Austin Bay

But micro-economic innovation? Deng sought a micro-economic revolution. Deng wanted Chinese entrepreneur's to fulfill what economist Joseph Schumpeter dubbed the entrepreneur's function: "to reform or revolutionize the pattern of production." The micro-economic opportunity, however, came with the Tiananmen restriction: The Party must remain supreme.

China's first-generation entrepreneurs of micro-economic innovators pulled it off. In 1980 China had a GDP of about $190 billion. In 1998, the year after Deng died, China's GDP topped $1 trillion. In 2013 China has the world's second largest economy, with a GDP of over $7 trillion.

Wei Gu is The Wall Street Journal's "China Wealth and Luxury editor" -- and in 1980 who'd have predicted that job? In a recent article titled "China's Second-Generation Entrepreneurs A Different Breed," Wei reported that the "foreign educated" children of Chinese entrepreneurs are not enthralled with "the endless wining and dining of government officials that is necessary to do business in China." In China, since personal whim still trumps law, businesspeople must constantly curry favor with government officials. It amounts to micro-economic lobbying.

Wei wonders if "second generation" Chinese businesspeople, many of them operating quite substantial industries, will test Party control. Over a decade ago, at a Washington colloquy, I heard a Chinese political expert speculate that young Chinese businesspeople (like Wei describes) are the logical allies of Chinese democratic political modernizers. Both groups understand the economic benefits of a reliable legal system. However, the process of implementing the Rule of Law still remains "long and tortuous."

Austin Bay

Austin Bay is the author of three novels. His third novel, The Wrong Side of Brightness, was published by Putnam/Jove in June 2003. He has also co-authored four non-fiction books, to include A Quick and Dirty Guide to War: Third Edition (with James Dunnigan, Morrow, 1996).
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