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Reckoning
The later 1980s were a period of erratic growth—rapid but unstable. Tigers and sea turtles spurred development throughout the decade: East Asia’s “tiger” economies—Taiwan, Hong Kong, Singapore, and South Korea—paved China’s way in state-led, export-intensive growth. China's “Sea turtles” were the many overseas Chinese who brought capital and knowledge acquired abroad back to their mother country. However, unresolved contradictions lurked in the new political economy of Deng’s China. Frustrations over stalled political reform—enflamed by widespread urban economic grievances over inflation and corruption—erupted in street demonstrations that paralyzed the PRC in the spring of 1989. The Tiananmen crisis would have lasting political repercussions on the cause of democracy—but also unintended economic aftereffects. |
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Overseas Chinese Invest Back in ChinaPeriod: Reckoning (1985-89) | Tigers and Sea Turtles
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Click to expand In other countries, when people get rich, they try to transfer their money out of the country as you can see from Russia. But, thousands of years of home-oriented culture is encouraging the overseas Chinese to invest back in China. It’s every Chinese's belief. So, when China started to open up in 1980s, not many westerners believed: "Your policies are really open? You are really encouraging investment? You are really protecting foreign investments?" But overseas Chinese people, they believed first. So, if we look at the initial so-called "foreign investments," they were not really foreign investment. They were overseas Chinese's investments or investment from Hong Kong, or Taiwan. That amount of capital helped China to start. Also, their successful stories proved to other western investors that the Chinese government's opening-up policy was serious and workable. Then, you see the second round of investments, more from multinational companies, true foreign direct investment.
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