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What the collectives still have not been able to rectify is the inequity * between country and city. Free enterprise may flower on the farm, but, with some exceptions, it sputters in urban, heavily industrialized environments. As soon as the government declared last May that the cost of some subsidized goods in 22 cities and provinces should be determined by market forces rather than by state decree, prices surged by as much as 50%. The rise triggered panic buying and brought back memories among older citizens of the hyperinflation that ravaged China in 1949 during the final months of the Nationalist government of Chiang Kai-shek.
Many of the bureaucrats who run state-owned industries have been slow or reluctant to adjust to the new economic climate. As a result, almost a year after the introduction of the urban reforms, China's success stories remain largely rural: almost all the rich wanyuanhu (literally "10,000-yuan households"--roughly $3,510) are in the countryside, as are nine out of ten private enterprises. "Yet without the urban reforms," says a Western diplomat, "the rest of Deng's program will eventually fail."
The reforms' mixed results have made for some uncertainty among urban workers. In a recent poll of 2,500 city dwellers, conducted by the National Economic Reform Institute and Peking University, 75% of the respondents conceded that the price reforms were beneficial, but more than half also said that they would prefer having their salaries frozen. Just as revealing was the response of a worker who visited a Peking library after a stop at the vegetable market. When the librarian suggested that he read a book on the new economic reforms, the man replied heatedly, "I just paid 28 cents for a cabbage"--a hefty sum for someone who may earn $30 a month--"and I don't need any book on the reforms."
As the reformers have loosened the Maoist straitjacket on the economy, they have also permitted greater, though still limited, social, cultural and even political freedom. Their far-reaching education program, for example, is founded on Deng's observation that "if a huge nation with 1 billion people could boost its education, its tremendous superiority in human resources would never be matched by any other country." The government plans to introduce gradually nine years of compulsory education throughout all of China. Until now, such basic education has not been mandatory, and was available only in the cities. Under the new plan, primary and secondary schooling would be controlled not by the Ministry of Education in Peking but by local + authorities, and private schools would be encouraged. Under a reorganization of the university system, students would be charged tuition based on their ability to pay, but after graduation would not be required to take a job offered them by the government. Students who accepted scholarships, however, would be obligated to work where they were told.