Deng Xiaoping and the Transformation of China

by Ezra F. Vogel

1911 a small group of rebels in Wuhan who took control of the office of a Qing governor-general and military commander set off a chain reaction, bringing the imperial institutions to an abrupt end. The events of 1911 are called the “1911 Revolution,”

four of these campaigns, the Communists were able to drive away the Guomindang, but during the fifth encirclement, the strong Guomindang routed the Communists from their base. In making their escape, the Communists embarked on what would become known as the “Long March,” a brutal six-thousand-mile trek that lasted slightly over one year, until the Communists settled in a new base area in northern Shaanxi.

He took part in meetings with Mao to discuss the establishment of the First Five-Year Plan and to plan for “socialist transformation,” which involved organizing individual farms into collectives, collectivizing small enterprises, and nationalizing large enterprises.

provide capable direction based on good grassroots information, it was essential that, at each level, officials would choose able and reliable leaders for the next level below. In Deng's view, for organizational reliability, a team of leaders was better than a single leader, no matter how able.

Some officers made special appeals to avoid reductions in their sectors, but few changes were made.23 The meeting set the target of reducing military positions by 1.6 million, including by some 600,000 officers, within three years.

the 1980s, with imported modern steel technology from Japan, China's steel production would leap from 37.2 million tons in 1982 to 61.2 million tons in 1989, and then to 101 million tons in 1996, when China became the world's largest steel producer.

By 2010 as steel plants with modern technology were being duplicated in various localities, China, without political mobilization, would produce 600 million tons per year, almost thirty times what it had produced in 1975.

By 1975, officials had heard about the takeoff of the four little dragons (South Korea, Taiwan, Hong Kong, and Singapore), all capitalist countries that were growing more rapidly than the Soviet Union and the socialist countries in Eastern Europe.

Deng supported giving material incentives to workers by offering to pay not according to need, but “according to work.”

Deng added that he really wanted to work on science, technology, and education, which he considered the most critical areas for modernization.

Deng thought it was a terrible waste to send young intellectuals off to do physical labor when they should be advancing Chinese science. Although he did not use the term, in fact he believed in a meritocratic elite.

Wang Dongxing had exploded just a week earlier when an article entitled “Pay According to the Work Performed” (anlao fenpei) had appeared, demanding to know which Central Committee had authorized that article (only later did he find out that Deng Xiaoping and his staff had supported it).

When told of the problem during a visit to Guangdong in 1977, Deng explained that the solution lay not in tightening border security with more fencing and more border patrols but in improving the economy of Guangdong so young people would not feel that they had to flee to Hong Kong to find jobs.

The wall became known as “Xidan Democracy Wall,” or simply “Democracy Wall.”

Writings should not challenge: (1) the socialist path, (2) the dictatorship of the proletariat, (3) the leadership of the Communist Party, and (4) Marxism-Leninism and Mao Zedong Thought.

“when we drink water, we cannot forget those who dug the well.”

Huang Hua signed an agreement with Foreign Minister Ito Masayoshi for a long-term loan from the Japanese Overseas Economic Cooperation Fund (OECF) on favorable terms. From 1979 to 2007 the OECF granted more funds to China than to any other country, a total of 2.54 trillion yen (based on the 2007 exchange rate, this amounted to roughly US$25 billion).

Deng became convinced that between 1980 and 2000 China could double its income twice and therefore he popularized the slogan, “quadrupling income by 2000.”

When it later seemed as if that goal would be difficult to reach, he quietly began speaking of a quadrupling of GNP rather than a quadrupling of income—a goal that would be easier to achieve. He cautioned the public, however, that in the decade ahead, China would not have the resources to become a welfare state.

Public attacks would not be tolerated: the “four big freedoms” (to speak out freely, air views fully, hold great debates, and write big-character posters), which in 1966 had given the Red Guards the right to launch their public attacks, would be abolished in the revised constitution.

When economic growth proceeded rapidly and smoothly, as in 1983–1984, Deng's authority was almost unassailable. But when economic problems became serious, such as in the late 1980s when China suffered rampant inflation, the public became frightened and Deng's stature suffered.

One of his most controversial moves was de-collectivizing the countryside.

Only then, in May 1980, when a substantial number of localities reported successes and there was widespread public support for the policy of contracting agricultural production down to the household, did Deng declare his own support, and even then he did so without a big public appearance.

Shekou thus became the first place in China to allow foreign direct investment and the first area where decisions about a company inside China could be made by people located outside the country.

Beyond the general effort to assist the provinces of Guangdong and Fujian, additional efforts, supported by the central government in Beijing, would be concentrated in three SEZs in Guangdong (Shenzhen across the border from Hong Kong, Zhuhai across the border from Macao, and Shantou [Swatow] on the northeast coast of the province) and one in Fujian (Xiamen [Amoy]).

Circular No. 41 of May 16, 1980, issued by the party center and the State Council, explained that the four special zones would “carry on systems and policies that are different from other places. The SEZs will be regulated primarily by the market.”

In 1979, 12 percent of China's exports originated in Guangdong, but from the late 1980s as exports grew, roughly one-third or more of all Chinese exports each year came from Guangdong alone.20 Deng acknowledged that people in Guangdong and Fujian might well get rich first, before other Chinese, but he proclaimed that areas that got rich first would then help other areas get rich.

1979, Shenzhen, just over the border from Hong Kong, was a town of some 20,000 residents, but two decades later the population of Shenzhen city, which now stretched to some of the former rural areas nearby, was approaching 10 million and still growing rapidly.

As Akio Morita, a cofounder of Sony, noted as he built factories around the world, countries without modern industry tend to preserve inefficient bureaucracies—but once modern industry introduces new standards of efficiency, those standards begin to spill over into governments.

Exports in 1984 surpassed 100 billion yuan, a 238 percent increase from 1978.54

The truth is that Guangdong then lacked the technical and managerial personnel to introduce high-technology immediately, and foreign companies had invested in China to take advantage of its comparative advantage: its low labor costs.

When Guangdong created its first toll bridge near Foshan, for example, officials there were criticized for engaging in the capitalist practice of issuing bonds to be repaid by tolls—but within a few years, the issuance of bonds and tolls had become part of the conventional wisdom about how to finance the building of large bridges and highways in China.

In 1983 Guangdong also became the first province in China to eliminate set prices on many foods, such as rice and fish. The prices of these goods rose dramatically; but as people responded to the market, producing more, the prices declined.

Within thirty years, the Baoshan plant and those built in its likeness had helped China produce almost 500 million tons of steel per year, roughly five times the amount of steel produced in either Japan or the United States.

Document No. 1, 1982, contracting down to the household and similar programs were all declared “socialist.” The ideological battle was over.

Indeed, as early as 1984 grain production surpassed 400 million tons, compared to 300 million tons in 1977. After 1981, the growth in the grain supply led the government to encourage farmers to diversify into vegetables, fruits, and industrial crops. Official estimates of per capita grain consumption rose from 1977 to 1984 from 195 kilograms to 250 kilograms, and consumption of pork, beef, poultry, and eggs increased even more sharply.

Deng accepted the August 30 decision of the State Council to withdraw the plan for removing price controls. This reversal of party policy represented the most dramatic retreat of a reform measure since Deng had mounted the stage in December 1978.

Beijing used Hong Kong as a place to earn foreign currency, import technology, and gain information about the world.

Hong Kong was given the right to retain its system of government for at least fifty years. It was to remain an open port, issue its own currency, permit free speech, including criticism of the Communist Party, and maintain its court system with local laws and the right to make final decisions—as long as they did not interfere with China's security or foreign relations.

After the handover, Hong Kong remained, as before, a cosmopolitan, prosperous city that valued free speech and respect for law.

What began as an unplanned peaceful outpouring of mourning for Hu Yaobang was transformed into parades, political forums, campouts, angry protests, hunger strikes, and clashes that spiraled out of control.

Official indices, which underestimate the actual changes, showed consumer prices in Beijing between 1987 and 1988 rising more than 30 percent, terrifying families that were dependent on fixed salaries and for over three decades had expected stable prices.

The calls for freedom and democracy, and the celebration of Hu Yaobang, tapped into a desire to be liberated from the surveillance and criticism sessions of the intrusive state.

The most reliable estimates by foreign observers who have carefully studied the event are that somewhere between 300 and 2,600 demonstrators were killed and that several thousand were wounded.

Those who look for deeper causes point to the decisions by Deng and Zhao Ziyang to allow inflation to rise in 1988 and to lift price controls on consumer products, arousing the anger and anxiety of the citizenry.

Indeed, from 1992 to 1999 China, with the world's largest population, grew more than 10 percent per year.