Ringing the changes

PUBLISHED : Monday, 01 December, 2003, 12:00am
UPDATED : Monday, 01 December, 2003, 12:00am

Recently, I awoke to find my phone line had been cut off. The recording at the other end said I had not paid my bill, and the line would only be reconnected once I did.

Using my mobile, I rang China Railcom, my state-owned telecom provider, to discover that I had not paid 56 yuan (HK$52) for November. Other nations may wait two to three months before disconnecting a non-paying customer, but here in China, telecoms providers cut off consumers who are only a few days late.

'We called you last week, no one answered,' the woman clerk explained. 'That's why we cut off the phone.'

'I wasn't home when you called - why don't you issue a monthly bill?' I asked. 'This way, I know how much I need to pay and will pay on time.'

'We don't have the ability to issue paper invoices,' she snapped. 'You just have to come to our offices to pay the bill each month from the 10th to the 20th. Otherwise we cut off your line. It's as simple as that. That's the rule.'

Seething with anger, I felt like yelling at her. But I knew it would do little good. I smiled instead and muttered under my breath: 'Just watch. The market will wipe out China Railcom if services do not improve down the road.'

China is in the midst of a massive sell-off of state-owned enterprises, and it is great news - not only for domestic private entrepreneurs and foreign investors, but also for consumers. With privatisation will come competition, and with competition will come improved services and service attitudes. Poor performers will die.

The State Assets Supervision and Administration Commission recently held a landmark conference in which officials explained to private and foreign investors how they could begin taking over state-owned enterprises.

With few exceptions, the bulk of the 100,000 large-scale state-owned enterprises will be on the auction block. Ownership of most of the 200,000-plus smaller scale state-owned enterprises has changed hands in the past two years, but it is the larger ones that really matter in terms of economic scale. These 100,000 enterprises employ more than 50 million workers, and for years were the heart of the party's grip on the economy.

Beijing will maintain a controlling stake in 196 major enterprises, but the majority will also be listed or partially owned by private and foreign players.

The era of bad service and bad attitudes is coming to an end in China. It may still take years for this transition to take place, but the movement afoot is irreversible and the implications are clear: China is well on its way to a capitalist, market-based economy.

The only difference, of course, is that the party will be in charge, one that, on paper, adheres to both the Marxist-Leninist theory of 'class struggle, dictatorship of the proletariat' and the pragmatism of the Theory of the Three Represents, which in effect ushers the party into an era of capitalism.

This massive privatisation is getting scant coverage in the official media, however, and the word 'private' is seldom mentioned in mass circulation publications and on TV.

'The fourth generation leaders are promoting capitalism and the private sector, but they're not saying they are doing this,' a reporter with the Economic Observer told me. 'That's because they're still afraid of a backlash from old leftist revolutionaries who are still alive. Many are angry that millions of them died fighting the Kuomintang and capitalists in 1949, and the party is now returning to capitalism, the very system they fought to overturn.'

It cannot be too long before the last remnants of the old Red Army die out. Perhaps, someday down the road, even the party itself may be privatised.