The Second Chinese Revolution

E. Bregolat

• Publisher: Palgrave Macmillan
• Year: 2016
• Print ISBN: 9781137475978
• eBook ISBN: 9781137475992
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

The Second Chinese Revolution explores some of the keys to understanding China, a country whose evolution already affects all of us. Beginning in 1978 - when China's GDP was only 6% of the USA's - the author takes us through the different aspects that have played a fundamental role in the country's change: China's eruption in world markets in the background of the West's economic crisis; its obsession with science and technology and its relentless march towards a 'knowledge society'; and a reassessment of the Tiananmen Square events of June 1989 and the ongoing debate on political reform. The book also includes a comparative analysis of the reforms in China and Russia in the last decades.

1

On the Colours of the Cat: Deng Xiaoping’s Thought

1. Deng Xiaoping and the modernisation of China

For countless centuries, China was in the vanguard of civilisation and the richest country in the world. Its GDP has been bigger than that of any other country for 18 of the last 20 centuries. In the thirteenth century, Marco Polo described the splendour of the Cambaluc (present-day Beijing) of Kublai Kan, whom he considered “the most powerful man in land, armies and treasures ever to have existed, from Adam to the present”. At the end of the eighteenth century, Lord McCartney, ambassador of the British King George III, visited Beijing and estimated that the income of the Emperor of China was equivalent to two-thirds of the income of Great Britain, and that China’s was four times greater. In 1820, with the Industrial Revolution in full swing and the decadence of Qing China already well advanced, China accounted for around 30% of global GDP.

From the last third of the eighteenth century onwards, the Industrial Revolution set the course of universal history. Since then, its presence or absence has determined the power of nations. Meiji Japan opened up to the outside world and began its industrialisation in the mid-nineteenth century. China, convinced of its superiority and withdrawn in contemplation of its past glories, only came to understand the phenomenon too late to join the group of the advanced countries. One anecdote provides a graphic illustration of this attitude: in 1773, Emperor Qianlong accepted hundreds of boxes of scientific instruments brought by McCartney as the gift of the British monarch George III, but announced that China was self-sufficient. Not only did it not need anything, China did not even wish to trade with other countries, to which it would only open up two ports in the extreme south of the country. Things had not always been like this: many centuries earlier the Silk Road witnessed a China open to contact with the outside world and international trade. But China did not use its inventions, including gunpowder, the compass and trans-oceanic navigation, to subjugate other countries. Quite the opposite, it built the Great Wall, 4,000 kilometres long, to isolate itself from the “barbarians”.

After missing the train of the Industrial Revolution, China found it had become a “peripheral” country, like Russia and Spain, among others. The British had finally managed to achieve by foul means what they had not got by fair: to open up Imperial China to international trade. The image of China’s wooden boats being sunk by British steel warships in the First Opium War (1840–1842) was a reflection of China’s technological backwardness with respect to the industrial countries and of its traumatic awakening to modernity. Under the Treaty of Nanking (1842), China surrendered five ports to international trade, and the system of “concessions” was set up, by which China de facto lost its sovereignty over part of its own territory. The resulting semicolonial situation was a bitter humiliation. Since then, Chinese history has consisted of a series of attempts to achieve modernisation and make up for lost time.

The first of these attempts occurred in the final decades of the nineteenth century. As in all “peripheral” countries, forces allied to tradition and opposed to progress were the main obstacle for agents trying to modernise the country. Neither Li Hungchang, at the time the main representative of attempts at modernisation, nor his followers managed to bring science and technology into the curriculum alongside classical texts in imperial examinations. Empress dowager Cixi never gave them her support.

The Qing dynasty died out in 1911. In its place a bourgeois Republic was proclaimed, whose leading character was Sun Yatsen, founder of the Guomingtang, established as provisional president in Nanking. A nationalist and a moderniser, familiar with the outside world, he died in 1925, to be succeeded by Chiang Kaishek. The Guomingtang Government, which lasted until 1949, occupied in struggles against warlords, the Communists and the Japanese, was incapable of putting into practice Sun Yatsen’s ideas for modernising the country.

With the Communist Revolution, Mao Zedong set in motion the third attempt at modernisation. When on 1 October 1949, Mao Zedong proclaimed the creation of the People’s Republic in Tiananmen Square, he exclaimed: “China has stood up”, a nationalist rather than a class-based slogan. For Chinese Communists, nationalism was always as important as ideology. The Communist Party of China (CPC) invoked as one of its precedents the Movement of 4 May 1919 against the surrender of the former German concessions in China to Japan under the Treaty of Versailles, identifying Sun Yatsen among their precursors. Communism was perceived as a shortcut to achieving economic modernisation, indispensable if China was to avoid once again being brought to its knees.

Mao effectively made it possible for China to again become master of its fate, and for the Chinese to recover their national pride. His intention was to achieve an egalitarian society, based on collective ownership, a communal way of life and a very rudimentary form of sharing. He aimed to forge the Communist “new man”, altruistic and selfless, dismissing the wealth of China or the welfare of its inhabitants. Paraphrasing Deng Xiaoping, we might say that for Mao, the cat had to be red, and he had no interest in whether or not it could catch mice. But his revolutionary Utopia lost touch with reality, leading to the horrors of the Great Leap Forward (1958) and the Cultural Revolution (1966–1976), which resulted in over 30 million deaths¹ , and from which China emerged in a state of extreme economic misery. In 1978, China’s GDP of $147.000 million dollars (M$) accounted for only 2.7% of world GDP. Per capita income was a meager $154.9. Without economic modernisation, the work of national liberation was left in the air, and China would sooner or later find itself again at the mercy of other powers.

Following these earlier failed attempts, Deng Xiaoping discovered the formula for modernising China in his strategy of “Economic Reform and Opening up to the Outside World”, the theoretical scaffolding that has permitted both the building of the market economy and China’s extraordinary economic growth.

In 1964, Prime Minister Zhou Enlai, always keen to restrain Mao’s revolutionary pipe dreams, formulated the policy of the “Four Modernisations”: of agriculture, industry, science and technology, and defence. He did so again in 1975, when the totally discredited Cultural Revolution came to an end. In December 1978, during the decisive third plenum of the XI Central Committee of the CPC, which marked a turning point in the history of China, Deng launched the “Policy of Economic Reform and Opening up to the Outside World”, little more than a reformulation of the “Four Modernisations”. Except now that the struggle to succeed Mao was swinging in Deng’s favour, the process was begun in earnest. “The central aim of all the work of the Party is now the ‘Four Modernisations’, our new Long March”, Deng announced.² The class struggle gave way to economic development. According to the resolution of the Central Committee plenum, “socialist modernisation is a deep and widespread revolution”. It certainly was: Deng Xiaoping’s revolution, which in spite of claiming to be based on Mao Zedong’s achievements, would be called on to redirect their essence, changing the face of China and with it, the world, in just a few years.

Deng Xiaoping had an uneasy relationship with power: purged in 1966, at the start of the Cultural Revolution, he escaped expulsion from the Party. At the time, one of his children, Deng Pufang, was thrown out of a window and permanently handicapped. Reinstated in 1973, he was purged again in 1976, before definitively returning to power the following year. Although Hua Guofeng, Mao Zedong’s successor, did not give up the various posts he occupied until 1981, Deng became de facto number one in 1977, at the age of 73. Although Deng’s age when coming to power may look strange to Western eyes, it must be remembered that China is a country with Confucian roots which reveres the wisdom and experience of its elders, and this kind of thing is considered quite normal. In an interview with Alfonso Guerra, then Vice President of the Spanish government, on 30 April 1987, Deng, who was then 83 years old, remarked: “How young you are. And how young are King Juan Carlos and Felipe González. You have time for everything”.

Deng’s supreme authority did not come from his holding formal responsibility: he never resumed the role of General Secretary of the Party (which he held from 1956 to 1966), nor was he ever Head of State or Government. In 1978, his only responsibilities were as member of the Politburo Standing Committee, President of the Military Commissions (Party and State) and Vice President of the Government. In October 1987, he left the Politburo, and in March 1988 his Government post. He only kept the Presidency of the Military Commissions, which he had taken on in 1981, eventually retiring in 1989. In spite of this, he remained number one until he died in February 1997, at the age of 93. His authority arose from the prestige he accumulated as a member of the revolutionary generation, his participation in the Long March, his heroism in the wars against the Japanese and Chiang Kaishek, from holding top posts in the Party, the State and the Armed Forces, and from his close personal ties with the heads of these three institutions. Above all, Deng was respected by his peers for his wisdom and powers of persuasion. After his reform achieved such stunning success in the countryside, popular support for Deng’s policy reinforced his leadership, disarming his more conservative rivals.

Throughout his life, his political thinking, the theoretical basis of China’s economic development and the enormous changes in the country post-1978, was influenced by several factors. One decisive factor was the periods he spent abroad. In 1920, aged 16, he travelled to France, where he stayed for five years, working in different jobs and locations, among them the Renault factory in Billancourt near Paris. There he met Zhou Enlai, who recruited him for the Communist Party in 1924. He then spent nine months in Moscow. These details are very important: while Mao never travelled abroad before reaching power and later only did so on his few official visits, Deng’s experience abroad was decisive. Because he had become familiar with the market economy, he could quickly grasp that the planned economy, imported from the USSR, and Maoist experiments like the Great Leap Forward, did not work. Conversely, the market economy was able to create wealth, ensuring the people’s well-being. For Deng, this idea came to have more weight than any other consideration.

His experience of the foreign concessions and the Japanese occupation impressed on Deng the need for a country that was wealthy and strong, so that it could never again be humiliated. The trauma caused by its subjection to the yoke of the developed countries, with precedents in the Mongol and Manchu domination (in the thirteenth and fourteenth, and the seventeenth to the twentieth centuries, respectively), was one of the basic sources of the thinking and conduct of Deng and his generation. A situation where China found itself again subjugated by foreign powers had to be avoided at all costs. As Deng said, “to achieve genuine political independence a country must lift itself out of poverty”.³ This is still at the heart of the political thinking of Deng Xiaoping’s successors. For Jiang Zemin: “so long as a country is economically backward it will be in a passive position, subject to manipulation by others. Nowadays the competition among the various countries is, in essence, a competition of overall national strength based on economic, scientific and technical capabilities”.⁴ Chinese leaders often borrow from Sun Yatsen the expression “rejuvenation of the Chinese nation” as a goal to aspire to. At first, the Communists thought that by the “scientific” control of economic variables, the planned economy could be a shortcut to achieving economic development much more quickly than through the capitalist market economy system. But it soon became clear that the planning system was unable to create wealth or allow China to catch up with the economically advanced nations.

National unity, lost in the decades preceding the Revolution, with foreign occupation and fiefdoms dominated by warlords, was another urgent matter. From Marxism-Leninism, Deng always retained the concept of the people’s dictatorship, the need for a strong State, coinciding with China’s age-old Confucian tradition. For Deng, the horrors of the Cultural Revolution made stability, order and Party unity unrelinquishable.

Apart from that, the study of the evolution of the “four Asian Tigers” and their rapid economic progress convinced him of the virtues of the market economy. Deng travelled through Singapore on the way to France in 1920, returning in 1978. So he saw with his own eyes how the languid British enclave of 1920, then as backwards as the southern Chinese ports, had turned into one of the most advanced countries in the world. “From Third World to First” was the appropriate title of the memoirs of Lee Kwan Yew, the father of present-day Singapore and a significant influence over Deng Xiaoping and his successors. Taiwan and Hong Kong were parts of China; the population of Singapore was largely Chinese. In other words, three of the “four Tigers” were Chinese. In South-East Asia and the rest of the world, the Chinese minorities were very prosperous. The Chinese were rich everywhere, except in the People’s Republic. The question was, why? The reply was obvious: the planned economy did not work, and the market economy did.

When Deng came to power after accumulating enormous political experience, he knew exactly what he wanted: a wealthy and powerful China, master of its fate and capable of occupying a prominent position in the international order. But most of all, he wanted a China that would never again be humiliated by other powers, as it had been between 1840 and 1945. Deng was a Regenerationist, far removed from Mao’s dogmatic Communism and Utopianism. The Chinese are a realistic and pragmatic people par excellence, and Deng Xiaoping was a magnificent branch of the old trunk. A Utopian character like Mao, a man consumed by one idea, is the exception that proves the rule.

Deng Xiaoping’s political genius resided primarily in his understanding that the economic system imported from the USSR, which contradicts all the laws of economic gravity, had to disappear, to be replaced by a market economy. To the question “What is Communism?” Deng Xiaoping replied: “Communism means the end of the exploitation of man by man and is based on the principle ‘from each according to his ability, to each according to his need’. Giving to everyone according to their needs (the old dream of entering a shop and taking what you want free) will be impossible without overwhelming material wealth, which calls for highly developed productive forces. Therefore the fundamental task for the socialist stage, the precursor to the Communist system, is to develop the productive forces”. Deng adds: “Nothing short of a world war would stop us from focussing on the ‘Four Modernisations’, that is, from continuing to develop the productive forces”.⁵ It was clear that a Soviet-style planned economy would not allow for the achievement of “enormous material wealth”, the essential basis for the realisation of the Communist ideal of giving “to each according to his needs”. To ensure this, a market economy would have to be established. In the words of Wu Jinglian, probably the most respected and influential economist in China, Professor at CEIBS, close to Chinese leaders, especially to Prime Minister Zhu Rongji, and one of the strategists of economic reform: “Without high efficiency the lofty socialist ideal becomes ‘a castle in the air’ or ‘a system of communal poverty’, due to the lack of a material base. Therefore between the planned economy and the market economy we have no choice”.⁶

Although Deng Xiaoping argued the need to establish a market economy in Marxist terms, he could easily have done so (and perhaps did) in Confucian terms, based on the traditional Chinese political culture. Since according to Confucius, power must guarantee the well-being...

Table of contents

• Cover
• Title
• Introduction
• 1  On the Colours of the Cat: Deng Xiaopings Thought3
• 2  Galloping Economic Development34
• 3  Tiananmen Revisited153
• 4  The Political Reform
• 5 The Reform in China and Russia
• Notes
• Index