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COPYRIGHT 2006 The Institute Inc.
Introduction
In the People's Republic of China, between 1949 and 1978, those who indulged in entrepreneurial practices were both officially punished and socially condemned for "taking the capitalist road." Yet beginning in 1978, the Chinese ruling party-state began a policy of "reform and opening up," launching a new age of "market socialism." Over the next two decades, in fits and starts, entrepreneurship and "doing business" became legally permissible and socially acceptable. By 1998, 8.7% of the national labor force were self-employed businesspeople: 10.9% in urban areas (China Statistical Yearbook 1998). This enthusiasm for entrepreneurship contributed greatly to China's phenomenal economic growth during this period (Hsu 2005). What did it mean to the Chinese to be an entrepreneur, after listening to decades of propaganda against this profession?
China's market socialist experiment offers an opportunity to see how the meaning of entrepreneurship and the status of entrepreneurs has changed over time. My research, which took place in the northeastern city of Harbin at the turn of the century, reveals that entrepreneurial status was negotiated and contested in a dialogue between the state elites who create policies, and the ordinary citizens who live those policies out in everyday practices, against a backdrop of circumstances increasingly determined by market forces. State policies divided Chinese entrepreneurs into three legal categories: (1) chengbao cadres who became de jure and de facto entrepreneurs in charge of privatized state firms or spinoffs, (2) getihu petty capitalists who ran small businesses with less than seven non-kin employees, and (3) shangren (businesspeople) who had firms larger than the getihu limits. I discovered, however, that Harbiners ignored the official definition in favor of a local or cultural definition that draws upon two competing hierarchies: one based in state socialist redistributive economy and the other in an emerging notion of "quality" (suzhi) connected to human capital and development.
Site and Methods
The research for this paper comes from a larger study about the changes in workplaces and occupational status in post-socialist China, which took place from 1997-2001, with follow up research in 2004. The site of my fieldwork was Harbin, the capital of Heilongjiang Province, a post-industrial city of three million people located in China far northeast. Most scholarship on urban China has concentrating on four regions, centered on Beijing, Hong Kong, Chengdu, and (most popular of all) Shanghai (Jankowiak 2004b: 118). This bias, which may reflect the Western scholar's preference for the PRC's most comfortable cities, skews our view of China by focusing on its most economically wealthy and globally connected urban areas. In contrast, Harbin was a center of heavy industry which flourished under the socialist command economy in the 1950s and 1960s. Like its Rust Belt equivalents in Detroit and Buffalo, it struggled in the 1980s and 1990s under the new economic regime of "flexible accumulation" (Harvey 1990). While aspiring businesspeople in China's southern and eastern coastal cities made connections with potential investors, partners, and clients in Hong Kong, Taiwan, Japan, and Korea, Harbin's geographical location meant that their first foreign relationships were with Russians. Although Russian traders poured over the border after 1991 in search of Chinese consumer products, these members of the former USSR were unable to offer the financial capital or the business experience to Harbiners that their Japanese, Taiwanese and Hong Kong counterparts were investing into China's coastal boomtowns.
In 1997, the proportion of Heilongjiang's urban residents still working in the state and collective sectors (81%) was higher than the national average (69%), though not the highest in the nation (China Statistical Yearbook 1998: Table 5-4). Moreover, only 4.1% of the province's urban workforce was employed in foreign, joint venture, or private companies (the so-called sanzi firms), in contrast to the national urban average of 5.4%. Statistics from 1995 reveal that the proportion of contract employees was also quite low in Heilongjiang, a sign that fewer state and collective enterprises had taken on market characteristics than in other areas. However, the number of household businesses, or getihu, matched the national average (16.6% of the working population), indicating that Heilongjiang's urbanites were neither especially reluctant nor unusually eager to take advantage of the new business opportunities (China Statistical Yearbook 1996).
Between 1997-2001, I conducted participant observation fieldwork at 20 workplaces in Harbin. In these endeavors, and later in my more structured interviews, I was aided by some characteristics of the Chinese urban workplace which may seem unusual to anyone unfamiliar with the PRC. First, Harbin workplaces tend to be open to non-employees wandering about. Chinese social institutions of personal connections (guanxi) make it perfectly acceptable for a stranger to be in an office or factory as long as she is a friend of an acquaintance of a friend (and so on) of someone who works there. Second, in every workplace I visited, people dropped whatever they were doing to chat with me for an hour, or even much longer. The Maoist legacy of full employment in urban areas combined with China's enormous population has conspired to create a situation of underemployment, where too many employees have too little to do at work. This situation was exacerbated during the time of my research by extensive state sector layoffs and a crackdown on smuggling which closed many of the border stations between heilongjiang and Russia, both of which reduced the supply of clients and customers for many of Harbin's private businesses.
Six of these workplaces were private firms, joint ventures, or franchises, and five more were state firms which had been "marketized" to the point that they operated as independent firms. Two of the workplaces were open markets, where self-employed small business owners gathered to sell their wares at rented stalls. The other seven workplaces were more "traditional" socialist organizations, such as government agencies, universities, and "un-reformed" state factories. I also formally interviewed 81 working adults, including 27 people who were self-employed. Respondents were interviewed initially in 1997-1998, with some follow interviews in 2001 and 2004. Because I did my research in two of Harbin's more established markets, most of the self-employed I met were locals, not people from the countryside who had migrated into the city to start businesses.
What is Mr. Z? A Story of Contestation
To illustrate how the categories of "cadres," "getihu" and "businessperson" were used in 1990s Harbin, I offer the story of Mr. Z, the founder and leader of the University New and High Technology Business Group. In 1992, Harbin's most prestigious university asked Mr. Z, a former cadre, to launch the Technology Business Group as a market venture (Hsu 2006), a for-profit entity whose initial purpose was to enrich the school's coffers by capitalizing upon the technological innovations of the faculty. Although the firm was attached to a state university, it received no government funds other than the kinds of tax breaks and incentives which were also legally available to private firms. Its employees were not part of the state hierarchy; indeed Mr. Z had to leave his position in the party-state bureaucracy to start the firm. In other words, Mr. Z founded, organized, managed, and was legally responsible for the Technology Business Group. He was its entrepreneur.
By 1998, the firm employed hundreds of employees and was involved in multiple industries, including real estate, construction, retail and manufacturing. The company had gone public, and the stock price was rising. The centerpiece of this sprawling entity was the 28-story Administration Building, a gleaming white tower which arched over a street and loomed over the neighborhood. During my fieldwork I did translation work for Mr. Z and his assistants, lived in one of the Business Group's apartment buildings, shopped regularly in its department store, and bowled in its bowling alley. I also formally interviewed 16 employees working in three areas of the firm: the central administration building, the industrial factories, and the department store.
The Business Group's offices occupied the prime locations at the top of the Administration Building. Men (predominantly) and women in fashionable suits rushed about, working longer and harder hours than I saw anywhere else in Harbin. There, a former professor of mine introduced me to Mr. A. A round man in middle age with a cheerful and chatty demeanor, Mr. A was a high-level administrator and member of the Board of Directors. Like many of the employees in the Administrative Building, he spoke of Mr. Z with gushing admiration bordering on worship. (I eventually discovered that the further away the employee was located from the Administrative Building, the less impressed he or she was with Mr. Z.) Mr. A, who had previously worked at the University, was thrilled to work at the Business Group, he explained, because Mr. Z "is doing something really glorious here."
Later in the interview, I asked him whether he admired businesspeople or entrepreneurs. He immediately drew a distinction between "real entrepreneurs" like Mr. Z, and the run-of-the mill getihu:
[I admire entrepreneurs.] But out there, there are a lot of people who can't be called entrepreneurs (qiyejia). They're just small, small getihu.... Getihu and entrepreneurs aren't the same thing. I look down on those getihu. People will ask me, what will you do after you retire? I say, even after I retire, I'm not going to become one of those getihu, selling some clothes or vegetables or whatever to make a little cash. I'll stay home and baby-sit instead. I can't respect them, those getihu.
For Mr. A, the self-employed could be divided into two occupations: petty capitalist getihu and true entrepreneurs, like Mr. Z. However, as I continued my research at the University Business Group, I soon became aware of a third category. Outside the top floors of the Administration Building, no one ever described Mr. Z as an "entrepreneur" or "businessperson." Instead they called him a "cadre," as though he was a government-appointed bureaucrat at a state factory. Indeed, most Harbiners, including Mr. Z's own employees, seemed to believe that the University Business Group was a state firm. The employees at his department store...
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