360 { China’s Quest
debated and tried in China in the 1980s, East European models of socialism
among them. The delegation to Hong Kong included leading officials from
the State Planning Commission and the foreign trade ministry. It explored
the possibility of expanding cross-border economic cooperation by setting
up an export processing zone at Shenzhen on the Hong Kong–Guangdong
border. This discussion was one origin of what would become the Shenzhen
Special Economic Zone (SEZ) set up the following year.
The investigation mission to Japan in March–April 1978 stayed nearly
three weeks. It included high officials from the State Planning Commission,
the ministries of commerce and foreign trade, and the Bank of China. By
1978, Japan had risen from the ashes of devastating destruction in 1945 to
catch up with the Western countries in terms of technological level and
standard of living. Japan’s government had played a key role in accom-
plishing this amazing recovery, though not via direct bureaucratic control
over the economy as with the Soviet model. Because of Japan’s distinctive
state-business relation, the visiting Chinese dignitaries recognized the rele-
vance of Japan’s experience for China, and sought to understand exactly how
the Japan model worked. In a report to the Politburo shortly after the mis-
sion returned to China, the delegation leader laid out the key elements. Japan
had boldly used foreign technology and foreign capital. It had stressed educa-
tion and scientific research. While in Japan, mission members also discussed
the possibility for Japanese aid and technology transfer to China. Delegation
members were stuck by how enthusiastic Japanese officials and business lead-
ers were about the possibility of expanded Sino-Japanese economic coopera-
tion. This was the first-ever official and high-level visit by Chinese dignitaries
to Japan, and was welcomed by Japanese opinion as a harbinger of a new and
friendlier era of Sino-Japanese relations.
The 1978 investigation missions to Western Europe lasted over a month
(May–early June) and was led by Gu Mu, then the PRC’s third highest-ranking
official dealing with economic affairs (after Li Xiannian and Yu Qiuli). Gu Mu
also had a long history of responsibility for technology matters. The investiga-
tion mission to Western Europe was composed of specialists from different
economic sectors, and separately visited eighty different facilities in fifteen
cities in France, Switzerland, West Germany, Denmark, and Belgium. This
was the first state-level PRC mission to most of these countries, and host gov-
ernments rolled out the red carpet. Mission members were impressed by the
high level of mechanization and automation and the abundant use of com-
puters. In Bremen, on Germany’s North Sea coast, mission members saw the
containerized movement of cargo for the first time. Shortly after the mission
returned to China, Gu Mu reported to the Politburo on the enormous gap
in technology and overall level of development between China and the West
European countries. But he also reported that West European government
and business leaders were friendly toward China and its development effort,