Steve Chapman

SHANGHAI --You know those time-lapse videos of sunflowers sprouting, zipping straight up and bursting into bloom in the space of a few seconds? While flipping the TV channels in my hotel room, I saw a Chinese-language ad featuring a new variation: an entire city of skyscrapers popping out of the ground and rising heavenward at a miraculous speed.

Maybe that ad was created with modern technology. Or maybe it was just a real-time video of what has happened here in Shanghai. It has transformed itself from a decaying industrial city to a gleaming, futuristic metropolis in the historical equivalent of the blink of an eye.

The gaudiest results of the metamorphosis lie in the area east of the Huangpu River. That area, known as Pudong, is the home of the Shanghai Stock Exchange, a magnetic levitation train that goes 250 mph and, a year from now, Expo 2010 -- what we used to call a world's fair. Its annual economic output of $38 billion surpasses not only that of most cities but most countries. Yet fewer than 20 years ago, it was a sleepy farm region dotted with rice paddies, offering a lovely home for frogs.

Given its proximity to one of China's biggest cities, what has happened may sound natural and inevitable in retrospect. It wasn't. As long ago as the 1950s, I'm told, Shanghai's first communist mayor, Chen Yi, used to lament that such nice real estate couldn't be developed because it was on the wrong side of the river.

What kept the area backward was the economic system he served: communism. What freed its potential was removing the shackles imposed when Mao Tse-tung and his party gained power in 1949.

Since its inception, the Chinese government has carried out some gigantic economic experiments, most of them catastrophic. In the 1950s, Mao launched a crash program in industrialization that devastated the economy and caused some 15 million people to starve to death.

In the 1960s, he initiated the Cultural Revolution, which encouraged violent rampages by young ideological fanatics and banished anyone with an education, above-average skills or managerial experience into the countryside to shovel manure. Results: more economic destruction and millions more dead.

But in 1979, the government decided to try a different approach: creating special zones where normal markets would be permitted to operate. They called it "socialism with Chinese characteristics," but it looked an awful lot like capitalism. The one in Pudong was created in 1990.

This time, disaster failed to ensue. On the contrary, the broad reversal succeeded beyond Ayn Rand's wildest dreams.

Steve Chapman

Steve Chapman is a columnist and editorial writer for the Chicago Tribune.

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