Eagle, I don't want to form an alliance anymore.

He said this assuming the translator was busy transcribing the Russian document he had given him, since the report on the Amur Agricultural Research and Development Consortium did contain a lot of technical terms that required a dictionary to understand.

But he didn't expect that the young translator could also read lips. The translator immediately memorized the sentence and it later appeared in a report he wrote to his superiors.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Over the next ten days, Slava saw a China he had never seen in his reports from Moscow or in KGB intelligence briefings.

The first stop was an ordinary county town in Hebei and several villages under its jurisdiction.

The county town is small. The main street is paved with asphalt, but the alleys next to it are still dirt roads. The dust that rises up falls on the goods of the roadside vendors and they have to cover them with cloth.

Bicycles are the main mode of transportation on the street, and occasionally a truck rumbles by, leaving a trail of diesel smoke.

The state-run department store had enamel basins, thermos flasks, fabrics, and canned goods on its shelves, a wider variety than the state-run stores in Amur, but still too shabby to look at closely compared to supermarkets in Los Angeles.

The village left a deeper impression on him.

Six years after the implementation of the household responsibility system, the countryside has indeed undergone obvious changes. Although the villages here are poor, they are full of vitality.

The streets were swept clean, and newly built brick houses were under construction along the roadside. Some people were raising chickens, ducks, geese, and pigs in their yards. Several young people were riding bicycles along the country lanes, with what looked like a bag tied to the back of their bicycles—perhaps vegetables to be sold at the market or fertilizer bought from town.

Slava chatted with several farmers in a village—his Chinese proved invaluable in the setting, as the accompanying local village officials were clearly both surprised and uneasy about a Russian who could speak fluent Mandarin with the farmers.

He also interviewed a farming family recommended to him by the village officials.

“Back when we worked in the production team, it didn’t matter how much we did, so everyone slacked off. Now that the land has been distributed to each family, any extra load of grain we harvest is ours. Who’s going to slack off now? My family earned over 600 yuan last year just from selling surplus grain—back in the production team, we wouldn’t even get 100 yuan a year.”

In 1984, the average annual income of Chinese farmers was about 350 yuan, and this family's income was already above the average level.

Slava mentally compared this figure to that of Vasily in the Amur region. Vasily earned 2000 rubles a year on his private plot and 1600 rubles a year on collective land, totaling approximately 3600 rubles. The difference was enormous when converted at the official exchange rate, but if compared in terms of purchasing power... it seemed the gap couldn't be bridged?

Because now the members of the agricultural research and production consortia in the Amur region are indeed living better lives than before.

The alliance's agricultural output is also increasing. It handles everything from research and development, production to processing, transportation, and state procurement. If the Ministry of Industry can develop light industry, the alliance may be able to rival the United States.

What Slava didn't know was that he only saw the results, while the costs were hidden in the shadows. The countryside in 1980 underwent a period of order restructuring; since the dismantling of the people's communes, a significant power vacuum had emerged in grassroots governance.

While the household contract responsibility system did grant farmers economic autonomy, it also weakened the social management functions that were originally undertaken by the commune. In some areas, the resurgence of clan power and the rise of local criminal elements are real phenomena. Before the communes existed, farmers didn't need to buy production equipment and fertilizers themselves; now they have to rely on their own efforts.

The weakening of the collective economy also meant a vacuum in the rural public service, medical care, and education guarantee system. A large number of rural laborers began to flow to cities, forming the prototype of the huge migrant worker group that would later emerge.

Unemployment led to increased population mobility, widening wealth inequality, and inflation. Coupled with an imperfect legal system, the criminal rate began to rise sharply.

The nationwide crackdown in 1983 was a response to this social security situation. In the mid-to-late 1980s, with the relative loosening of thought control and the breakdown of traditional beliefs, various forms of qigong craze, pseudoscience, and folk religions began to emerge, coupled with the wave of layoffs in the late 80s and early 90s...

Every family has its own troubles.

In short, family scandals should not be aired in public, and it is highly unlikely that Slava would see the truth through a foreign visit.

...

The last stop on the trip was Heilongjiang.

Slava specifically requested to visit Heihe City—the place he had been looking at from his balcony in Blagoveshchensk across the Heilongjiang River for nine months.

When he stood on the banks of the Heilongjiang River in Heihe City and looked towards the opposite bank, he finally saw the scenery viewed from the opposite direction—

Blagoveshchensk on the opposite bank looked gray and dull in the June sun, with a few Khrushchev-era buildings peeking out from the trees, their corrugated iron roofs reflecting the light.

And the city of Heihe, where he stood—a small city on the northeastern border of China—while not exactly prosperous, was teeming with life:

A cement walkway has been laid on the newly built flood control embankment along the river. Several young people are riding bicycles along the embankment. In the distance, you can hear the thumping of a pile driver at a construction site. A four- or five-story building is rising from the ground.

It was in Slava, Heihe City, that he discovered something that left him with mixed feelings.

While shopping, he and Director Nian passed by a small storefront next to a state-owned store. It was one of those semi-legal, semi-gray trade shops that you can see everywhere in border cities. A handwritten sign hung at the entrance that read "Sino-Soviet Friendship Trade Store" in both Chinese and Russian.

For Nian Dao and Slava, seeing this gray little shop felt like coming home.

They all experienced the era of buying scarce resources on the black market.

The store sold a wide variety of items—Soviet-made vodka, canned goods, military watches, binoculars, and even a few fur coats—these items were sold at the state-set price in Soviet state-run stores, but after being resold to China, the price increased three to five times.

Slava even saw some gadgets that were only issued to military personnel.

He dared to say that if the policy allowed, after the collapse of the Soviet Union, residents along the Sino-Soviet border could even trade a truckload of general merchandise and food for a brand-new T-72.

Goods flowing from China to the Soviet Union—mainly clothing, shoes, daily necessities, and food—also had huge price differences.

The current dual-track system allows some "connected" individuals to obtain large quantities of goods at planned prices and then sell them to the Soviets at market prices or even higher, making profits that are beyond the reach of any legitimate business.

Slava stood in the small shop for about ten minutes, watching a middle-aged man in a leather jacket and a Soviet businessman—presumably from the other side of the river—bargain with calculators and gestures at the counter, eventually settling on a case of vodka and two dozen military watches at a price that both felt they had gotten for free.

"Damn it, this guy's a corrupt official. I'll have to show off my secret little red book when he gets back to China," Director Nian said in a low voice in Russian.

Their KGB memberships haven't been revoked yet.

“It’s not just about officials profiting,” Slava replied in Russian as well. “It’s an inevitable product of the dual-track system.”

As long as both sets of prices coexist, and as long as someone can acquire goods at a low price and resell them at a high price, this kind of reselling will never disappear—no matter how much you try to crack down on it, it won't work.

But that's enough for Slava to start thinking about future reforms for the league.

If the alliance does introduce some form of dual-track system to transition to a market economy in the future, will this large-scale rent-seeking and speculation destroy the credibility of the entire reform?

Old Zhong is bearing this cost, and he can bear it—because their economy is growing rapidly, and the benefits of growth outweigh the losses from rent-seeking, so although the people are complaining, they can generally accept it.

But the league's economy... let's look at the T80 in the distance, everyone.

If a dual-track system is introduced in an environment of slow economic growth, the losses from rent-seeking will never be offset by the gains from growth. The result will not be "some people get rich first" but "some people become corrupt first"!

The people's anger will not be directed at the old system, but at the reform itself.

This realization left him silent for a long time on his way out of Heihe City, so long that even Director Nian couldn't help but ask him what was wrong.

“I’m thinking,” he said, “that maybe we shouldn’t just copy the dual-track system when introducing a price mechanism. Maybe we need to find a different way—a way that won’t create a large-scale rent-seeking space.”

Is there such a way?

“I don’t know. But at least now I know a way that absolutely wouldn’t work here, and that in itself is progress.”

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

At the end of July, Slava and Director Nian flew back to Moscow from Beijing.

After their departure, the Chinese side conducted an internal assessment of the visit.

According to standard procedure, every important foreign visitor is analyzed from head to toe after they leave.

The assessment report was drafted under the leadership of the Department of Soviet and Eastern European Affairs of the Ministry of Foreign Affairs, and incorporated observation records of accompanying personnel, supplementary translated materials, and feedback from receiving units in various regions.

The report was quickly sent to the General Staff:

First, Ivanov belonged to the pragmatic reformists rather than liberals within the Communist Party of the Soviet Union.

He showed genuine interest and appreciation when visiting the sites of reform achievements, but did not reveal any tendency toward wholesale Westernization or rejection of communism. His focus was always on "how to make the existing system more efficient" rather than "changing the system".

Second, Ivanov was unlikely to push for a major opening up or full marketization of the Soviet Union's economy—his concern about the drawbacks of the dual-track system in Heihe and his cautious attitude towards the private sector during his visit to township and village enterprises indicated that he would choose a more gradual and conservative reform path than China.

Third, and most importantly, the report concluded that Ivanov shared many common ground with Director Deng in terms of pragmatism and seeking truth from facts.

He was neither a theorist nor a dreamer; he was someone who would try things out first and then talk about them. Perhaps we could discuss more with him about future Sino-Soviet cooperation.

I need to take leave for my graduation defense.

As the title suggests, I need to prepare for my thesis defense and request a day off.

Chapter 42 Political Turmoil Between Summer and Autumn

Slava and Nian were experiencing a heat wave when they returned to Moscow from Beiping.

The temperature soared to over 30 degrees Celsius at the end of July. The thick walls of the Kremlin, designed to withstand the harsh winter, had become giant heat reservoirs. Although the air conditioning in the corridors was still on, the officials in suits were all drenched in sweat.

Because the struggle between conservatives and reformists within the Communist Party of the Soviet Union had reached a fever pitch.

Slava missed a lot during his six-week business trip, while he was running around with Old Zhong, and the power chessboard in Moscow was undergoing new changes due to Chernenko's deteriorating health.

The confrontation between Gorbachev and Romanov has entered a stage of open power struggle following Chernenko's Politburo meeting in his hospital room.

Grigory Vasilyevich Romanov, 61 years old, Secretary of the Central Secretariat, in charge of the defense industry.

I had heard this man's name, Slava, countless times during my three and a half years in Moscow, but I hadn't paid much attention to it. Perhaps it was because Defense Minister Ustinov and the military reformists considered him one of their own.

Romanov was an important but not the most central figure during the Andropov era, serving as the regional party secretary in Leningrad for thirteen years. In 1983, Andropov transferred him to Moscow to oversee the military industry, and his position in the Politburo was below Gorbachev's.

When Andropov was alive, the competition between the two was suppressed by the authority of the General Secretary. Neither dared to openly challenge the other, because a single word from Andropov could determine their future and escape route.

But now Andropov is gone, and Chernenko, sitting in the General Secretary's chair, can't even manage himself, let alone the two of them!

The 72-year-old's health has deteriorated so drastically in the past few months that he is almost unable to govern, and several Politburo meetings have had to be held in his hospital room.

The Politburo members attending the meeting sat on folding chairs beside the hospital bed discussing national affairs, while the General Secretary himself listened from the bedside, occasionally nodding as a gesture of agreement, but most of the time he didn't even bother to nod.

In this power vacuum, the contest between Gorbachev and Romanov has lost its arbitrator, and now it is an era of winner-takes-all and loser-eat-dust.

Romanov was not simply a conservative.

After carefully reviewing his resume and policy proposals, Slava had to admit that the "Leningrad Model" he implemented in Leningrad was actually a highly efficient industrial management reform scheme.

We will activate production capacity by improving labor productivity, strengthening management, and promoting technological upgrades and information technology applications, while maintaining the Party's overall leadership.

No wonder Romanov hadn't taken action against Slava before, because the two had many similarities in this regard.

In 1975, Romanov invited first secretaries from all over the country to Leningrad for an experience exchange meeting. The young Gorbachev also attended the meeting and reported on his attempts to promote the Leningrad model in Stavropol Oblast.

In a sense, Romanov represented a path of technological modernization within the established system:

Without altering the fundamental framework of the planned economy or loosening party control, the Soviet Union maintained its status as a major power through industrial upgrading and military technological advancements.

This approach overlaps significantly with Ogarkov's military informatization reforms and does not contradict Andropov's policy of "improving the economic management mechanism without undermining the basic system" proposed at the June plenary session.

The military—especially the military-industrial complex—naturally tends to support Romanov because his approach means that the defense industry will continue to enjoy priority in resource allocation.

Previously, when Slava was carrying out military reforms and building a new era of informationized military, the military-industrial complex was not so worried. However, as Slava vigorously promoted policies such as withdrawing troops from Afghanistan, significantly reducing troop presence on the Sino-Soviet border, and reducing military aid to Vietnam, it began to threaten the interests of the military-industrial complex.

The struggle between the military establishment and the reformists is gradually becoming clear.

At the same time, Gorbachev represented a different reform path.

Gorbachev believed that the problems in the Soviet Union were not simply due to inefficiency in management, but rather that there were major problems with the operation of the entire system, and that it was necessary to introduce market mechanisms, expand the autonomy of enterprises, and allow the existence of non-public economic components in certain areas.

This path means a redistribution of resources, from military to civilian use, from central government to local government, from planned economy to market economy... and each "shift" will affect the interests of a large number of people.

It was precisely because Slava understood that forcibly altering the economic pie when reforms were not progressing would inevitably lead to major problems that he did not agree with Gorbachev's political views.

In the past few months, the contradictions between the two lines have been rapidly amplified. Neither side has received clear support or rejection from the highest level, and they can only do their own thing in their respective spheres of influence, which then leads to collisions at the intersection.

By the time Slava returned home at the end of July, the clashes had turned into direct confrontations—Gorbachev and Romanov's factions were vying for power in almost every key area, including cadre appointments, budget allocations, and foreign policy direction. Sometimes, the routine working meetings of the Central Secretariat would turn into debates between the two factions!

The tense atmosphere made the centrist cadres, who were trying to avoid offending either side, extremely uneasy. They wished they could shrink themselves down to the size of a folder and hide away. Many reformist cadres who were unwilling to participate in the struggle turned their attention to Comrade Velikoslav, who had just returned from abroad.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Slava had barely returned to Moscow when he was swept into the eye of the storm.

The issue originated in agriculture.

During his business trip, Gorbachev intensified the pilot program of agricultural research and production consortia in many regions of the Union, exceeding Slava's initial expectations.

Specifically, Gorbachev did three things during his absence:

First, the autonomous pricing power of the consortium was expanded from the original approval document's stipulation of "no more than 15 percent increase" to "no more than 30 percent increase," and the scope of application was expanded from excess output to 20 percent of total output. Furthermore, it attempted to introduce a dual-track system in production.

Second, the consortium was allowed to implement "full profit retention" internally, on the condition that the retained profits must be used for expanded reproduction and employee bonuses. In fact, the vast majority of these profits did not go where they should have gone.

Third, and most unsettling for Slava, is the authorization that allows consortia to "determine the types and quantities of unplanned products to be produced, provided they meet national plan targets."

What do these three points mean together? They mean that these consortia are transforming from "production units with some autonomy within the framework of a planned economy" into quasi-market entities with independent pricing power, independent profit control, and independent production decision-making power!

This is outrageous! Independent organs with their own metabolic systems have grown on the body of the planned economy. If these organs continue to grow, they will eventually react negatively to the host's planned system!

At that point, it will be a life-or-death internal struggle.

Perhaps Gorbachev wanted internal strife to happen, but Slava certainly didn't want to see that happen.

He did not understand why Gorbachev did this, but he had already seen the outcome in Yugoslavia. When a production unit faces both planned and market prices, it will direct its best resources and outputs to the more profitable market channels rather than the less profitable planned channels!

This is human nature, this is capital, and no system can control it!

Slava dares to guarantee that if things continue this way, the quality and quantity of grain purchased by the state will soon decline, while the market-driven portion will become increasingly lucrative.

Even more dangerous is the ability to decide on the types and quantities of unplanned products to be produced. If a large consortium with tens of thousands of hectares of arable land and thousands of laborers can decide on its own what to plant and what not to plant, its influence on the local economy will rapidly expand to the point where it can rival the local party committee. At that time, would you say it is an agricultural enterprise or a "state within a state"?

If you dare to decide what to plant now, you'll dare to defy state pricing tomorrow, issue your own currency the day after tomorrow, and the day after that, the red flag will fall and the Soviet Union will collapse!

Slava met with Gorbachev on the third day after returning to Moscow.

The conversation between the two lasted for nearly two hours.