Rule Bending for the Necessary Evil

Chapter 5 investigates the strategies of local officials in places where the sales growth strategy faltered in the early years of reform. An alternative strategy was to tolerate and even facilitate the expansion of private business beyond centrally set limits, as illustrated by the much-studied case of Wenzhou in Zhejiang province. Echoing the prevailing view on the important role of entrepreneurship in early privatization, the chapter goes further to investigate how and why local entrepreneurial forces survived Maoism in the peculiar local setting, and how their interplay with extraordinary economic hardship developed into both a driving force for local policy change and a shield against the political risks that had to be contained. This re-examination of the case material also sheds light on why Wenzhou was an “aberration” and why many “laggard” regions in public-enterprise-led growth did not actively promote private business before centrally initiated ownership restructuring.