China's economic reform: causes, guidelines, and basic steps

¶ … China's economic reform

Totalitarianism has oftenly been described as being the most awful movement of the 20th century: it has affected the entire world, it has led to many innocent deaths and it has been against the natural economic development. Even though, in its early beginning, communism has wanted itself to be the proper solution for all the nations that used to dream to equality and peacefulness among people. Despite this fact, Marx's theories had proven to be wrong and, instead of installing peace and stability, they have been the reasons for many years of bloodshed and terror.

Among the countries in the deepest sense affected by communism there has surely been China; this state and its people have seen the totalitarian regime as a form of salvation from poverty and economic insuccesses, and they still see it as such, since they maintained their wish to live within its boundaries in the 21st century as well.

As it might be inferred from above, the communist movement has a long history in China; everything started in 1935, when "Mao Zedong became the leader of communist party. In 1945 after Japanese capitulation the civil war broke out which ended in 1949 by creation of People's Republic of China which was headed by Mao Zedong. The period of Mao's rule was that of experiments in economy, agriculture and social life."

The Maoist Period

Unlike the earlier forms of Marxism-Leninism in which the urban proletariat was seen as the main source of revolution, and the countryside was largely ignored, Mao focused on the peasantry as a revolutionary force which, he said, could be mobilized by a Communist Party with their knowledge and leadership."

The background for Mao's conception is considered to be the Chinese Communist rural insurgency of the 1920s and 1930s, which offered the chance to the Communist Party of China to come to power. That is why, unlike other communist regimes, which were based on industrial development, Maoism was mainly keen on rural change, as the Chinese population was mostly made of peasants. In addition, in the case of the Chinese communism, the military power is also very important, as "political power comes from the barrel of the gun," and it is made of the peasantry itself, which would act in three stages: in the first instance, the peasantry would be organized and mobilized; afterwards "rural base areas and increasing coordination among the guerrilla organizations" would be established and, in the end a transition to conventional warfare would be completed.

The peasantry was as well considered by Mao to be the force which would re-establish the economy: in this framework, in 1957, after China's first Five-Year Plan, "Mao Zedong called for an increase in the speed of growth of "actual socialism" in China. To accomplish this goal, Mao began the Great Leap Forward, establishing special communes in the countryside through the usage of collective labor and mass mobilization. The Great Leap Forward was intended to increase the production of steel and to raise agricultural production to twice 1957 levels."

Even though, the result was not the expected one: peasants were producing too much low quality steel, as they were not qualified workers; moreover, other areas were neglected, a fact which has led to disestablishment of the entire industrial sector and of the agricultural one as well. Similar to other communist experiences, the authorities did not want to admit the system encountered problems so they aggravated the situation by reporting unrealistic production numbers, producing disastrous effects on the economy, which, together with chaos in the collectives and unfavorable climatic conditions, produced great famine and the death of 20 to 30 million people.

Amazing as it might be, these were not the only terrifying measures of the Maoist regime; on May 16, 1966 the "Cultural Revolution" officially began with its purpose of eliminating the bourgeois elements from the Chinese social strata. Other views have put the occurrence of this movement on the fact that it was just another desperate attempt of Mao's to reestablish the authority of the Communist Party, after the failure of the Great Leap Forward. The movement mobilized "not only students but also "the masses of the workers, peasants, soldiers, revolutionary intellectuals, and revolutionary cadres" to carry out the task of "transforming the superstructure" by writing big-character posters and holding "great debates." The decision granted the most extensive freedom of speech the People's Republic has ever seen."

Despite Mao's great attempts, the movement he had produced did not bring anything good to the Chinese people; on the contrary, the economy was seriously injured, and the tendency continued after his death as well. Only after 1976 did the Chinese leaders understand that only through abolishing the people's communes, readmitting family-oriented agriculture, and through a limited introduction of prices and markets would planned economy succeed to function.

The Four Modernizations' Reforms

The immediate period following the ruler's death was, as mentioned above, one of economic failure, poverty and social unrest. However, things started to get better after the Eleventh National Party Congress, on August 12-18, 1977, when Hua was named party chairman, and Ye Jianying, Deng Xiaoping, Li Xiannian, and Wang Dongxing were appointed vice chairmen. The same event represented the end of the Cultural Revolution, the new declared purpose of the authorities turning into building "China into a modern, powerful socialist country by the end of the twentieth century."

The next year, 1978, has indeed brought many changes within the Chinese system, on the educational, cultural and economic plan, despite the quarrels among the leaders of the party. However, they were put an end after the Third Plenum of the Eleventh National Party Congress Central Committee in December 1978. This event is seen as having a great importance for the modern Chinese political history as the old political strategy of the Party was replaced by the Four Modernizations, which would rather account for the economic achievements, instead of the political ones. Moreover, "Deng placed key allies on the Political Bureau while positioning Hu Yaobang as secretary general of the CCP and head of the party's Propaganda Department. Although assessments of the Cultural Revolution and Mao were deferred, a decision was announced on "historical questions left over from an earlier period." In the same framework, the focus was not so much on industry anymore, and the agriculture regained its rights.

The consequences of these changes occurred in a short period of time: "The year 1979 witnessed the formal exchange of diplomatic recognition between the People's Republic and the United States, a border war between China and Vietnam, the fledgling "democracy movement" (which had begun in earnest in November 1978), and the determination not to extend the thirty-year-old Treaty of Friendship, Alliance, and Mutual Assistance with the Soviet Union."

Despite the obvious progress, the events occurring in China were also put under criticism, especially when related to Deng Xiaoping's attempt to condemn the leftist elements in the party and government. Still, at the September 1979 Fourth Plenum of the Eleventh National Party Congress Central Committee at the plenum, party Vice Chairman Ye Jianying declared that the Cultural Revolution was a great mistake of the communist, following in this way the line already drawn by Deng in "seeking truth from facts." This might have been the main reason for the resignations of other leftists from leading party and state posts. The peak of this tendency was the Fifth Plenum of the Eleventh National Party Congress Central Committee, an event followed by the resignation of the members of the "Little Gang of Four" - Mao's former allies - which have been replaced by Deng's allies, Hu Yaobang and Zhao Ziyang to the Standing Committee of the Political Bureau and the newly restored party Secretariat.

Within this structure, a great chance for the economic development occurred: "Profit incentives and bonuses took the place of ideological slogans and red banners as China's leaders experimented with ways to modernize the economy. Farm families were allowed to lease land and grow crops of their own choosing'. The urban sector was improved as well, factories starting to benefit from autonomy and the managers from the liberty to respect their own decisions. Moreover, a new tendency occurred that of benefiting from the country's natural resources; the industry was practically reborn, and a great number of people manifested their interest to work in this domain, a fact which has led to the movement of the population to urban areas. Moreover the population's number reached 1 billion people in 1982, being registered as having an annual rate of increase of 1.4%. The changes and their effects were announced on the international plan as well, and the capitalist countries watched this improvement process with amazement. Moreover, China's international relations were improved through the study exchange programs, as many students were sent to attend a university abroad.

Even though, the rapid transformation of the country could not be made without any sacrifices: all these changes implied high costs, from a political and monetary point-of-view. In addition, the total reshape of the economic, governmental, and political organizations was not seen with optimism by some people and in some institutions, especially by the older generation, who was forced to resign earlier because of the superior power of the more informed and more technically oriented new generation. Despite the high costs the Four Modernizations implied, China succeeded to enter "into the milieu of international bank loans, joint ventures, and whole panoply of once-abhorred capitalist economic practices."

As it might be inferred from above, this task was not an easy one, and China's officials had first of all to convince the rather-conservative part of the population of the necessity of these reforms and of the continuity of the Four Modernizations program. Similarly to the case of other communist movements, the changes had to come from above, so the unity among the mentalities needed firstly to e achieved at the top-level and only afterwards should the belief in newness be spread among the population.

Deng's attempt in this perspective seem to have succeeded, or at least this was the common feeling in the 1980s, when improvements in both rural and urban life became obvious, and the replacements of new methods of decision-making, analyzing and thinking within the boundaries of the political system had been completed. The improvements started to be noticed on the international plan as well and, as a consequence, Chinese products were traded more freely and the commodity market was improved. The prices were calculated with the help of rationale methods, the wages as well and the tax system was changed. These steps in the economic domain remodeled the world's perspective on China, which had the chance to remodel its international position.

Moreover, the cultural life was as well reinvented, some reforms occurring in the scientific, technological, and educational domains. Moreover, the regime tended to legitimize itself by using "a rational body of law and a carefully codified judicial system."

One Country, two systems

Besides the reforms in the economic cultural and political domains, Xiaoping attempted first of all to pay attention to the people's desires, and that is why he allowed Hong Kong, Macau and Taiwan to respect the capitalist principles, whileas the rest of china would have at its basis the communist ones. In his own words, "the concept of "one country, two systems" has been formulated according to China's realities, and it has attracted international attention. China has not only the Hong Kong problem to tackle but also the Taiwan problem. What is the solution to these problems? As for the second, is it for socialism to swallow up Taiwan, or for the "Three People's Principles" preached by Taiwan to swallow up the mainland? The answer is neither. If the problem cannot be solved by peaceful means, then it must be solved by force. Neither side would benefit from that. Reunification of the motherland is the aspiration of the whole nation. If it cannot be accomplished in 100 years, it will be in 1,000 years."