"Rich families sell their mules.
Poor families sell daughters and sons.
Our families have no children to sell.
We walk the streets and beat our drums."
—Beggar's ditty from Xiaogang village
China's journey from Communism to capitalism didn't begin with a decree from Beijing. It started with a secretive meeting of hungry men who wanted only to grow more corn. For anyone bedazzled by the "Made in China" labels adorning just about everything they buy and wondering how China's rise as an economic colossus began, the answer lies in the fields tended by a farmer named Yan Hongchang.
In 1978, Xiaogang, Yan's home village of thatched-roof houses on the plains of southeastern Anhui province, ranked among the world's more miserable places. Two decades earlier, Mao had barred private land ownership and forced the peasantry onto communes, aiming to make each commune self-sufficient and render commerce between them unnecessary. Xiaogang's residents were mere laborers. They tended collective fields in exchange for "work points" that could be redeemed for food. But the commune couldn't always grow enough. In the bad years, people starved—and 1978 was a very bad year. Some families boiled poplar leaves and ate them with salt. Others ground roasted tree bark into powder to use as flour. "I sent my wife and four children to roam the countryside begging," says Yan, a tanned man with a middle school education. "Everybody was so hungry, there wasn't even a stigma."
As deputy leader of his village "work team," Yan, now 56, secretly canvassed his neighbors. Everybody agreed that communal farming had failed. Collective responsibility sounded good in theory, but in practice it meant no responsibility. Even in good-weather years, peasants saw little benefit in coaxing marginally bigger harvests from the exhausted land. With the worst drought in two decades then bearing down, says Yan, "everybody felt like we'd been through this before." During the Great Leap Forward of 1958-60, peasants across China had handed their crops to the government as required but received paltry amounts of grain in return. As many as 30 million people starved, and Anhui suffered the worst. In Fengyuan county, where Xiaogang is located, one in four people perished—90,000 in all. "We knew what it was like to starve," Yan recalls, "and we would rather die in any other way."
On the night of Dec. 23, 1978, Yan invited the heads of all 20 of Xiaogang's households to meet after dark at the biggest home in the village. Two were away begging, but the rest straggled in, wearing cotton-padded jackets held together with patches. The hamlet's accountant, who had graduated from middle school, was deputized as the scribe and given a sheet from a schoolchild's notebook. After a short discussion, Yan dictated a terse, 79-character document that outlined China's first privatization scheme. The signatories agreed to divide the commune's land into family plots, turn their production quotas over to the leadership, and keep whatever remained for themselves. "In the case of failure," it concluded, "we cadres are prepared for death or prison, and other commune members vow to raise our children until they are 18 years old."
All knew that even though the Cultural Revolution had just ended, their proposal amounted to heresy. Keeping part of the harvest for personal gain had been forbidden by authorities. Yan recalls that the other menfolk watched as he applied his signature and fingerprint. Two other work-team leaders had promised to share the responsibility by signing their names next to his, while the remaining 15 would sign below. But the pressure got to them. Yan says they instead signed below his name, as did all the others (the illiterate ones just put fingerprints). Yan's neck alone was on the line.
What he didn't know was this: China's emerging reformist leadership, trying to put the country back together after the chaos of the Cultural Revolution, had considered just the type of farming he had introduced—and rejected it. In Beijing, Deng Xiaoping was consolidating power by battling the leftist allies of Mao, who had died two years earlier. But Deng couldn't veer too far to the right without risking attack as a "capitalist roader." Even when he launched economic reforms at a Communist Party plenum in December 1978, Deng forbade precisely the type of household-level farming that the Xiaogang villagers planned to undertake.
Yan's action didn't stay secret for long. In May 1979, the head of his 10,000-member commune accused Xiaogang's villagers of "digging up the cornerstone of socialism." The time had come to seek higher-level support. Yan says he rose before dawn and reminded his wife that, according to the compact, their four children would be cared for if he didn't come back. "He said to tell the children he didn't do anything shameful," recounts his wife, Duan Yongxia. Then he left to find his county's Party secretary, Chen Tingyuan, a man he'd heard was open-minded. After being detained for a day by other officials opposed to the Xiaogang initiative, Yan received an audience with Chen, who had heard of Xiaogang's efforts and had been told that its harvests looked favorable. He promised to protect the village as long as its practice didn't spread.
It did. Villagers across Anhui who saw Xiaogang's peasants go unpunished dusted off their old land markers and reclaimed their fields. Provincial officials sensed a reformist wind from Beijing and lost their urge to stop a movement that promised more food. Only two years later, Chen called household farming "an irresistible wave spontaneously topping the limits" imposed by the government. Similar waves in Sichuan province and elsewhere swept away not just communal-farming methods but the communes themselves, which by the mid-1980s were disbanded and replaced with a "household contract responsibility system" that gave peasants long-term leases to state land and is still in use today. What began as the desperate gambit of a handful of families became a civil-disobedience movement that improved the lives of hundreds of millions of rural Chinese long before Deng's market reforms brought abundance to the cities. In 1983, Beijing approved household contracting for the whole nation. Nowadays in Xiaogang, most families own motorcycles and eat meat regularly. Nobody fears starvation.
Xiaogang didn't capitalize on its first-mover advantage, however. The area never developed the factories that could offer higher-paying jobs, and transportation remains poor. The village got its first paved road only in 1998—and then as a consequence of a sprucing-up campaign in advance of the then President Jiang Zemin's visit marking the 20th anniversary of the reforms. (Officials also threw in a phone in every home.) Today, arguments over who deserves credit for the reforms have cleaved Xiaogang. One village elder—who had declined to sign on the same line as Yan—used family connections to have a billboard-size image of himself meeting with Jiang installed at the head of the new road. "When I see that picture," comments another resident, Yan Likun, "I want to take a hammer and smash it down."
In May this year, provincial officials again descended on Xiaogang. They made speeches while cutting the ribbon on a ranch-style museum commemorating the events of 1978; inside are a replica of the contract (the original was lost long ago), a life-size sculpture of the 18 men signing their document, and a photomontage of the President's visit accompanied by the words: "A day Xiaogang's people can never forget." Yan Hongchang thinks the museum should give more credit to the middle-level officials, like Chen, who put their careers on the line to support Xiaogang. Yan has big ideas for his home: a two-story building—reconstructed with money sent by his children, who have moved to richer coastal provinces—that will have characters on the door declaring, "Road to Reform." Yan plans to turn his house into a rival museum. "Mine," he says, "will show what the peasants did on that night."