The Tiananmen debacle resulted in a brief spell of conservatism, but within a few years, Deng Xiaoping choreographed the rebirth of reform and openness with his historic “southern tour.” With Deng’s assurance that “to get rich is glorious,” entrepreneurial energy exploded again, concentrated now in the coastal cities. The leadership, guided by economic czar Zhu Rongji, enacted a far-reaching structural transformation of the economic sphere, anchored in privatization of state-owned enterprises. Ironically, China’s lack of full reform—especially in the financial sector and monetary policy—protected the Chinese economy from the vicissitudes of hot money and capital flight that ravaged its neighbors during the East Asian financial crisis.
The People Need Freedom
Period:
Rebirth (1990s) | Structural Transformation of the Economic Sphere
Frank Hawke has been working in China for more than three decades. Now working as an independent consultant in the investment banking industry, Hawke served from 2005 to 2009 as the Chairman for Greater China at Kroll, where he focused on due-diligence issues related to corruption for Chinese and non-Chinese clients.
Today Hawke continues to serve as a Senior Adviser at Kroll, while also working with Global Sage to help build out their executive search business in China's financial services sector. Hawke also runs his own consulting firm, Old Pueblo Associates, helping companies map out business strategies in China.
In the early 1980s, Hawke worked as a consultant with several Chinese firms, including the Great Wall Hotel and the Beijing Jeep Corporation. Over a long career in China, he has worked with Citibank, Salomon Brothers China, IMC Global and China Everbright Bank, among others.
If you look at the major cities — and this is one of the areas that one has to be very careful about when talking about China today — China has may faces. And the face that most foreigners see is the face that you see in Beijing, Shanghai, Guangzhou, Tianjin, where you see this incredible change, incredible development and urbanization. And that certainly has been explosive in the last 32 years. On the other hand, you can go maybe 50 miles outside of Beijing, you can go to Shanxi, Gansu, Ningxia, Jiangxi, Guizhou, these places, where things haven’t changed much at all. And I think that’s part of the challenge that still faces the Chinese. That’s one thing, clearly the physical, material changes in some places have been incredible.
I think the most important thing or change that I’ve seen though is the withdrawal of the state from the lives of the average Chinese people. And I think anytime you look at China, especially as a foreigner, it’s important to make a great effort to look at China through the eyes of the Chinese people, not through the eyes of foreigners. I’m irrelevant; here today gone tomorrow. I think, more profound are the changes that have occurred in the lives of the Chinese people, and I think that the role of the state in the life of the average Chinese person has been reduced drastically. I used to say, when I came in 1979, when the standing committee of the Politburo sneezed, the entire country caught cold. Today, when they sneeze, nobody is even aware of it, because people, I think, have so much more freedom to run their lives than they did 30 years ago.
And I think this has been as much about necessity as choice for the Communist Party. I don’t think people got together and said, “Gee, we need to make our people more free.” But, I think they realized that if they wanted to develop a dynamic economy, that certain restrictions had to be eased. People had to have more freedom of movement, people had to have more freedom of information, they had to develop a system of law and that sort of thing, which I think has all redounded to the benefit of the Chinese people. So that is, to me, if people ask me, “What’s the largest change you see?” I think that’s the largest change.
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