on the economy and the environment. He now serves as Executive Dean of the Institute of Advanced Studies for Sustainability, Director of Rural Reconstruction and Director of Institute for Rural Economy and Finance, Renmin University of China.