Sunflower Seed Seller Extraordinaire

The lead-up to the 2023 Chinese New Year, as the nation happily set about purchasing foods and gifts in preparation for their grand Spring Festival family reunions, saw the passing of one of China’s first entrepreneurs in the reform and opening-up era. The death at age 84 of Nian Guangjiu, founder of the Fool’s Sunflower Seeds enterprise, had negligible impact on Chinese folk below the age of 40. But at the dawn of China’s reform and opening-up drive, he was an iconic figure. His name was indeed featured in the Selected Works of Deng Xiaoping, albeit in the context of the late Chinese leader’s comments in 1984 and 1992 in response to concerns arising from Nian Guangjiu’s small business practices in the course of China’s reform and opening-up.

Nian was born to poor peasants in Huaiyuan County, Anhui Province, during the Japanese aggression. The ravages of war, floods, and famine forced his family to flee their hometown and trek 250 km to Wuhu. There his father eked out a living as a street fruit seller, a trade that Nian inherited as a teenager, after his father’s death.

Upon the founding of the People’s Republic of China in 1949 the illiterate Nian supplemented his living as a street peddler with other odd jobs. But the drive to root out the “remnants of capitalism” that swept the country in the 1960s put considerable economic constraints on owners of small businesses and sole traders like Nian. Having been jailed twice for “speculation” — selling fish in 1963 and chestnuts in 1966 — he nevertheless had no choice but to revert to his only known way of surviving.

Nian eventually learned from a fellow street peddler the culinary craft of frying sunflower seeds. A snack highly popular with Chinese people, it soon proved far more profitable than fruit selling. By the early 1970s Nian had invested all his business acumen in fried sunflower seeds. To maximize their market potential he sampled all his Wuhu competitors’ products, and also traveled to cities as far afield as Nanjing and Shanghai to expand his range of flavors. This market research he used made constant refinements to his recipe, noting his buyers’ comments after each change until receiving the acclamation, “Wow, these seeds are so tasty I’d crack them no matter how swollen my lips are!”

Nian enhanced his customer appeal by adding a free handful of seeds to each purchase. It was this practice that earned him the “Fool” epithet, which he incorporated into his trademark at a time when few small businesses in China had any awareness of brand building.

In December 1978, the 11th Central Committee of the Communist Party of China (CPC) held its third plenary session. It was here that the historic decision was taken to shift the focus of the Party and the country’s work to economic development, and hence to launch the reform and opening-up drive. After years of suppression and prohibition, therefore, small businesses were once more permitted and encouraged in China. However, worried that the new policy would not endure, many balked at taking this plunge. Nian was among the first of the few to take the bull by the horns and set up his Fool’s Sunflower Seeds stall in downtown Wuhu. “Regardless of whether actual or fake opening-up, I needed to do business to feed myself and my family,” Nian said in an interview decades later.

This business-savvy merchant soon expanded his makeshift stall into a workshop employing more than 100 workers. He also gained fame as a nationwide celebrity after being featured in the state-owned Guangming Daily. This fame, however, made him the target of reform skeptics, triggering a national debate over whether or not a person employing so many workers was guilty of “exploitation,” and hence liable for punishment. His case was even brought before China’s top leadership.

Deng Xiaoping, chief architect of reform and opening-up, brought this issue up at the third plenary session of the CPC Central Advisory Commission, convened on October 22, 1984: “The emergence of privately hired labor was quite shocking a while back. Everybody was very worried about it. In my opinion, that problem can be set aside for a couple of years. Will that affect the overall situation? If we act on the question now, people will say the policies have changed, and they will be upset. If you put the man who makes Fool's Sunflower Seeds out of business, it will make many people anxious, and that won't do anybody any good. What is there to be afraid of if we let him go on selling his seeds for a while? Will that hurt socialism?”

Deng mentioned Nian again during his famous inspection tour of south China from January 18 to February 21, 1992. “In the initial stage of the rural reform, there emerged in Anhui Province the issue of the Fool's Sunflower Seeds. Many people felt uncomfortable with this man who had made a profit of one million yuan. They called for action to be taken against him. I said that no action should be taken, because that would make people think we had changed our policies, and the loss would outweigh the gain. There are many problems like this one, and if we don't handle them properly, our policies could easily be undermined and overall reform affected. The basic policies for urban and rural reform must be kept stable for a long time to come,” the visionary leader said.

Such support from the top leader gave Nian, and others in the private economy, assurance and confidence. He accordingly expanded his operation, registered the Fool’s Sunflower Seeds Company, and sold his products to more areas of the country. Nian so became one of the People’s Republic of China’s first millionaires. A Shanghai troupe even adapted his rags-to-riches story into a stage drama, titled The Fool’s March.

It was a march, however, that was as full of highs and lows as the process of reform and opening-up itself. A failed marketing tactic pushed Nian to the brink of bankruptcy, but he managed to get back on his feet. The country has since pressed ahead with reform and opening-up, creating more millionaires — even billionaires — and elevating all citizens’ livelihood to unprecedented heights. The average per capita disposable income in China soared from RMB 171 in 1978 to RMB 32,189 in 2020, and approached RMB 80,000 in Beijing and Shanghai in 2022.

In the process, the private economy has flourished, both benefiting from and contributing to China’s economic growth. Back in 1978 there were only 140,000 individually-owned businesses across the country. Forty years later in 2018, there were more than 71 million — a 500-fold increase.

In April 1988, the National People’s Congress, China’s top legislature, adopted the revised Constitution. It stipulated that the state permits the private economy to exist and develop within the limits prescribed by law, and that the private economy acts as a complement to the socialist market economy, so affirming the legal status of the private economy. In the ensuing four decades, privately owned businesses skyrocketed from 90,000 in 1989 to 31 million in 2018. By August 2022 this number had risen to more than 47 million.

The private economy share in China’s revenues now exceeds 50 percent. The figure for the country’s GDP is 60 percent, that for technological innovation results is 70 percent, and that for urban employment is 80 percent. Meanwhile its share in the total number of enterprises now exceeds 90 percent. The spokesperson of the General Administration of Customs disclosed at a press conference last January that in 2022 private businesses accounted for more than half of China’s imports and exports, so hitting an all-time high of 50.9 percent, while their contribution to the growth of China’s foreign trade was a whopping 80.8 percent.

Having, like Nian Guangjiu’s sunflower seeds stall, started with small, tentative steps, China’s private enterprises now have a strong presence in all corners of the economy. These involve advanced manufacturing, communications, transportation, information technology, and finance. Meanwhile the state is introducing more policies to support them.

A meeting of the Commission for Comprehensive and In-depth Reform under the CPC Central Committee, held on September 9, 2019, and chaired by President Xi, adopted a document geared toward creating a better environment to support the reform and development of private enterprises. The meeting stressed the need to support private business, ensure their equal utilization of production factors through various kinds of business ownerships, and their participation in market competition in an open, fair and just manner that affords equal legal protection.

When delivering a report on behalf of the CPC Central Committee to the 20th CPC National Congress on October 16, 2022, Xi Jinping said, “We must unswervingly consolidate and develop the public sector and unswervingly encourage, support, and guide the development of the non-public sector. We will work to see that the market plays the decisive role in resource allocation and that the government better plays its role.”

This policy was reiterated at the central economic work conference convened in December 2022. Central leadership laid stress at this meeting on equal treatment for state-owned and privately-owned enterprises, policy and public opinion support for the latter’s growth, and protection of their owners’ rights and interests according to law.

In 2018, the 40th anniversary of the launch of reform and opening-up, Nian Guangjiu’s name appeared on the list of the top 100 outstanding private entrepreneurs in the course of reform and opening-up. It also included big names of the Internet age and digital economy, including Jack Ma, co-founder of Alibaba; Pony Ma, founder of Tencent; Ren Zhengfei, founder of Huawei; and Robin Yanhong Li, co-founder of Baidu. Although the wealth and prestige of this sunflower seed seller may be no match for that of such globally known magnates, he is indisputably recognized as an iconic figure of the early years of the country’s reform and opening-up. His is the face of the millions of Chinese people of that time who wholeheartedly supported the new policy and eagerly participated in its implementation, which has elevated China to its contemporary eminence.