Prisoner Of The State: The Secret Journal Of Premier Zhao Ziyang - Plot & Excerpts
The political fallout is far worse than the actual effect on the economy. Many people now believe the reform program is a failure, and control over the economy reverts to leaders who want to reassert administrative controls. It will be years before things recover. The bank runs and hoarding of commodities led to an overall panic, which arrived with the force of a tidal wave. Every major city was in a tense situation. Criticisms within and outside the Party grew, and people at all levels of authority were under pressure. This caused us to overestimate the seriousness of the economic problems and believe that inflation had soared. We did not use the term “runaway inflation” but called it “high inflation.” In fact, we had not actually analyzed the inflation. We decided to reassert order over economic affairs in 1988. We started to shift emphasis away from reform and toward “adjustment and reorganization.” The intention was to assuage people’s panic, but the effect was extremely negative and in retrospect things should not have been handled this way.
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