The upshot of Deng’s revolution was that those with significant power got significantly rich, those with modest power got modestly rich, and those with no power remained in poverty.

How to Do Business in China

During Deng’s Southern Tour, he coined his most famous catchphrase: “It doesn’t matter if a cat is black or white; as long as it catches mice, it is a good cat.” Deng’s endorsement of market economics stirred a tide of business activity that swept across China and far beyond its shores. China’s sea of business was distinctive because the party controlled everything. Effectively, it operated a great number of shoals that those afloat on the sea had to navigate. Beneath the surface were dangerous waves.

In these rough seas, if you don’t pay for the right to do business, then you are likely to encounter interference from party officials. State-owned enterprises also make doing business difficult. Chinese officials have a real talent for giving people a hard time.

In the story of China’s rise, the unsung heroes are Deng’s “good cats.”

Whom should they pay? In the abstract, party authority, and specifically, party officials — from the former Politburo Standing Committee member Zhou Yongkang all the way down to county and village cadres.

Subterranean streams of the market economy that had been buried for decades broke forth little by little and flooded the socialist dikes. The market economy was incorporated into the party-state, along the way losing the characteristics of truly free choice and competition. Instead the market worked compliantly for the good of the party high-ups: From venture capital to initial public offerings, from signing contracts to quality inspections, this was the way things were done. No exceptions.

Party officials are the body of the party. The new economic order means paying for the services of this body. Entrepreneurs join officials to push up G.D.P. This is not only a good solution for businesspeople, but it also gives officials opportunities to notch up career achievements. In a broader sense, it drives the development of the party-state.

This system of market distortion wrecks livelihoods, wastes natural resources, destroys the environment and threatens calamity for future generations. But political priorities require that such collateral damage be forgotten.