1992 the “wenzhou model” of development and china's modernization

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The "Wenzhou Model" of Development and China's ModernizationAuthor(s): Alan P. L. LiuSource: Asian Survey, Vol. 32, No. 8 (Aug., 1992), pp. 696-711Published by: University of California PressStable URL: http://www.jstor.org/stable/2645363 .

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THE "WENZHOU MODEL" OFDEVELOPMENTAND CHINA'SMODERNIZATION

Alan P. L. Liu

One of the mostsignificantspectsof thepost-Maoeconomicand social developmentf China was the rise of manyen-trepreneurialural ommunities,specially hose longthe eastern oast.Someofthesehad beenpromoted yChineseournalistsnd scholars s"models" moshi)foremulation y otherruralcommunities.1 he term"model" meant hat community'socialand economic rogram estrep-resented he developmental trategy f the current ational eadership.Accordingly,he post-1980 models" had, ndifferentays, chieved hefollowing: rapidrise npersonal ncome, se oftheprofitmotivend the

marketmechanism,pecialization, lexible atterns f ownership,nd reli-ance on indigenous esources.This articledealswith ne of themostfa-mous"models": WenzhoumunicipalitynZhejiangProvince.

One virtue fanydetailed tudy f a subsocietyuch as thepresentneinWenzhou ies ndepictinghenature f the social and cultural ontextwithinwhichdevelopmentnevitablyas to takeplace. Another ossiblegainofa studyike this s to seeWenzhou'sdevelopments a microcosmof Chinese modernization.mportant spectsand dilemmas f China'spolitical nd economic evelopment aybethrownntorelief yan analy-sis of Wenzhou.

Wenzhou nd ItsPeopleLocatedalmost t the midpoint f China's eastern oast, Wenzhou con-sistsof an urbanized rea (488 square kilometers)nd a largeruralregion(divided nto ight ounties) hatwas incorporatedntotheWenzhoumu-

Alan P. L. Liu is Professor f PoliticalScience,Universityf Cali-fornia, anta Barbara.

? 1992 by The Regents f the Universityf California

1. Chen Jiyuannd Xia Defang,Xiangzheng iyemoshiyanjiuA study f modelsof ruralenterprises]Beijing: Zhongguo hejuikexue hubanshe, 988).

696



ALAN P. L. LIU 697

nicipalitynder he new"city dministeringounty" shiguan xian) pol-icy in 1981. The urbanarea is a mere4% of themunicipality's 1,500squarekilometers,s well as one-fourthf thepopulation hat n 1989

stood at 6.4 million. The topographys rugged; 8% oftheterritorysmountainouswiththree anges, ll in northeasto southwestlignment,forming henortheastern,estern, nd southwesternorders nd effec-tivelysolatinghemunicipalityrom herest ftheChinesemainland. ntraditionalimes, he main inkbetweenWenzhouand therestofChinawas by sea. Theplains 17.5% ofthe rea) aremostlylongthecoast andare criss-crossed ithrivers nd canals. Historically,Wenzhou erved sthetrading enter f southeast hejiang nd northernujian and as the

mainentrepot or tradewith argenorthern orts such as NingboandShanghai. The region s poor nmineral esources utrich ncommercialcrops,notably ea, fruit,ugarcane, umber, nd fishing.

SincetheSong dynasty960-1279), thepeopleofWenzhouhave turnedthe area's natural ndowmentsnd geographic ocation nto comparativeadvantage.They specializedtheirproductionn commercial ropsandcrafts-in otherwords, heyproducedforthe market.Rural householdindustrieshrived nd an extensivenfrastructuref ocalmarkets lso de-veloped.Above all, thepeople becamehighlymobile nd skilled n long-

distance rade,which nabledWenzhou osustain larger opulationhanitsgeographynd natural ndowments ould haveallowed. Out ofthissocial and economiccondition rewanother fWenzhou's traditions-outmigration.migrationndlong-distancerade,however, ere lso thepeople's reactions o politicalpressures. Successivedynasties rom heSong totheQing 1644-1912) closed theWenzhouportfrom ime otimein order to stop incursions y Japaneseand Chinesepirates. Conse-quently,Wenzhouese ecame xperiencedmugglers. or thecentral ov-

ernment fChina,then and now, control f Wenzhou has alwaysbeenproblematic.Wenzhouwas burdenedwith a deepening emographic risis n the

twentiethentury,ausedpartly ya rise nmanufacturingndustriesndpartly yan influx frefugeesscaping rom ivil warsand theJapaneseinvasion. From 1906 to 1921, thepopulationn theurbanized rea in-creasedby 148%, and thusWenzhou'semigrationrend ontinued n-abated. In recentyears, or xample, he annualnumber f Wenzhouesemigrantsn otherpartsof China amounted

o 270,000, nd Wenzhoueseconstituted3% ofall Zhejiang mmigrantsn Europe.Wenzhou, r for hatmatter, he entire rovinceufferedrom erious

politicaldiscriminationnderMao, due partly o Zhejiang's beingthehomeprovince f ChiangKai-shek. Zhejianghad thehighest umber femigrantsoTaiwan n 1949,partly ue to itsproximityo Taiwan mak-



698 ASIANSURVEY,VOL.XXXII,NO. 8, AUGUST 1992

ing tvulnerable o invasion ytheNationalists)ndpartly uetoitswayof lifethat was antitheticalo Mao's preferenceorcollectivizationndsocialist nterprises.Mao's administrationnvested ittle nZhejiang'sor

Wenzhou'seconomicdevelopment.Meanwhile, heMaoist collectiviza-tionprogram,whichrequiredWenzhouese o stayput and farm,wentagainst hegrainofcraftsmennd long-distanceraders.Wenzhouwasthefirstocality o resist he stablishmentfadvanced griculturalrodu-cers' cooperativesn 1955-56,2 nd thepeoplenevertotally bandonedtheirwayofspecializedproduction nd long-distanceradeunderMao'srule.

The failure fMao's ruralpolicy o solveWenzhou'sMalthusian risiscontributedothepeople'snostalgia or heir ldwaysof

trade ndtravel.From 1950 to 1982,Wenzhou ed Zhejiang n annualrateofpopulationincrease:2.4% inWenzhouand 1.9% for heprovince,nd in theearly1970s thedemographic ressurewas suchthat n someWenzhoutownsthe sale of women,beggary, nd smuggling ccurred.3By the end ofMao's era,ruralWenzhouhad,by and large,gonebacktoprecommunistpractices.As one 1977press ccountreported,nWenzhou collectiviza-tionhadbeenturned ntoprivate arming,lackmarket merged, ollec-tive nterprisesadcollapsed nd beenreplaced y undergroundactories'

and 'undergroundabormarkets.'4 Againstthebackground f Wen-zhou's distant nd recenthistory ts economic chievementsfter1980were more a renaissancend an evolutionaryrocessthanan economic"takeoff."

Formula or uccessThatWenzhouwasnamed s a national model"wasbased on a numberof mpressive acts see Table 1). The totalproduct fsociety the sum of

thegross utputvalue of ndustry,griculture,uilding rades, ommuni-cations, ransport,ost ndtelecommunications,ndcommerce)ncreasedfrom billionyuan n 1980 to 13billionyuan n 1988 currentxchangerate$1 = 5.35 yuan). From 1978to 1989,Wenzhou's ndustrialutputrosefrom neto 8.9billionyuan. Themostdramatic hangeoccurredntherural reawhere heproportionfthevalueofnonagriculturalroduc-

2. ShangJingcai, angdaiZhongguo i Zhejiang Contemporaryhejiang fChina],vol.1 (Beijing: Zhongguo hehuikexue hubanshe, 989).

3. Wang SijunandWangRuizi,Zhongguo enkou:ZhejiangFengce Chinese opulation:Zhejiangvolume] Beijing: ZhongguoCaizhengJingji hubanshe,1988),p. 170; and LinBai,JinGuowen,Zhou Yilin,andHu Fangsong, ds.,Wenzhou i Juqi RiseofWenzhou](Nanning:GuangxiRenminChubanshe, 987).

4. Xinhuashe Jizhe, "An AlarmingCase of Counterrevolutionaryestoration nWenzhou,"RenminRibao (People'sdaily,hereafterMRB), March22, 1977,p. 2.



ALAN P. L. LIU 699

TABLE 1 Economic Growth f Wenzhou,1978-1989

1978 1980 1986 1988 1989Total product of society

(100 million yuan) - 30.96 87.75 133.8

Gross output value ofindustry nd agriculture(100 million yuan) 18.92 25.48 65.07 94.2 123.13

Gross output value ofindustry

(100 millionyuan) 10.01 14.12 48.21 73.95 89.89Annual average income of

peasant (yuan) 165 508 832 924

SOURCES: Zhang Renshou and Li Hong, WenzhouMoshi Yanjiu [A studyof theWenzhoumodel] Beijing:Zhongguo hehuikexue hubanshe, 990);1989 Zhongguo ingjiNianjian AlmanacofChina'seconomy]Beijing:Jingji uanliChubanshe, 989), nd 1990ZhongguoJingiiNianjian.

tion in the total social product rose from31.7% in 1980 to 67% in 1985.During the same period, the proportion of the labor force employed innonfarmwork in the rural area increasedfrom22% to 38%, and the aver-age income ofWenzhou peasants,which before1980 was among the low-est in thenation,was 50% above thenational average in 1989 (924 yuan inWenzhou as compared to 601 yuan for the nation).5 In 1990 Wenzhouestablished its own exportprocessing zone, the Longwan Export IndustryZone, and opened its first nternationalairport,both constructedmainly

with local resources. For the airport, the centralgovernment ontributed20 million of the total 130 million yuan in constructioncosts and it con-tributedno funds for the establishmentof the exportprocessing zone.6

The key to Wenzhou's success may be summedup in one phrase: adapt-ing traditional nstitutions o modern conditions. Specifically, ts formulamay be described as a combination of "three Ms"-mass initiativeness,

5. Huang Jiajing,TechnicalConditionsna Society's conomy," nLin Bai et al., eds.,WenzhouMoshi Di Lilun Tansuo [An exploration f the theoreticalmplications f theWenzhoumodel] Nanning:GuangxiRenminChubanshe, 987),pp. 100-120;DwightPer-kins nd Shabid Yusuf,RuralDevelopmentnChina Baltimore:JohnsHopkinsUniversityPress, 1984),esp. p. 116; and 1990 Zhongguo ingii ianjian Almanacof China'seconomy](Beijing:JingjiGuanliChubanshe, 990), part v,p. 75.

6. "WenzhouAirport ivesLift oRegionalEconomy,"ChinaDaily,July 2, 1991;"TheRise ofLongwan,"Wenzhou ongxinWenzhoubulletin], o. 13/14 1990), p. 26.



700 ASIANSURVEY,VOL. XXXII,NO. 8, AUGUST 1992

TABLE 2 Household ndustriesn Wenzhou, 979-1988

Year Number1979 1,844

1981 13,231

1982 20,363

1983 39,698

1984 100,286

1985 130,407

1988 150,000SOURCES: HeRongfei,heng ajiong,ndMaJinlong,ds.,Wenzhouingii ejuGen-eral pattern f Wenzhou economy] Wenzhou: Zhejiang Renmin Chubanshe,1987), pp.133 35; 1989 ZhongguoJingjiNianjian,part v, p. 105.

mobility,nd markets-and"one I"-interstices. The "threeMs" corre-sponded o whatoneChinese cholarhad suggested s thethree illars fWenzhou'spost-Mao conomy:household ndustries,ales agents gong-

xiao-yuan), nd market owns,7 ll three f which had thrivedn tradi-tional times. Their vigorousgrowth fter1980 may be due to a re-bounding ffectfter eing ongsuppressed nderMao's rule.

The spirit fmass initiativenessas manifested,irst nd foremost,ntherapidgrowth f householdndustries,s shown nTable 2. Thesein-dustrieswere, n turn,madepossibleby the Wenzhoumigrants orkingelsewheren China. A studyfound hat nitial nvestmentnWenzhou'shousehold ndustriesame from ive ources: income arnedby migrant

laborers, arnings romxportingpecial ocal products, rofits romworkin"undergroundactories,"llowances rom verseas in, nd bank oans.Ofthese he most ubstantialourcewas the ncome rommigrants,8hoalso transmittedital nformationack home oncerninghenationalmar-ket nd new productionechnology. hehousehold ndustrieseliedheav-ilyonthehighmobility fa largenumber fWenzhouese ales agentswhoperformedhemultiple unctionsfsales,disseminatingnformationespe-cially about markets utside of Wenzhou),and contracting"putting-

out").

7. Wu Xiang, "On the DevelopingRural Commodity conomyof Wenzhou,"RMRB,August4, 1986.

8. Zhang Renshou nd Li Hong, WenzhouMoshe Yanjiu Study f the Wenzhoumodel](Beijing: Zhongguo hehuikexue hubanshe, 990).



ALAN P. L. LIU 701

TABLE 3 DesignatedTowns n Wenzhou, 984-1990

County 1984 1985 1988 1990

Leqing 9 14 16 21

Yongjia 6 9 10 12

Ouhai 4 (10) 11 16

Ruian 7 14 16 20

Pingyang 12 12 13 14

Cangnan 13 14 16 18

Wencheng1 4 4 4

Taishun 5 5 6 6

Dongtou 1 (1) 2 2

SOURCES: TingJunqing,Urbanization ndPattern fCities ndTowns nWenzhou,"nZhejiangsheng henshiGuihuaXuesha Lunwenxuan 1985-1986) [Collectionof selectedworks n urbanplanningnZhejiangProvince, 985-1986] ZhejiangshenghenshiGuihuaXueshuWeiyuanhui,986); ZhangRenshou ndLi Hong,WenzhouMoshiYanjiu;Zhejiang-sheng Mingzhengting,d., ZhejiangshengxingzhenquhuaAdministrativeivisions f Zhe-jiang Province] Hangzhou: Zhejiangsheng enminChubanshe, 988); data on 1990 were

supplied omebya Chinese cholar ndwerepartof"internal eference."

The activities f household ndustriesnd the sales agentswere nte-gratednmarket owns hatwere,moreoften hannot,builton thefoun-dations ftraditionalmarket enters.Table 3 showstherapidgrowth ftownsnWenzhou fwhich enwere hemostfamous,achspecializingna particular indofmanufacturingsee Map 1). The new townswere l-most all situated n the coastal plainwhere herewas an abundanceof

rivers nd canals to ease communications,nd theyperformedoth up-ward and downward inkagefunctions.These townswere the meetingplacesfor ocal,national, nd even foreignusinessmen,nd at the sametimewere hebase areasfromwhich alesmen-turned-businessmenrgan-ized householdndustriesnsurroundingillages o producegoods for alein thenationalmarket r export verseas.

The vigorous evival fter 980 of Wenzhou's raditionalnstitutionsfhousehold ndustries,ong-distancerade through ales agents), nd mar-

ket ownswouldnothave beenpossiblewithout killful xploitationy theWenzhouese fintersticesn the Chineseeconomy, ociety, nd politics.Economically,Wenzhouesehousehold ndustries xcelledin producinggoods thatbelongedto the "excludedmiddle,"that is, simple goodsneglected y large-scalemodern ndustrynd especially, ne might dd,



702 ASIANSURVEY,VOL. XXXII,NO. 8,AUGUST 1992

MAP 1 TheTen SpecialtyMarketTowns f Wenzhou

Pujian provincen qL a

* Countyeat~~~~~~R -ein

o SpTonejic mre toIw

---- C~ountynboundary cut /cut

ma >~~~R~ia''S;iaotI

Sve-tl moe ienduty 94suyo he god carie

by Wezhousale gens shwedzheu folwnOopsiin9hrwr

an pline (2%) polyacrlc-ie cothn (2.5) platicbag

9 <;wn~~~~~~cty cl_;)

and watchbands (5.5%), aquatic products (2.7%) processe bo

good*27) plnatishe(. )iad pountyay qts

---- ~Countyoundayunin

(18.5%),~

~ ojuiubagsndplacyardn75)gfbis(.5)utn

good (27%),platic hoe (2.%),and olycryishanrquls n ee

9. Li Reshou and Huang Jiajin, Peasants' LeavingFarming orCommerce," n WenzhouMoshi Di Lilun Tansuo,pp. 171-82.



ALAN P. L. LIU 703

glass frames 2.2%). Wenzhou'sconsumerndustry rewtruly in thecrevices f China'sindustrial tructure."

Socially,Wenzhouese xploited heweakest ink n a Soviet-typeco-

nomicsystem:distributionnd circulation.Wenzhouused its massivenumber f sales agentsto take advantageof this nterstice. olitically,Wenzhouwas at an advantage s its private conomy rew apidly uringa time of "controlvacuum" when thenationalgovernmentad notyetmade the necessary djustmentso a market conomy. Without learguidance rom eijing,ocalgovernmentsere t a lossonhow toproceedin their elationships ithprivate radeand enterprises.Withtheir ongtrading radition,Wenzhoupeoplehad a headstartverother ocalitiesn

taking dvantagef this

politicalnterstice.

The Political ontextWenzhou'sdevelopment,owever, eededmuch trongerolitical upportthan ould be gainedfrom permissiveactor uchas a lag ingovernmen-tal control, or he"Wenzhoumodel"was the furthestf all themodelsfrom ocialism.As notedearlier,Wenzhou's renaissance fter1980wasmainly ue to privatelywned family usinesses nd self-employedalesagents.From1980to 1988the proportionf ndustrialutput y privatefirmsn Wenzhou ncreased rom1% to 41%. 10 It was no wonder hatcriticismsf Wenzhoufrom he"left"havecharged hat Wenzhou'swaywas thewayof capitalism" nd "the commodityconomy fWenzhouwastheeconomic oundationfbourgeoisiberalism."Wenzhouwas ableto have itswaybecauseofa combinationfpolitical actors.

First, t benefitedrom consensus mongnational eaders n 1979-80that mpoverishedreas such as Wenzhoubegiven highdegree fauton-omy ndecidinghepatternffarm r business wnership.Consequently,

peasants npoorprovincesuch as Zhejiang,Anhui, rHenanquickly e-verted o household arming romwhich temmedommercialropsandcrafts ndustries.

Second, nthemid-1980s,ustas itsdevelopmentainednational tten-tion,Wenzhouwon activesupport rom groupof influential ationalleaders, ll known or heir dvocacy fbold economic eforms. hemostimportantf thesewas Wan Li whose personal ieto Deng Xiaopingwasofspecialsignificanceo Wenzhou. Others ncludedZhao Ziyang,Tian

10. ZhongguoMinzhuJianguohuihongyangWeiyuanhui anjiushe, A ComprehensiveLook at Wenzhou'sPrivate conomy," n Guojia "Qiwu" QijianZhongdiZhongguo iyingJingji angjiuKetizhu, d., Zhongguo i Siying ingii:Xianzhuan,Wenti, ianjing China'sprivate conomy: Current ituation, roblems, nd prospects] Beijing: Zhonguo ShejuiKexue Chubanshe, 989),pp. 135-49; Yao Liwenand Zhen Jian, Wenzhouese alk AboutPrivateBusinesses,"RMRB, June19, 1988,p. 2.



704 ASIANSURVEY,VOL.XXXII,NO. 8, AUGUST1992

JiyunPolitburomemberndvice premier), u Runshengdirectorf theRuralPolicyResearchCenterunder he Secretariatf theCentralCom-mittee), nd Wu Xiang (deputydirector f the Rural PolicyResearch

CenterunderStateCouncil). WithDeng Xiaoping'strust,Wan Li hadsuccessfullyromoted ouseholdfarmingnd free uraltrade n Anhui,andhe tooka personalnterestnseeingWenzhouovercoming overtynlikemanner. n 1985Wan promisedWenzhoupartyeaders hathewouldtakeDeng Xiaoping videotape escribingWenzhou's chievementsndhe personallyoured he municipalityn April1986.11

Othernational eaders uchas Zhao Ziyang, ianJiyun, u Runsheng,and Wu Xianghad also visitedWenzhou nd apparently ad formedninformallobby"forWenzhou n Beijing.That n turn etthestageformost significantisit n 1986 by Hu Qiaomu, one of the CommunistParty'stop ideologues nd not a supporterf private wnership.AfterHu's return o Beijing, heStateCouncilannounced hat Wenzhouhadbeengrantedheformaltatus fan "experimentalone." Though n "ex-perimentalone" wasnowhere ear "specialeconomic one,"theformerbestowed n Wenzhou he right o "be free rom herestrictionsftradi-tionalpremises,urrentules ndregulations,ndpolicies fthe nation."Hu Qiaomu's visit to Wenzhou exposedthe ambivalent ttitude f the

"left" mongBeijing eaders.AlthoughHu agreed o thegrantingf "ex-perimentalone" status o Wenzhou,hetried o limittspossiblenfluencein China. He instructedheWenzhou party stablishmento emphasizeeducation n the "two cultures"socialism nd science), adre eadershipin economicdevelopment,evere restrictionsn visitsto Wenzhou byoutside adres, nd moderationnnational ropaganda or hemunicipal-ity.Ofcourse, hetitle experimentalone" indicatedWenzhou'suncer-tainstatus ntheeyesofBeijing'sfracturedeadership.Nevertheless,or

themomentWenzhouhad obtained degreef national

ndorsement,l-

beitof an intangibleype, ndPeople'sDailycarried pecialreportsn thearea's economic uccess.

Third,Wenzhouhad also gained trong olitical upportt theregionallevel. A patron-clientelationshipppearedto have developedbetweentheShanghai nd Wenzhouparty stablishments,ndWenzhouowed itshonorifictheWenzhoumodel"to theLiberation aily,theorganof theShanghai artyCommittee. henewspaper irst eferredoWenzhou s a"model" n a front-pageeport nMay 12,1985, ndsubsequently,t and

otherShanghaimedia collaboratedwith Wenzhou eaders n publishingbooksonWenzhou's chievements,dvertisingtsproducts,nddefending

11. Lin Bai et al., eds.,Wenzhou i Ganbu ThecadresofWenzhou], . 87,and WenzhouDuihualu [Dialogues in Wenzhou] (Nanning: Guangxi Renmin Chubanshe,1987), pp.100-101.



ALAN P. L. LIU 705

it in the faceof attacksfrom he"left."2 MeanwhileWenzhoucadres,sales agents, ndbusinessmen ent o Shanghai ndroves obuysecond-hand machinery,et echnical idbyhiring etiredhanghai ngineersnd

skilledworkers,nd pick up the atestnews on markets nd production.In otherwords, s Shanghai's lient,Wenzhouese btained angible ene-fits rom herelationship,nd Shanghai n turn, s Wenzhou'spatron,used the "Wenzhoumodel"to reap-for themoment-anintangibleene-fit:advocacy f ocal autonomynd a fuller se of themarketmechanismsymbolized yWenzhou. As was well known, hanghai eadersblamedtheir ity's ackadaisicalperformancen the era of reformn too muchpolitical ontrol rom he nationalgovernment.

Last but not east,Wenzhou'srapidgrowth fter 980 was madepossi-ble bya fluid ocal party eadershipnd grassroots olitical upport.Ashad earlier ynasties,oth heMao and Deng administrationsadconsid-erableproblemsnmanagingWenzhou.From1949 to 1984, hepositionof first ecretary f theWenzhouPartyCommittee hangedhands 17times, n averagetwo-yearenure oreach secretary.A major politicalshakeup ccurredn 1981,removing 8 of the 27 leadingmunicipal artyleaders.13 These were mong hepolitical ntersticeshat heWenzhoueseused totheir dvantage.Furthermore,illage cun) levelcadres, eingna-

tives,vigorouslyarticipatednWenzhou'sprivate conomy.For exam-ple,thebookWenzhou i Ganbu,which ecordedmeritoriouseedsofthecadresof Wenzhou npromotingndustryndcommerce,ncluded18ex-amples,one of whichwas from he municipal arty stablishment,hreefrom ounties, ix from owns r townships,evenfrom illages, nd oneunclassifiable. lthough hiswas a veryimited ample, ts nternal aria-tionwas significant.he lower headministrativeevel, hemorenumer-ous werethe nstances fcadres'contributingo commerce nd industry

(note thatdesignatedowns ndtownships elonged o the same adminis-trativeevel). Testimonyrom formerounty arty ecretaryupportedtheforegoingnalysiswhen he said: "I discovered rommy nspectionsthat heprosperousocalities lmost lwayshadhigher roportionsfcad-resengagingncommerce r industryhemselves."14

However, ike the national lite,Wenzhoucadresweredivided ntheirattitudes owardprivate usiness.There weremanycases ofcadres'ob-

12. Referenceso these an be found n the eries f books on Wenzhou ditedby Lin Baiet al., especially: Wenzhou i Juqi,p. 20; Wenzhou i Ganbu, pp. 39 and 230; WenzhouXinfengqingNew social trends fWenzhou] Nanning: GuangxiRenminChubanshe, 987),pp. 35, 118, and 178.

13. ZhengWenyuan nd Jiang aochun, Stories romWenzhou,"Minzhu Yu Fashi [De-mocracy nd rule of aw], no. 8 (1986), pp. 4-17; also Wenzhou i Ganbu.

14. Zhang Guisheng, Seven Explanations n Villages," n Wenzhou uihualu, p. 147.



706 ASIANSURVEY,VOL.XXXII,NO. 8,AUGUST1992

structingrivate ommercendindustry, ainlyntheir ositionsnpartyofficesmanaging ommerce nd industryt county, own, nd townshiplevels. In almost very ecorded aseofcontroversynvolving local busi-

nessman nd a cadre, he atterwasfound o be from ne of thoseoffices.These cadresusually esponded igorously henever eijing aunched neof ts episodic deological ampaigns,uch as the "rectificationfcompa-nies" in early 1985 or the "anti-bourgeoisiberalism" campaign in1986-87. However, heywere weakenedby the ambivalent ttitude o-wardWenzhou of leftist ational eaders, s discussed arlier; heir b-structions ere ntermittentnd failed o thwart he Wenzhouesewilltodevelop.

DevelopmentalonsequencesRapid economicdevelopmentnWenzhou nevitably roduced hostofsocial andeconomic onsequences,othpositivendnegative, ithmpor-tant ocal and national mplications. conomically,hemosttangible f-fect fWenzhou'sdevelopment as a reductionn thenumbersfsurpluslaborers.Before 980,only570,000of Wenzhou's2.6million-strongarmlabor forcewere ctuallyneededto cultivate heavailable and. By 1987household ndustriesnd other rivate usinesses ad absorbed 5% ofthe

surplus abor,15nd someformerlympoverishedounties r townsnowexperienced hortages.

The attractionsfnonfarm ork, owever, erenotconfinedosurpluslaborers.An overalldecline n agricultureccurredn the 1980s,withthree-fourthecreasepermou onesixth f an acre) ininvestmentnfarmlandby Wenzhou peasants. In coastal areas, 30% to 40% of farm andwas no longer eing ultivated,nd Wenzhounow relied ubstantiallyngrain mports o feed tspopulation.16 In view of Wenzhou'shistory nd

Mao's policy,t wasonly o be expected hat hepeasants, iven n oppor-tunity, ould choosenonagriculturalork. And as longas the Chinesegovernmentllowedregional pecializationo proceed, hen t was consis-tentwithcomparative dvantageforWenzhouto import rain. Amongthechief eneficiariesfa rise nnonfarm ork nWenzhouwerewomen.It was reported hat80% of the municipality'sdult femaleswere em-ployed neithermanufacturingr services.A majorcredit or ncreasingfemale mploymentmustgo to Wenzhou'subiquitoushousehold ndus-

tries, nd manynew businesses mployedyoungfemales rommpover-

15. WenzhouDi Juqi, pp. 9 and 72; and Zhongguo ShekeyuanJingjisuoWenzhou-nongcundiaochazu,PushingForwardRural EconomicDevelopment," ingjiYanjiu[Eco-nomicResearch],no. 6 (1986), in WenzhouMoshi Di Lilun Tansuo,p. 233.

16. Chen Jiyuannd Xia Defang,Xiangzheng iyeMoshi Yangjiu, p. 111-12.



ALAN P. L. LIU 707

ished mountainous reas, n somecases constituting0% to 80% of theemployees.7

Someof theeffectsfthe way n whichWenzhoudevelopedwerecon-

troversial,uttheonethathad arousedpublic ndgovernmentaloncernswas income disparity-between egions,professions,tatusof employ-ment, nd typesof employment. egionaldifferencesccurredmainlybetweenconomicallyrosperousoastal reas andunderdeveloped oun-tainous reas. In a surveyf Leqingcountyn 1984, or xample, he ver-age annual ncomeofresidentsf themanufacturingownof Liushiwas986 yuan,while n eightmountainousownshipso the westthe averageincomewas 100yuan.18 As to disparitiesetweengriculturalndnonag-

ricultural ork, heLeqing tudy ound hat mong1,599householdshathad an average nnual ncome f10,000yuanormore, 0% specializednsales,20% inmanufacturing,0% in laborcontracting,0% in services,and5% in othernonagriculturalork.In contrast,he verage ncome fa farming ouseholdwas 600 yuan n 1984. Incomedifferentialetweenemployersnd employeeswas reportedn a studyof50 businessmenn1986; t found hattheaverage nnual ncome femployers as between30,000to 50,000yuanwhile hatof employeeswas 1,500yuan the owestbeing600 yuan). 9 Therehad alsobeen growing isparityetween rivate

and public ector mployees.The averagemonthlyncome fa cadre was100 yuan, heresult fwhichwasmore ndmorepublic mployeesitherleaving or heprivate ector r engagingn private usiness n theside.

Wenzhouesebusinesseswere also criticized oremployinghild abor.No exactestimate f thenumber f childworkerswas available,but arough ountputthe total t closeto 10,000. In a 1985 study fJinxiang,the cradleof the "Wenzhoumodel"-it was the center fproductionfaluminum adges andplasticfilm roducts-itwas found hat483 of the

workers erebetween he ges often nd sixteen,05 ofthem irls.Localopinionheldthat hildrennthe countryside ereeither child farmers"(tongnong)or "child workers" (tonggong). The so-called problemof childlaborersnWenzhou implyxposed hegeneral onditionsntheChinesecountryside,uchas lack of educational pportunitiesorruralchildren,traditionaliscriminationgainst emales,nd thepost-1980 ise nhouse-hold industries.But therewas an anomicaspectto Wenzhou'sdevelop-

17. MengXiaoyun, Notes on Wenzhou'sCustoms nd Tradition:Women,"RMRB, No-vember , 1986,p. 1; Lin Bai et. al., eds. Wenzhou i Sichang Markets f Wenzhou]Nan-ning: Guangxi RenminChubanshe,1987), p. 59; and ZhongguoMinzhu JianguohuiZhongyangWeiyuanhui anjiushi, A Comprehensiveook," p. 145.

18. Yuan Enzheng, d., WenzhouMoshiYuFuyuZilu [Wenzhoumodelofeconomyndits road to affluence]ShanghaiShehuikexue hubanshe, 987), pp. 256-65.

19. "A Comprehensiveook," p. 149.



708 ASIAN SURVEY,VOL. XXXII,NO. 8, AUGUST 1992

ment. Since 1979, henational ress fChina had time nd again exposedthe fraudulent ractices f some Wenzhoubusinessmen,uch as false d-vertising, eceitful ontracts, nd substandard nd counterfeit oods.

Wenzhoualso had its shareofpoliticalgraft, specially n illegalposses-sion or constructionfprivate ouses.

Wenzhou ndChinese ModernizationIn the final nalysis, he significancef Wenzhou's way of developmentextended eyondtsterritory. considerable umber fChinese cholarsheld theviewthat he"Wenzhoumodel"was more pplicable o Chineseruraldevelopmenthan the alternate southern iangsumodel" (sunan),whichconsisted fgovernment-ownedocal enterprises,se of more ad-

vancedtechnology,ndreliance n subcontractingrom tatefirmsnur-ban areas. These scholars ointed utthatWenzhou haredwith hevastmajorityf Chineserural ommunitieshefollowing haracteristics:ongdistancefrommajorindustrial ities, ow levelof savings, udimentaryskills nnonfarmroduction,nd reliance n family-ownednd managedcrafts. Of these, he crucialrole of thefamilywas the most mportantcommoncharacteristicetweenWenzhou and the restof Chinese ruralsociety. "Family,"wrote wo Chinese cholars, was still he mostbasic,

universal,nd versatilenstitutionhatChinesepeoplehad inheritedromhistory;ts survivabilitynd cohesionwereextremelytrong."20Those who held an affirmativeiewof Wenzhou s a model tended o

gloss overthebehavioral omponentf tsformula or uccess-mass ini-tiative,mobility,kills n long-distancerade-which had evolved overcenturies.How manyChineserural ommunities ere quippedwith hiscomponents a mootpoint.Even withinWenzhou hesebehavioral raitswere not distributedvenly;the mountainous ountiesof Wencheng,Taishun, and partsof Yongjia were referred o as Wenzhou's "thirdworld" and notpartof the "Wenzhoumodel." Yet another ossible on-straint n Wenzhou as a model concernsBeijing's reatmentf it. Thefracturedeadershipt the centerhas steeredWenzhou n self-contradic-tory irections.Hu Qiaomu'sambivalentttitude as already eennoted;and after he Tiananmen risis nJune1989,Beijing's nconsistentirec-tionswent venfurther.n thefallof1990,Beijing uddenly orced largenumber fprivate irmsnthetownofLiushi,famed or tsappliances, oclose on thegrounds hatthey urned ut substandard oods. This was

followed y a campaign o exposeWenzhou, argetingalseadvertising,smuggling,nd "yellowpublications."In early 1991,thegovernmenturned round,allowingWenzhou to

stagea specialexhibit f tsproductsnBeijing.At thesametime,how-

20. Zhang Renshou nd Li Hong, WenzhouMoshi Yanjiu,p. 211.



ALAN P. L. LIU 709

ever,Wenzhouparty adreswere nstructedoincrease ropaganda nthesuperiorityfstate-ownedirms.21 fterDeng Xiaopingtoured hespe-cial economiczones in Guangdong n January 992, duringwhichhe

calledonthewholenation o persistn boldeconomic eforms, enzhou'sstar roseagainand Li Pengmadea first isit o themunicipalitynMay1992. This contradictoryreatment yBeijingcould nothavebeen tooreassuring o any rural ommunityhatmay havewished o emulate he"Wenzhoumodel." Moreover,Wenzhouese hemselves eacted o theirprecarioustatus y refusingo reinvest, aking o with bsoletemachin-ery nddilapidated uildings,r leasing quipmentnstead fbuyingt.22In otherwords,Beijing's nconsistentreatmentf Wenzhoucontributed

more o anomicbehavior han t did to thestrengtheningfcollective n-terprises.ThoughWenzhou's role as a model was problematic,ts economic

growth s an empirical acthad definitivemplications orChina'smod-ernization,specially oncerning he nterrelationshipf community,a-tion,and growth. First of all, Wenzhou'sdevelopmenthowed that asmodernizationf a complex ocietyproceeded, o communityould re-mainself-contained;nstead,wholecommunitiesame to play specializedroleswithin he argerwhole. Wenzhounow played wo specialized oles

inChina'smodernization. he first as as a national reemarket. t wasno longerust a regional rading enter, utwas oriented oward hewholeofChina, ndpeoplefrom ll overthecountryame to Wenzhou'sfamedten market owns o trade. Wenzhou's econdrolewas as a linkbetweenChina's "firstworld"and "thirdworld." Wenzhouese layedthe secondroleself-consciouslys they argeted he"thirdworld" of China for heirgoods: isolatedmountainous egions,border ands, and impoverishedcommunities. or example, 1988pressreportaidthat ince 1979 some

40,000Wenzhoumerchants ad arrivednthe southwest order rovinceof Yunnan to open up businesses.23The history f Wenzhou's economicchange since 1949 has demon-

strated he relation fnationalpowerto surplus nd communityuton-omy. In a complexnation uch as China,the tatemust xercise ower norder o transfer partof thesurpluses rom roducingommunitiesopeople otherthantheproducers. By so doing,the state nevitablyn-

21. Lang Lang, "Left-turn f the Wenchow Model, Li Jui-huan eing Hit Quietly,"Chaoliu [Tide monthly], o. 56 (1991), pp. 12-14.

22. Bao Bingzhong nd Xu Dongmin,"An Exploration f the Private Economy inWenzhou nd Its Prospects," hanghaiShifandaxueXuebao Bulletin f ShanghaiNormalUniversity],o. 2 (1990), pp. 1-15.

23. "40,000 WenzhouCraftsmennd Merchants egisterednYunnan,"RMRB, Febru-ary 27, 1988,p. 2.



710 ASIAN SURVEY,VOL. XXXII,NO. 8, AUGUST1992

croachesupon communityutonomy.Butcommunityutonomysbasedon a distinct ulture hat ncompassesmodesof productionndexchange.Theeconomic evelopmentfWenzhou fter 980 showed hat commu-

nity's bility o maintain highdegree f autonomys critical o itscapa-bility oproduce urpluses.Whenautonomys denied nan extremewayas Wenzhouwas underMao, then urplusproduction ecomesproblem-atic.

ThatWenzhouproducedmuchmore urplus fter 980thanbeforewasalso due to a change n thetype fauthorityhatBeijing pplied. AfterMao's death,Beijingemployedwhat one scholar called "venal control"overWenzhou nwhich he tate ndulges communitynorder oobtainpart of

its surplus.This form f

control s mostefficientn

situationsn

which communications etweennational authoritynd communityrevery ifficult.24houghWenzhouproducedmore urpluses,axcollectionby the centerespecially axon profits) as difficultecause of so manyhousehold irms.

The interrelationfpower, urplus, nd autonomymaybe furtherluci-dated byexamining rieflyhe"southern iangsumodel." Because theseJiangsu ownswere situated n an area withmodern ransportationndcommunication, eijingexercised feedback ontrol" over them. This

form f control epends n excellentommunicationso that he tate anreadilymonitor community'sctivity nd, ifnecessary, ommand t.The center's ncroachmentn the autonomy f southern iangsu ownswasmore xtensive hanonWenzhou. As mentionedarlier,outhern i-angsururalenterprises erecollectivelywned-that is, ownedbylocalgovernments. eijing ould counton regular ax revenues rom hese n-terprises,ut on the otherhand,the atterwereburdenedwith hesameproblems ssociatedwith tatefirms: ecliningfficiencynd profit, ris-

ingnumber ffirms peratingt a deficit,nd a focus nwelfarenstead fdevelopment.25hanghai's ponsorshipf the "Wenzhoumodel"was yetanother xampleof its leaders'reaction o Beijing's"feedback ontrol,"whichunderminedhanghai's bility o produce urpluses fficiently.

It is also noteworthyhatWenzhou's utonomywasnot parochial.Af-ter1980,as a result fBeijing'srecognitionfa degreeoflocal "sover-eignty," parochial-typeutonomy rose all overChina in the form flocal protectionism,uchas setting p toll stations nd collecting llegaltransitaxes.Wenzhoudid notresort o suchpracticesince tseconomic

24. FrederickW. Frey, Communicationnd Development" n Ithielde Sola Pool andWilburSchramm, ds.,Handbook ofCommunicationChicago: Rand McNally, 1973),p.385.

25. Guo Xiaomin,Zhou Ruchang, nd Zhang Hongyu, Another ook at the SouthernJiangsuModel,'" JingjiTizhiGaige [Reformf economic ystem], o 3. (1987), pp. 31-33.



ALAN P. L. LIU 711

recovery as dependent n playing specialrole n the nationalmarket.IfBeijing rulywished oadapt thenational conomy radually omarketforces, henWenzhou's"cosmopolitanutonomy" r "open autonomy"

shouldhave been a "model" forother ural ommunities.Finally, ne may see theriseof a new powerbase forChinesenational-ismthat s differentrom he type o which heCommunist arty s pas-sionately ttached. refer othenew market owns nd theentrepreneursof Wenzhou. Chinese scholars have noted that county capitalswereeclipsedby the new market owns, oth neconomic ctivity nd popula-tion size. In these townswere concentratedhe new entrepreneursfWenzhou. It was estimated hat amongthe 600,000to 700,000peopleemployednhouseholdndustriesr otherbusinessesn the tenspecialty

market owns, ne-fourth ere expertsn commercend management.26These newentrepreneurs,mall firms,nd small towns f Wenzhoumaywell contributeo economic nd politicalpluralism,ocialmobility,ndtheemergencef a newmiddle lass, giving iseto a nationalism ttachedto socioeconomic evelopmentather hantopoliticaldeology.The newnationalismhatWenzhouese ymbolizes similar othenationalism fthe"newly ndustrializingountries" f East Asia.

ThoughWenzhou howedportents f a newnationhood,t alsobrought

symptoms f disorganizationn theanomicaspects of its development.Butthese houldbe understoodn a proper erspective. irst f all,socialand economicdeviances ccurred ll overChina,almostalwaysafterdecline r collapseofa centralistndbureaucraticegime nd partly ueto thenature f thatregime.Second, ome ofthe deviances nWenzhouwere, s noted arlier, ausedby Beijing'snconsistentreatmentndlegis-lation hatwas inadequate oprotect herightsfprivate usiness.To thisday,Beijinghas notenacted uch a law although here s regulation fprivatebusiness. Third, omedevianceswerepossibly aused by inade-quatecompetitionnthenationalmarket ndsevere emographic ressureinside Wenzhou. These would probably iminish s other ommunitiesbegancompetingwith Wenzhou n crafts nd lightmanufacturingndoutmigrationeduced verpopulation.

Butthemost ntractable roblemwasBeijing olitics. n a larger ense,Wenzhouwas a testofBeijing's bility o make a hardchoicebetweencentrally lannedand a market-basedconomy nd between politicaland a socioeconomicnationalism.UntilBeijingdecides,Wenzhou and

much of ruralChinawillpersistn seeking livelihoodnthe nterstices,with ll its merits nddemerits.

26. ZhangRenshou nd Li Hong, WenzhouMoshi Yanjiu,p. 202.

1992 the “wenzhou model” of development and china's modernization

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