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Tales from the Development Frontier
and state industry output were well below their shares in overall population and GDP. The share of state industry in Guangdong's GDP trailed every province except backward Yunnan. The ratio of the investment share to the population share (and therefore cumulative fixed investment per person) in Zhejiang was the lowest of any province. Other provinces, by contrast, particularly Beijing, Tianjin, and five northern and northeastern provinces (Heilongjiang, Jilin, Liaoning, Neimenggu, and Shanxi), had concentrations of investment and state industry that were consistently higher than their shares in population or GDP.2 Beijing is the extreme case: its share of both investment and state industry output is more than five times its population share and more than 50 percent above its share in GDP. Worker Skills: A Reorientation to Serving Customer Needs China entered the reform era with a labor force that was generally healthy, literate, underused, and eager to exchange hard work for a chance to attain higher living standards. The 1982 population census reported a rate of 95 percent literacy among youth aged 15–24. China’s development of light manufacturing thus benefited from a favorable combination of low wages and a well-educated cohort of young workers, as had been the case in Japan; in the Republic of Korea; and in Taiwan, China, in earlier decades. Despite the spread of basic education, two decades of international isolation had deprived Chinese workers of many types of economically useful knowledge and information. In addition, the era of central planning had dulled incentives by separating effort from reward and inculcating a culture of slacking and corner-cutting. A study of Guangdong’s early reform experience found that “China lacked staff who could use, maintain, service, and repair modern machinery, let alone install, adapt, improve, and redesign it as personnel … in other East Asian countries could” (Vogel 1989, 144). Despite frequent repetition of slogans such as “serve the people,” decades of socialism had severely eroded the notion of customer service. Personnel in stores and restaurants were typically rude, even abusive, to patrons. In industry, poor service took the form of widespread neglect of quality, specifications, delivery times, and other customer requirements. Shipping products with small defects was standard practice.