BEIJING -- A photo appeared in the U.S. press a couple of years ago showing a successful Chinese businessman standing next to a red Ferrari in front of Mao Tse-tung's portrait overlooking Tiananmen Square. The implication was clear and simple: Capitalism had triumphed over communism and life was much better for it.
In her first book, a national best-seller called "The Pitfalls of Modernization," Chinese economist He Qinglian tries to tear that picture apart. She argues that the grand economic experiment which began here two decades ago has not led to a better society, but a more polarized, corrupt and cynical one.
The nation's spectacular growth is due less to the production of wealth, than its theft by government officials, who are seizing state assets and taking them into the market place, claims He (pronounced Huh).
"The primary target of their plunder was state property that had been accumulated from 40 years of the people's sweat," He writes. "And their primary means of plunder was political power."
He's thesis has captured attention because it runs counter to the widely held view that the nation's leaders have pulled off an all-favorable economic miracle. Instead, she focuses on the darker side of economic reform, which includes widespread corruption, a decline in moral values and environmental destruction.
Rewarding a loud, contrary voice in what is still a largely conformist culture, readers have snapped up He's book; there are now more than 400,000 official and pirated copies in print, according to her publisher. Despite her tough criticisms -- or perhaps because of them -- she has also earned the approval of one of Chinese President Jiang Zemin's top advisers, Professor Liu Ji, who helped get the book published.
In 1978, the late leader Deng Xiaoping began opening China's inefficient socialist system and replacing it with a more market-oriented one that dramatically raised living standards.
The results have been spectacular. The nation's gross domestic product has risen nearly 20-fold since then. Once largely empty, the skylines of Beijing and Shanghai have filled with glass and steel towers, and cars jam the streets.
In the process, though, the social fabric has frayed. This is where He, who holds a master's degree in economics from Shanghai's prestigious Fudan University, focuses her wrath.
She writes of Communist Party cadres who bought raw materials at fixed state prices and then sold them at a high profit on the open market. She tells of officials who use public funds to buy real estate and stocks. If they lose, they pass on the debts to the state. If they win, they pocket the gains.
In a typical example, she cites the manager of a state-owned seafood company in Shenzhen, a free enterprise zone in southern China. He sold 430 tons of chicken and shrimp and took the proceeds to the nearby Portuguese colony of Macau where he gambled away more than $1 million at casinos. He later fled China with the remaining $800,000.
Even more disturbing to He is the breakdown in moral values and trust. She traces the decline to Mao's Orwellian style of governing in which citizens were encouraged to inform on one another.
In today's competitive economy, ethics have only grown worse, she says. Greed often rules, contracts are largely ignored, embezzlement is common and some people are so accustomed to lying they do so unconsciously.
"Right now, the whole ethical system in China has collapsed," says He. "I'm not very optimistic about it. It needs a few generations to be restored."
While He, 42, doesn't like much of what she sees in contemporary China, she says she wouldn't want to return to the past.
He grew up during the Cultural Revolution (1966-1976) and had to labor in the countryside where her roommate turned her in for reading such "feudalistic" material as Tang Dynasty poetry. She describes the Cultural Revolution as "endless suffering and disaster."
Today, she works as a newspaper reporter in Shenzhen where she lives with her husband, a manager in a decorating company, and their 5-year-old son. Free-wheeling Shenzhen set up by Deng, epitomizes many of the excesses of China's so-called "Market-Leninism" which so distress He.
A quiet farming and fishing community in 1978, Shenzhen -- which borders Hong Kong -- is now a modern city of more than 3 million overrun with businessmen, discos and prostitutes. The observations He made while working at one of the city's largest companies inspired her to write the book.
In person, He comes across as a serious-minded academic, genuinely concerned with China's deep-rooted problems. She arrives for an interview wearing large glasses and typical Shenzhen fashion: a long, glittering black dress and a strand of fake pearls she picked up in Hong Kong. In a more than two-hour conversation, she rarely smiles.
A budding media star, she appears comfortable in the limelight and has shown a flair for the dramatic. When she learned this fall that another journalist had apparently published a book under her name called "Behind the Pitfalls of Modernization," He flew to a convention in China's ancient capital of Xian to confront the book's distributor.
In recent months, He has been the subject of stories in the Chinese press as well as the New York Review of Books. He has made more than $12,000 from its publication, a large sum by Chinese standards. But she might just as easily been punished. The Communist Party often has little use for critics.
Last week, police rounded up dissidents who have been trying to form China's first opposition party. Some have been freed, but the most prominent members -- longtime activists Xu Wenli of Beijing and Qin Yongmin of Wuhan, a city in central China, remain in custody and could face jail terms.
He appears to have avoided a similar fate for reasons which illustrate the tight boundaries of debate under China's authoritarian system. Unlike Xu and Qin, He represents neither a political party, nor a direct threat to the regime. She has also been careful not to criticize individual leaders by name and instead blames the system itself for China's troubles.
Perhaps most important, her work serves one of the leadership's larger goals: cracking down on corruption. Graft -- a huge problem since the economy opened -- has generated great bitterness among ordinary Chinese.
China's leaders recognize that in tough economic times people can use the issue to demand change just as Indonesians did in June, when they forced former President Suharto from office.
"The biggest threat to the regime is corruption," says He.
Most Chinese these days would say that they are better off than two decades ago, before Deng's reforms. And when pressed, He acknowledges that Deng's economic policies have transformed the nation. The problem, she says, is that he did not go far enough.
A more pluralistic society with checks and balances could contain corruption, but that would require the Communist Party to open up the political system and begin ceding power, something it has shown no willingness to do.
The cost of intransigence, though, could be high. Partly rooted in corruption, Asia's economic crisis has already contributed to the ousting of Suharto in Indonesia and electoral defeats in South Korea and Thailand.
"The East Asian crisis has given us a lesson that economic reform without social and political reform does not work," says He.
Pub Date: 12/11/98