China: Taking a Fancy to Capitalism

Peking’s courtship with capitalism keeps getting stronger. The Communist government announced last week that for the first time in 35 years consumers would be allowed to buy goods on the installment plan. The ruling regime will also encourage an increase in the country’s beauty parlors, tourist attractions, gymnasiums, catering services and other businesses. These enterprises are part of Leader Deng Xiaoping’s program to expand the Chinese economy by introducing a bit of individual initiative.

The latest incentives come one month after the first sale of stock since 1949 in Shanghai, the city that once was China’s commercial center. Starting at 3:30 a.m. last Jan. 14, more than 20,000 people lined up for a chance to buy at least one of 100,000 shares offered by Yanzhong Industrial Corp., whose products range from clothing to copiers. Investors paid about $18 apiece for the shares, which will retain their initial value while paying annual dividends of about 13%, compared with the bank savings-account interest rate of 5 3/4%. Although the shares can be resold only to the company or the Bank of China, the January offering has stirred cautious discussion about reviving the once thriving Shanghai stock market.