I arrived in Beijing on an old Boeing 707 China Air flight in November 1978 after a week in Japan. The entry formalities at Beijing Airport were slow but considerably quicker than the Shenzhen Railway Station where I had previously entered China from Hong Kong. I caught a taxi from the airport to the Beijing Hotel on Dongchangan Jie. Taxis were a new experience for me in China, previously it was the “foreigners bus”. The Beijing Hotel had a long and fascinating history. It was built as a five-story brick building in 1915 and two years later a seven-story French style building was added. In 1954 a new hotel wing was built containing a huge hall for government banquets, and in 1974 the original brick building was demolished and a new twenty-story east wing added. The east wing was the tallest structure in Beijing at the time and was reserved for special “honored” guests. We were assigned to the old wing of the hotel where the room rate was about $20 per day compared to $50 in the new wing.
Significant changes had taken place in China since my first visit in early 1972. Chiang Kai-shek had died in Taiwan (1975) removing China’s bitter enemy from the Revolution. Zhou Enlai and Mao Zedong had died (1976) and the Gang of Four were in prison. Hua Guofeng became Premier of China and Deng Xiaoping was rehabilitated and appointed Vice Premier (1978). China was undergoing great economic change as the country slowly opened up to the western world after thirty years of isolation. Politically it was stable, after the turbulent years of Mao Zedong, but it faced the enormous challenge of changing the bureaucracy and moving towards a more market-based economy. The war in Vietnam had ended and in the United States President Nixon had come and gone. President Ford visited China in December 1975 to meet Chairman Mao and relations between the two countries began to move towards diplomatic recognition, which occurred in January 1979. Australia had established diplomatic relations with China and opened a new embassy in Beijing. There were more cars and buses on the roads in Beijing but there were still thousands of cyclists dodging the fast moving traffic and the newly imported Japanese cars and mini buses carrying foreigners. The English spelling of the names of many of China’s cities and Provinces had changed as the Pinyin Romanization or phonetic system of spelling was introduced. The use of Pinyin was approved in 1958, but not officially adopted until 1979, so Peking became Beijing, Kwangchow became Guangzhou, Mao Tse-tung became Mao Zedong, Chou En-Lai became Zhou Enlai and Teng Hsiao-ping became Deng Xiaoping. The pronunciation was the same.
The Beijing Hotel was next to the Forbidden City and opposite Tiananmen Square and The Great Hall of the People. It was crowded with government and business people and some early tourists to China. Western style breakfasts were available in the hotel restaurant and cold beer was available late in the day in the foyer lounge. Imported hard liquor had not been available in China since 1949 so we carried a supply of duty free Scotch whiskey for the planned room parties.
The lobby of the Beijing Hotel was the meeting place for foreign merchants and commodity traders visiting the government offices located at nearby Erh-Li-Gou. As the main form of communication back to their companies was through cables, the traders lined up at the cable office in the hotel to send their messages late in the day and sat side by side along one wall of the lobby drinking beer while waiting for the reply. A favorite sport of the traders was to watch their competitors leave the cable office, then approach the attendant to ask for a copy of the cable “I just sent”. They were readily handed over. It was an effective way of keeping track of the competition while enjoying a cold beer. Toddy, a long-term China trader, introduced me to this new sport.
Taxis were available from the hotels, called from a telephone in the lobby, but could not be hailed in the street. They did not have meters as there was a fixed rate for each trip. The drivers were honest so there was no haggling over the fare like in Moscow. Traveler’s Checks, predominantly in US dollars or Pounds Sterling, could now be cashed at authorized foreign exchange counters at the hotel but all receipts had to be kept for reconciliation with the currency brought into China on departure from the country. Credit cards were not accepted. There was no English language television, radio programs or western newspapers so information from the “outside world” was limited to conversations with newly arrived travelers. This system generated an atmosphere of comaraderie amongst the traders.
China had introduced a two-tiered currency system with a less favorable exchange rate for foreigners. Hard currency was now converted to Foreign Exchange Certificates (FEC), rather than directly to the RMB (Yuan), to be used by foreigners in hotels, restaurants and stores. The new system ensured that foreigners paid higher prices than the local population for the same goods and services. It also forced foreigners to shop only at places authorized to accept the FEC. The FEC was not popular with the local merchants because there was a different exchange rate for them when they sold the FEC back to the Government for RMB (Yuan). Nor was it popular with foreigners because it restricted them to FEC authorized stores, equivalent to the hard currency stores in Russia, and they paid Hong Kong prices for goods and services. No longer could we hold a cocktail party for forty people for $20 or host a banquet dinner for twelve people for $25 as we previously did in Guangzhou. An active currency black market developed in the streets and small stores in the major Chinese cities so foreigners could exchange hard currency for RMB and pay local prices in shops and restaurants. The challenge was to have the appropriate receipts for the currency reconciliation on leaving the country. A black market developed for the receipts and many goods were exchanged for other goods. Capitalism was beginning to work.
The government meetings were very formal and held in huge rooms with few chairs. The most memorable meeting was with a senior government official in a large, long room dominated by a huge tapestry of the Great Wall of China. The meeting followed the same pattern as all others with the emphasis on developing long-term relationships. Discussions on specific trade opportunities took place separately on an individual company to government basis. The Chinese Export Commodities Fair continued in Guangzhou as the major venue to buy from and sell to China, and the bureaucracy maintained its preference for bi-annual negotiations there rather than ad hoc meetings in Beijing.
In November Beijing was windy and bitterly cold early in the mornings and late afternoons. The air was as dry as a desert, there was no humidity. Even a short early morning run or walk was uncomfortable as I did not have the right clothes. Nevertheless, I enjoyed being out on the streets early in the day and late when people were walking and cycling to and from work. My throat was constantly sore and my skin felt like sandpaper. We drank bottled mineral water (Laoshan) frequently throughout the day and applied skin cream to areas around fingernails and the corner of our mouths and nose where severe cracking of the skin became painful. Occasionally we substituted Tsing-tao beer for the Laoshan.
The change in China since my first visit in 1972 was amazing, it was a different country but yet so much of the old was still there. We were entertained for lunch at the Summer Palace (Yiheyuan) with its large artificial lake and Marble Boat, visited the magnificent Beihai Park with its White Pagoda and Fangshan Restaurant, the Place of Heavenly Peace, Tiananmen Square, the Imperial Palace Museum in the Forbidden City, the palatial home of the Chinese Emperors, and the Great Wall. The most unusual visit was to an underground air raid shelter. Started in 1969 as a shelter for the residents of the Fusui Ching district to “prepare for the war that cannot be avoided” it was built on Chairman Mao’s instructions that China should “be prepared against foreign aggression with an underground Great Wall”. The shelter was constructed ten metres under Beijing and had its own railway station and all the emergency services needed to withstand an air attack. There were hospitals, fire-fighting stations, military barracks, food supplies and beds for thousands of people. The tunnels were 3,000 metres long from north to south and 2,000 metres from east to west. They were wide enough for trains, trucks, ambulances and buses. In some other cities the shelters were larger and deeper. We were told that China was prepared for the inevitable war with the West.
On one of the few days, when we had free time, I walked from the Beijing Hotel along Dongchangan Jie to Tienanmen Square, past the Great Hall of the People to Naxinhua and discovered an old cobblestone street lined with handicraft stores. Liulichang Jie was about a forty minute walk from the Beijing Hotel and the stores were full of paintings, scrolls, calligraphy, stone rubbings, porcelain figures, and ivory and jade carvings. One store only sold Chinese theatre costumes. I wandered the street for an hour, bought some stone rubbing paintings for $2 each, and hurried back to the hotel in time to leave for the next meeting. On future visits I returned to Liulichang, the Beijing Department Store and the Dong Fang Market on Wangfujing Dajie to shop.
The Chinese Government way of communicating to the people and promoting ideas through street posters was still in use. One morning I went for a long walk along Wangfujing and past Tiananmen, the Great Hall of the People and Nanhai Lake to the Cultural Palace of the Nationalities. I noticed a small group of people reading posters attached to a high brick wall near the corner of Xichang’an Jie and Xidan Beidajie. While I was there, the crowd grew larger and people more excited, talking loudly to each other and looking suspiciously at me. The same scene was repeated in Wangfujing. Late in the day, I returned to see more posters on the wall. The crowd had grown and people were holding loud discussions about democracy with each other and the few foreigners who had stopped to read the posters. No one tried to remove the posters from the wall and the soldiers stood silently watching the crowd.
The posters, written by workers, questioned the role of Mao Zedong in the Cultural Revolution and suggested he had supported the Gang of Four. One poster said that unless the people admitted the mistakes of Mao Zedong another Gang of Four could easily take control of China in the future. Yet another reported that in the countryside speeches had been made denouncing Mao and his picture was taken down and destroyed. The main themes were about democracy and freedom for China and its people. It was a remarkable event and within days the crowds were reportedly in the thousands, all jostling to read the old posters, add new ones and join in the discussions about democracy. Still the soldiers did not intervene. The wall became known as Democracy Wall.
Travel outside of Beijing for foreigners was restricted to a twelve-mile radius from the center of the city, except for specific trips to the Great Wall, the Ming Tombs and Fragrant Hills. We were escorted to these historic places and treated as special guests of the government. After a week in Beijing we left for Shanghai, a very different city.