Zhang Huamei holding her getihu license
Zhang is typical of the background of many of China's first small private businessmen in the first stages of economic reform, who took up commerce out of economic necessity because the government could not or would not find work for them. Many were youth awaiting employment (待业青年); others were newly released from prison.
As the youngest of seven siblings, Zhang Huamei had no hope of landing a regular position in a work unit (单位) -- a government or collective enterprise or institution, since each household was entitled to job placement for only one son or daughter by the state. With the encouragement of her parents, Zhang set up shop in a small room in her house adjacent to the street in the fall of 1979.
At that time people who held regular jobs in work units had social status and were entitled to social benefits such as low-cost housing and medical care. To go into business was considered to be shameful, and Zhang was shunned by her friends and schoolmates.
Business was not easy: in addition to social prejudice there was a lot of competition -- on Zhang's street more than ten families had also set up shop, following her example. Moreover, the Office to Strike at Speculators (打击投机倒把办公室) could accuse petty traders of engaging in speculation (投机倒把) and confiscate their goods. Nevertheless, by selling knitting needles, elastic bands, souvenir badges, toy watches and the like, Zhang Huamei was able to earn over 100 yuan each month, as compared to the typical monthly wages of 20 yuan for an employee of a state-run work unit.
As economic reform got underway, the Office to Strike at Speculators in Wenzhou was reorganized as the Institute of Industry and Commerce (工商所), charged with promoting commodity production and exchange. The Institute announced at the end of 1979 that licenses to legalize commercial activities would be issued. Zhang Huamei immediately applied. She finally received her license a year later, making her the first legally licensed businessman in China.
After Zhang married her neighbor Yu Xinguo (余新国) in 1982, she gave birth to a son and closed shop. Zhang resumed business in 1985, selling beads, the hot commodity of the period. She was so successful that in the following year, she entered the ranks of the 10,000-yuan household (万元户), the standard for the newly rich at that time.
Facing increasing competition as more and more Wenzhou natives entered the bead trade, Zhang Huamei switched to shoes in 1990. Unfortunately, due to her lack of knowledge about the shoe trade, over the next few years she lost her savings and even accumulated debts of tens of thousands of yuan.
After she sold off her remaining stock of shoes in Tianjian, Zhang Huamei returned to her old trade of selling garment accessories, and once again achieved success in business. Her Huamei Garment Accessories Ltd. (华妹服装辅料有限公司) today sells several millions of yuan of buttons, zippers and other garment accessories each year.
Zhang Huamei being interviewed by journalists
Today, as a single shop proprietor with five employees, Zhang Huamei is an ordinary businessman in a nation of many millionaires and billionaires. Yet, as Song Shengfeng (宋乘风), the official who issued her a getihu license back in 1980 pointed out, that license announced the end of an era and the beginning of a new one [ch]. The rise and fall and rise of Zhang Huamei as a businessman epitomize the era of economic reform [ch]. As Zhang reminiscences, just over one hundred individual proprietors in Wenzhou got licenses at about the same time as she did, and the process took a year. The number of individual proprietors in the nation surpassed 1 million at the end of 1981 and 10 million at the end of 1987. Many of those who jumped into the sea of commerce (下海经商) in that first wave became so successful that today they run companies and even conglomerates.
The growth of individual proprietorships reached a peak at the end of the 1990s, numbering 31.6 million in 1999. As a result of cutthroat competition and some enterprises neglecting product quality, the number declined to 25 million at the end of 2006, leading some to predict the demise of individual proprietorships. However, the number rose back up to 27.4 million units by the end of 2007. As of November 2008, there are 285,321 units in Wenzhou. The process to apply for a license at the Industry and Business Bureau (工商局) can be completed in a single day.
The global financial crisis has affected the Wenzhou economy adversely. Yet, entrepreneurs such as Zhang Huamei depend on the domestic market, and may ride out the storm better than those in regions that are export-oriented, such as the Pearl River Delta. She is hopeful that Wenzhou can overcome current difficulties.
MIT professor Yasheng Huang has pointed out that Zhejiang Province (where Wenzhou is located) offers a significantly different model of achieving economic wealth from that of its neighbors to the north, Jiangsu Province and Shanghai Municipality. Although all three administrative units are among the richest province-level units in China, in Huang's words, "Zhejiang is rich because it has grown faster; Jiangsu [and Shanghai] is rich because it has always been rich." In Jiangsu and Shanghai, "the reigning economic model is to court, woo, and placate foreign investors while imposing onerous regulatory and financial constraints on indigenous entrepreneurs." In contrast, "The Zhejiang model is characterized by a heavy reliance on private initiatives, a noninterventionist government style in the management of firms, and a supportive credit policy stance toward private companies. Probably the most famous product of the Zhejiang model is Wenzhou, a city in southern Zhejiang province that today accounts for a disproportionate share of rich entrepreneurs, asset owners, and China's manufacturing prowess." Prof. Huang is likely to share Zhang Huamei's guarded optimisim concerning the future of Wenzhou.
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