Reconciling China’s Political System

with Liberal Market Economics

S.A.B. 26.03.2011

In Brief: This paper aims at providing readers with a concise and thorough understanding of the complexities of the Chinese

political-economic system. By looking at the development of China‟s economy chronologically starting from the

late Qing, we develop an account that brings to light the interrelationship between political and economic reforms.

We also look at the role competing ideologies have played in economic debates and the leading figures behind

them. The 1989 crackdown at Tiananmen Square and its impact on political dialogue is also explored. Furthermore,

Tiananmen‟s role as the „high noon‟ of Deng Xiaoping‟s economic reforms and as a crucible of ideas for the

furtherance of conservative CCP ideology is examined. We also analyse contemporary political trends in the post-

Tiananmen era and how the coming to power of Jiang Zemin and Hu Jintao has affected future economic

developments. Finally, we illustrate some of the seeming contradictions and anomalies of China‟s current economic

situation by alluding to prominent contemporary intellectuals.

Introduction: China, the Shackled Titan

t is a matter of common understanding that China‟s contemporary economic surge is by no means historically

unprecedented. In a study for the World Bank, Dahlman and Aubert state that for “a large part of the last two

millennia, China was the world‟s largest and most advanced economy.”1 China has long held vast wealth in natural

resources owing to its sheer size and location and its civilization has generally ranked amongst the world‟s most

technologically advanced. Several significant inventions such as the compass, gunpowder and movable-type printing all

originated from China. China also wielded considerable intellectual influence, and occupied a central role in the spiritual

ideologies of the greater Asia region. The Neo-Confucian teachings developed by Zhu Xi and others played a “dominant role

in the intellectual life of Korea, Vietnam and Japan”2 and were accepted as official “imperial ideology”3 until the late

nineteenth century. During what some historians refer to as its “apogee”4, between the years 1661 to 1795 (late Ming to early

Qing) the empire encompassed more than 3.7 million square miles “including Taiwan, Tibet, the northern steppes and the

huge desert land of Xinjiang”5. (Guo 2010, P. 10 & Fenby 2008) It is estimated that during this time, China may have

accounted for up to a full third of total global wealth. (Fenby 2008, P. 2)

Yet despite these considerable achievements, modern Chinese economic history is punctuated by series of economic

calamities that have only recently been addressed. The World Bank study attributes the initial decline of the Chinese economy

to having “missed the industrial revolution”6. If we assume for a moment this indeed to be the root cause and beginning of

economic stagnation in China, it would be interesting to ask how it came about in the first place. It seems China has for a

good measure of time harboured a certain apathy regarding outward economic growth and integration into the global

marketplace. The Ming Dynasty, regarded as one of the most stable and peaceful periods of Chinese history, was a time

where “arts, culture, society and politics”7 blossomed, convincing the Chinese that they had “achieved the most satisfactory

1 DAHLMAN, Carl J. & AUBERT, Jean-Eric: China and the Knowledge Economy: Seizing the 21st Century. The World Bank, Washington. 2001. P. 1 2 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 8 3 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 8 4 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 1 5 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 1 6 DAHLMAN, Carl J. & AUBERT, Jean-Eric: China and the Knowledge Economy: Seizing the 21st Century. The World Bank, Washington. 2001. P. 1 7 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 10

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civilization on earth and that nothing foreign was either needed or welcomed.”8 This notion of Chinese supremacy remained

affixed to China‟s self-image well down the line. As the Ming Dynasty eventually gave way to the Qing Dynasty, the empire

continued to prosper. It was during the Qing era (1644 – 1911) that all neighbouring threats to the Chinese territory were first

overcome by military conquest. It was also during this epoch that Taiwan, the last vestige of anti-Manchurian resistance, was

conquered by the Qing and eventually became integrated into China proper. (Guo 2010, P. 10)

1840, the year of the First Opium War, marks an essential pivot point in Chinese history. The war was initiated by Britain

because it feared an interruption in is vastly lucrative trade relationship with China. Opium was being imported into China

during this period from the cotton growing regions of India as a means of stymying the outflow of silver from Britain, which

had escalated dramatically as a function of the vast increase in trade with China. Eventually, as Opium addiction began to

pervade Chinese society (an estimated 2 million were addicted to the drug at one point) and the decline in silver income began

to make itself felt economically, the emperor “decided to support the hardliners who called for complete prohibition”9 of the

drug. The war culminated with an outright victory for Britain and was officially marked by the signing of the Nanking Treaty.

Under Nanking, the first of the two „Unequal Treaties‟ as they would later come to be called by China, the empire effectively

“bartered away its sovereignty”10 and made a series of significant concessions to major European powers. Economically, this

treaty reduced China to a “semi-colonial and semi-feudal”11 power. Taking all of this into consideration, it would seem China

had not so much missed the industrial revolution as it was structurally prevented from participating in it by European

subjugation.

Yet the First Opium War was but the opening blow in a series of setbacks the Chinese economy would eventually come to

suffer. After another Opium War and the subsequent signing of the Treaty of Tianjin, foreign involvement in china became

even more entrenched. The next economically significant episode in China‟s history came during the 1911 Xinhai revolution.

The chief cause of the revolution was the general resentment felt toward the Qing rulers and their ineptitude at preventing

further humiliation at the hands of foreign powers. This was compounded by a slow undercurrent of antipathy felt by the

majority Han people toward their Manchu rulers. The Han were indeed treated poorly during early Qing rule and

intermarriage between the two ethnicities was strictly prohibited which likely prevented any deeper ties forming. (Fenby 2008,

P. 1) Upon being elected by the Nanjing Assembly in 1912, the ideological leader of the revolution Sun Yat-sen visited the

tomb of the first Ming emperor and pronounced “China free after 268 years of alien rule.”12 The revolution also ushered in a

new economic era for China with the banishment of the feudal monarchical system that officially governed the Middle

Kingdom for more than 2,000 years. (Guo 2010, P. 11)

The removal of this system by no means resulted in immediate economic gain, however. In fact, China continued to suffer

increasingly painful setbacks through the beginning of the twentieth century. The civil war that divided the country in the late

1940‟s left it on the brink of bankruptcy. (Guo 2010, P. 11) Eventually, the end of the Chinese Civil War saw the birth of

communism in the form of the People‟s Republic of China and the coming to power if its first leader, Mao Zedong. Mao‟s

reign contributed significantly to the further deterioration of China‟s economic situation. Policies and ideas such as

Collectivization and the Cultural Revolution ensured the Chinese economy remained bound and gagged and incapable of

satisfying the population‟s demands, even for basic necessities. The most infamous of the Chairman‟s policies was certainly

the The Great Leap Forward which resulted in “the worst manmade famine ever seen on earth.”13 While the economic

8 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 10 9 PERDUE, Peter C.: The First Opium War: The Anglo Chinese War of 1839 – 1942. [http://www.ocw.mit.edu/ans7870/21f/21f.027/opium_wars_01/ow1_essay.pdf] (01.03.2011) 10 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 10 11 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 11 12 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 123 13 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 396

rationale behind the Leap was not entirely preposterous, political ideology eventually took precedence over common sense

and disaster ensued. (Fenby 2008, P. 396) It is estimated the Leap cost as many as 46 million people their lives through forced

labour, coercion and starvation. (Fenby 2008, P. 396)

Deng Xiaoping, Reforms and the Age of Contradictions

hus it becomes clear how China‟s turbulent political scene contributed directly to the style and character of its

economy. Although to a certain extent this is true for most countries, rarely is the interrelationship between

economy and politics illustrated as clearly as during Deng Xiaoping‟s ascent to power and subsequent rule.

Xiaoping, whose name means „little peace‟, was born in 1902 to a rural family in Sichuan province. (Fenby 2008, P. 528)

Despite his unassuming physical appearance (Deng stood at just under 5 feet tall) and introverted character, his tenure as

leader of the communist party is directly responsible for moulding the current modern nation state of China. In 1920 at the

age of sixteen he left to Paris where he began to develop his political background by joining the Communist Party of Chinese

Youth in Europe. Returning to China in 1926, Deng showed himself to have profited immensely from his experiences abroad

and demonstrated an understanding of China and the outside world that had remained unobtainable to Mao. (Fenby 2008, P.

532) Already in his early years of work for the Communist Party in China, he began to implement some of the policies that

would later come to define his political leadership. For example, he was in the habit of seeking to boost production by

“‟rewarding the hard-working and punishing the lazy‟ through payment of bonuses to those who performed well, and by

allowing farmers to keep output above the quotas set for them.”14

Around the time reforms were implemented in the late 1970‟s, China was extremely poor. The population, which had reached

962 million in 1978, put enormous strain on the food supply and average calorie intake, particularly in the rural regions, was

barely above the survival minimum. (Fenby 2008, P. 552) China severely lagged behind most of its neighbours, but most

politically perceptible was the economic flourishing of Taiwan. By means of American aid and assistance, the Republic of

China evolved from an agrarian economy into a major exporter of “industrial goods, textiles and chemicals.”15 Although

Deng felt compelled to reject the political pattern emerging in Taiwan, one could venture that, at least privately, he had taken

its success to heart. (Fenby 2008, P. 553) The island‟s economic progress served as damning indictment against the policies of

Maoist economics and seemed to demonstrate irrefutably that despite their ideological conformity, they could not lead to

material success. For his part, Deng had always championed that idea that it was perfectly permissible to adjust the minutiae

of Maoist thought providing its essence remained untainted. As he was quoted saying at the Thousand Cadres conference in

1962, Deng “did not care about the colour of the cat, as long as it caught the economic mouse.”16

Support for Deng and his ideas slowly accrued throughout the 1970‟s and culminated in more or less greater

acknowledgement during the Third Plenum of the Eleventh Central Committee that took place in December of 1978.

Although ranked de facto below Hua Guofeng (Mao‟s chosen successor), Deng began to assume an increasingly greater role

in China‟s leadership. During his first wave of reforms, Deng chose to focus on the obscenely impoverished countryside,

which at this time was home to 795 million people. In order to increase agricultural output, the people had to be encouraged

to produce more. To this end Deng introduced private enterprises across a number of provinces in addition to a new policy

called the „household responsibility system‟ which allowed farmers to keep excess output providing that some form of tribute

was paid. The greater degree of individual freedom allowed by these policies resulted in incredible successes, at first for the

rural countryside and eventually for urban areas as well. In four years, agricultural output rose by nearly a quarter with clear

14 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 396 15 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 552 16 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 534

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increases across other key economic sectors as well. (Wei & Chao 1982, P. 2) Market-oriented reform was embraced by most

of the rural peasantry with relatively little backlash or resistance.

The reforms initiated by Deng in the agricultural sector also began to see the introduction of free market policies throughout

the rest of the country. Reforms in the urban sector are generally seen as having started in 1984, with the stated goal being “to

regulate industrial production through the operation of market forces.”17 While state run factories were still given only limited

decision making autonomy, with the last word generally reserved for their CCP supervisory committee, many did begin to

seek management that would aim to make a profit. (Fenby 2008, P. 555) During this period, it was the small private

enterprises that benefitted most from the free market turn the economy had taken. Numerous small shops and supermarkets

had been setup throughout the capital and often provided superior goods and services to those offered by their state owned

equivalents. The government still exercised tight control over the labour market through the Haikou system however and it

was not immediately possible for everyone to emigrate from the countryside. Many first gained posts as „temporary migrants‟

which allowed them to work outside of their jurisdiction of residence, albeit with fewer rights than settled staff. (Fenby 2008,

P. 557) Even more significantly, state intervention was also present in the form of the One Child Policy, which prevented

urban families from having more than once child and rural families from having more than two. Because male babies were

generally preferred, particularly among rural couples, this eventually had the effect of seriously skewing China‟s demographic

structure.

A further important economic development during this time was the creation of Special Economic Zones (SEZs) and the

introduction of foreign direct investment. The Chinese SEZs were modelled largely after those in Taiwan, South Korea and

Ireland and were pioneered to a great extent by Deng Xiaoping himself. (Fenby 2008, P. 557) Because these SEzs were

export-oriented, they were not regarded as competition for the state run firms and therefore benefitted from certain privileges

such as tax breaks and subsidies to make them more attractive to foreign investment. In May 1980 the first SEZ was opened

in Shenzhen followed by an additional three in Zhuhai, Shantou and Xiamen respectively. These SEZs had a so-called

“multiplier effect”18 in that they not only increased the average wealth of their workers, but through remittances also had a

positive impact on parts of the distant countryside as well. Through the advent of the SEZs the manufacturing sector became

increasingly important. In turn, “this encouraged a shift away from the big monopolist state enterprises towards collectives

and joint ventures” which further indicated the expansion of the free market dynamic and the withdrawal of the state from

economic activities.

The effects of Special Economic Zones and other liberal market mechanisms were not entirely positive however. Economic

crime began to increase along with other forms of “spiritual pollution”19, which did not go unnoticed by the CCP rulers.

Some were in fact especially vocal about the impact the economy was having on party ideology and the nature of China‟s

society. Deng Liqun, a CCP propaganda boss, was one of these conservative advocates who linked China‟s current economic

trajectory to the prevalence of spiritual pollution throughout society. Products seen as emblematic of the West such as

miniskirts, high heels and makeup were despised by conservatives primarily because of their symbolic value. It was assumed

they encouraged “bourgeois liberalism”20 and increased “individualism”21, both of which run contrary to the ideals of Marxist

socialism. Despite being of the father of the reforms, Deng Xiaoping himself began to harbour reservations about the

direction economic development might take China politically. However he decided against reigning in his reformist ambitions

and to continue down the chosen path, albeit with increased oversight as suggested by his „four main aims.‟ (Fenby 2008, P.

17 GUO, Rongxing: An Introduction to the Chinese Economy: The Driving Forces Behind Modern Day China. John Wiley and Sons, Singapore. 2010. P. 88 18 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 558 19 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 561 20 PONG, David: Encyclopedia of Modern China: Vol. 1. Charles Scribner‟s Sons, London. 2009. P. 232 21 PONG, David: Encyclopedia of Modern China: Vol. 3. Charles Scribner‟s Sons, London. 2009. P. 454

559) In a major address to the CCP in 1982, Deng stressed that while it was important to learn from foreigners, “mechanical

copying of their methods would lead to nowhere.”22 He finished his speech with the now famous quote that is generally used

to describe the Chinese economic style: “We must integrate the universal truth of Marxism with the concrete realities of

China, blaze a path of our own and build socialism with Chinese characteristics.”23

However, it is perhaps a lesser known incident that provides an even better insight into what Deng Xiaoping‟s true

motivation might have been for initiating reforms. During an appearance on an American television show in 1986, he is

known to have made the following statement:

“There can be no Communism with pauperism, or Socialism with pauperism. So to get rich is no sin.

However, what we mean by getting rich is different from what you mean. Wealth in a socialist society

belongs to the people. To get rich in a socialist society means prosperity for the entire people. The

principles of socialism are: first, development of production and second, common prosperity. We permit

some people and some regions to become prosperous first, for the purpose of achieving common

prosperity faster. That is why our policy will not lead to polarization, to a situation where the rich get richer

while the poor get poorer.”24

Unfortunately, China‟s astounding economic success was not enough to enough to rescue her from the social turmoil that

that would come to characterize the late 80‟s. In the first quarter of 1988, prices for vegetables “rose by nearly fifty per cent”

and other household commodities such as pork, eggs and sugar also had to be rationed. (Fenby 2008, P. 579) This set the

stage for the rampant increases in corruption and black market trading that was to follow. The number of criminal cases seen

in the first quarter of 1989 was greater than in all 1985 and serious cases were so common that death sentences could now be

imposed by the provincial courts rather than solely by the central judicial authority. (Fenby 2008, Pp. 580 & 587) As China

rushed into the new decade social tensions remained on the brink and the threat of cataclysm loomed.

Tiananmen Square and the Denial of a Movement

he Tiananmen Square protests are likely one of the most written-about events in modern Chinese history and are

often characterized as one of the most affecting stands for democracy to have taken place in the 20th century. After

the death of Hu Yaobang, a pro-reform member of the CCP, mourners demanded a “reassessment of those

sanctioned in the campaign against „bourgeois liberalization.‟”25 In mid-May, several student leaders called for a hunger strike

for fear the protests which had begun after Hu‟s death might otherwise lose momentum. Initially, 1,000 students took part in

the hunger strikes with nearly ten times as many onlookers. (Fenby 2008, P. 604) Before long, their ranks had swelled to over

3,000 while many major cities throughout the country were simultaneously rocked by protests. (Fenby 2008, P. 607) It is

estimated that on May 17th alone, nearly 1.2 Million people had taken to protest throughout the capital Beijing. When Mikhail

Gorbachev came to visit during this period, the protests forced him to enter the Great Hall of the People through a side

entrance, which was considered an enormous embarrassment for the CCP. Deng Xiaoping himself was overwhelmed by the

scale and magnitude of the movement, but after some deliberation decided that martial law must be imposed. While his initial

order was met with dissent from party members (most notably from Zhao Ziyang) and even some senior military officers, a

brutal military crackdown would eventually take place on the 4th of June. (Pong 2009, P. 328:1)

Tiananmen is significant because, as Fenby asserts, it represented the opportune moment for the economic reforms of the

preceding decade to materialize into sweeping political changes. (Fenby 2008, P. 611) If the CCP leadership had ever intended

22 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 559 23 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 559 24 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 567 25 PONG, David: Encyclopedia of Modern China: Vol. 1. Charles Scribner‟s Sons, London. 2009. P. 328 :1

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for economic reforms to eventually allow for a change in government, a shift perhaps from a „people‟s democracy‟ (Pong

2008, P. 221:1) to a western style, parliamentary democracy, it was these several weeks in May that would have been ideal for

such a transition. It is Tiananmen that exemplifies the divergence of government policy and economic reforms in modern

China most clearly. The social forces that came into play that day were largely fomented by the economic reforms of the

previous 10 years and the inflation, wealth disparities and corruption amongst CCP members that eventually resulted from

them. Tiananmen can be seen as a manifestation of people‟s dissatisfaction with this state of affairs in combination with an

overarching desire for a true democratic government26. (Pong 2009, 328:1 & Fenby 2008, P. 579) As such, Tiananmen

represented a choice for the CCP to either continue historical precedent and ensure that real political dialogue had no place in

the people‟s democracy, or to make concessions to the protesters and acknowledge the validity of their claims. As it turns out,

Deng and his cohorts decided that party and state come first and that China should remain in her “political cocoon”27 in

order to assure continued CCP rule. The Party elders, who had come to power by force of violence, would not be bested by a

simple student demonstration.

“The sound of gunshots in and around Tiananmen had … a paradoxical effect. Instead of signalling the

regime‟s desperation and bankruptcy, the gunshots demonstrated its determination to stay in power. This

power had been seized through “the barrel of a gun” in 1949 and maintained that way for forty years, not

by elections. If the guns was still there, so was the right to rule.”28

In the aftermath of the Tiananmen, predictions by many were made suggesting that the CCP could not last in the face of such

overwhelming global29 and domestic resentment of communism. (Fewsmith 2008, P. 1) It was further considered that if the

CCP could maintain power by means of violence then certainly the reforms of the past decade would begin to stall. Indeed by

“by fall of 1990, China‟s growth rates were near zero, by far the lowest rate of growth the Chinese economy had experienced

since the start of reform in 1978.”30 The violence of Tiananmen profoundly affected the CCP and forced them to reflect

upon what impact reforms were having on their socialist society. In short, they were led to question whether these reforms

were in fact the “„self-perfection‟ of socialism”31 as had been proclaimed by their pioneers and countless party documents, or

did the „gradualism‟ of reform also mean an equally gradual decline in the importance of socialist thought? Zhao Ziyang

initially bore the brunt of accusations from party members, many of whom believed he “had ignored and insulted them, [and]

treated their concerns contemptuously.”32 However, Zhao was merely a scapegoat for a much deeper resentment felt my

many CCP members toward reforms in general. Being the godfather of reforms, Deng Xiaoping‟s leadership also came under

conservative scrutiny. The majority of these questions had primarily to do with the political line of the reforms and the many

state-society questions that arose from them. (Fewsmith 2008, P. 22) The CCP was uncertain how to react to the many social

transformations that came as a result, such as the emergence of a “nouveau riche class, the growing independence of the

intellectual elite and rising expectations of society.”33 Taken from a different angle, one could say the CCP had simply

forgotten to factor in the people‟s dynamism into its reform plans, instead regarding Chinese society as a static, docile and

subservient.

26 At this point it must be mentioned that there were a number of groups involved in the protests during this period, such as workers and the inhabitants of Beijing known as the shimin. Not all of these groups had similar aims for the protests and it would also be a folly to assume that they all wanted democracy per se. 27 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 567 28 NATHAN, Andrew J.: China‟s Path from Communism. Journal of Democracy, Vol. 4, No. 2, April 1993 29 The revolutions in Eastern Europe during this time were demonstrating increasing dissatisfaction of the global scale with communist ideology and government. At the time is was ventured that the occurrences in Eastern Europe could be seen as an omen for what the future might hold for the CCP – particularly in the light of military intervention in Tiananmen. 30 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 1 31 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 21 32 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 22 33 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 22

In the immediate post-Tiananmen era, discussions concerning the economy was conspicuously absent from many of the

major media outlets. (Fewsmith 2008, P. 42) Serious debate was only re-initiated in November of 1989 with several high

profile economists calling for the continuation of retrenchment policies as advocated by the Fifth Plenum. (Fewsmith 2008,

P. 42) The effect of these policies was to dramatically reduce inflation in the People‟s Republic, which went from 18.8 per

cent in 1988 to 3.1 per cent in 1990.34 In truth however, debate about certain aspects of reform had been on-going for many

years and the incident at Tiananmen served simply to bring these to the forefront. (Fewsmith 2008, P. 39) Tiananmen had not

only tarnished Deng‟s reputation, but had also led the ouster of prominent reformer Zhou Ziyang who had been known

among the senior CCP cadre as pragmatic leader who was keenly focussed on economic development. His removal from his

position as general secretary was a major blow to Deng and gave the conservatives a momentary advantage. Some

conservatives even hoped that one of their own such as Premier Li Peng or former propaganda boss Deng Liqun might be

nominated to replace Zhao as general secretary. (Fewsmith 2008, P. 23) Deng for his part, retained his political position based

on “one centre and two basic points,”35 with the centre constituting economic reform and the two basic points being reform

and opening on one hand as well as opposition to „bourgeois liberalization‟ on the other.

The conservative faction within the CCP did not relent easily however, with major figures reiterating ideological statements

such as “the planned economy is primary, the market economy supplementary.”36 Certain conservatives even went as far as to

edit remarks made by Deng Xiaoping which appeared in the People’s Daily so that they more closely fit their agenda.

(Fewsmith 2008, P. 38) Some Orthodox-Marxist conservatives such as Weng Zhen made it clear that they saw economic

change as a direct transgression of socialism because it was “ushering in „western religion, capitalism and clans‟, with fewer

and fewer young people joining the CCP – a poll showed that the main motivation for membership was to achieve a position

that could be exploited for gain.”37 In other cases, some conservatives even argued for re-imposing collectivization insisting

that the Zhao‟s policy of decentralization was leading to a loss of economic and even political control over the provinces.

(Fenby 2008, P. 644 & Fewsmith 2008, P. 44) Others even went as far as to proclaim outright that the suggested (positive)

relationship between economic development and stability promoted by Deng was flawed. Wang Renzhi, head of the

propaganda department, argued that “stability can only be based on the basis of Marxist ideology … Only this way [can]

economic work be carried out without deviating from the socialist orientation.”38 For his part, Deng did not pay much heed

to the calls for a more conservative political line also insisted that the persecution of liberals, including those who were

involved in Tiananmen remain limited. (Feny 2008, P. 645) Deng was not oblivious the fact “that a major reason for the

Soviet Union‟s collapse had been its economic failure, and the redoubling of dictatorial controls would not by itself solve

China‟s problems.”39 Despite having announced his intention to step down from his position as Paramount Leader not long

after Tiananmen, Deng still managed to initiate another set of economic reforms in 1992 in direct opposition to the

dissenting voices of the CCP leadership. (Béja 2009, P. 7 & Fenby 2008, P. 642)

As part of the general atmosphere of discontent among conservative party members, some began to refer to places such as

Whenzou as „quasi capitalist enclaves‟ and proposed ridding them of their free market elements. (Fenby 2008, P. 646) There

was also talk of “integrat[ing] the planned economy with market regulation [!]”40 and calls for a “‟sustained, stable and

coordinated‟ economic‟ development”41 plan. Deng, who at this time also had to contend with a severe wane in his political

power, began to involve himself personally in the matter. His first step, taken in 1991, was to travel to Shanghai give a series

34 WONG, John & LU, Ding: China‟s Economy into the New Century: Structural Issues and Problems. World Scientific Publishing Company. 2002. P. 12 35 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 23 36 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 38 37 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 644 38 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 39 39 BÉJA, Jean-Philippe: China Since Tiananmen: The Massacres Long Shadow. The Journal of Democracy, Vol. 20, No. 3, July 2009. P. 7 40 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 48 41 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 49

of talks refuting the alleged incompatibility between the free market system and Marxism/Socialism. Market and planning are

two distinct economic „methods‟, declared Deng, and not necessarily exclusive to either capitalism or socialism. As such,

whatever method or strategy helps to promote and improve a socialist economy can be regarded as socialist. (Fewsmith 2008,

P. 49) Deng‟s lectures in Shanghai and a series of articles published afterward which called for “emancipation of the mind”42

and chastised the “ossified thinking”43 of the conservatives, earned him a great deal of positive response, not least of all from

the Mayor of Beijing, Chen Xitong and several provincial governors. They largely agreed with Deng‟s points and extolled in

their own articles the numerous benefits conferred on the provinces by a decentralized economic system. The conservative

response to these articles (known as the Huangfu Ping articles) was fierce and one particularly notable response argued that

the bourgeois liberalization (seen to be a direct consequence of reforms and opening) “could never be confined to the

ideological sphere because it was inherently a political issue involving the question of whether to take the socialist or capitalist

road.”44 However, the conservatives did suffer a minor setback when it became known that the Soviet Communist Party had

surrendered its monopoly and power and decided to move in the direction of democratic socialism.

The reforms of 1992 would be the last major political initiative spearheaded by Deng Xiaoping, and would leave and indelible

mark on China just ahead of the new century. His tour of the south began in early January and started in the SEZ‟s of

Shenzhen und Zhuhai. There the Paramount Leader made his case not simply for the continuation of reforms but also for

their intensification. Using one of Mao‟s beloved metaphors, he urged the CCP not to act like a “woman with bound feet”45

when it came to the issue of reform and to “more boldly absorb and draw on all fruits of civilization created by the society of

mankind … including advanced capitalist countries.”46 The patriarch also offered a direct rebuke to those amongst his

opponents that insisted Tiananmen to be a result of the reforms. Deng insisted that without the “material progress”47 gained

by the reforms, the 4th of June would have resulted in “chaos and civil war.”48 He also echoed his previous statement that

market and plan were simply economic methods and it would be erroneous to see them as representative of a specific system,

be it either capitalism or socialism. He then went on to circumscribe precisely what it was that he thought characterizes

socialism, the so-called „three advantages‟. Socialism could be defined by: “whether or not something [is] advantageous to the

development of socialist productive forces, advantageous to increasing the comprehensive strength of a socialist nation, and

advantageous to raising the people‟s standard of living.”49 Finally, the Paramount leader issued his most decisive decree

against the conservative elements in the CCP to date. He declared that anyone who opposes reform should “step down”50

and that “whoever changes the line, orientation and policies of the [1978] Third Plenum will be stopped by the common

people [lao baixing] and will be struck down.”51

Deng‟s speeches and his trip to Shenzhen eventually helped turn party opinion in his favour. Despite the deeps rifts made

visible during the debate on reform and opening up, enough CCP heavy-hitters had joined the Deng camp to push his

position into the majority. In addition to support from important members of the Politburo such as Yang Shangkun

(Permanent Vice-Chairman of the CMC) and Qiao Shi (Standing Committee of the Politburo), Yang Baibing (Vice-Chairman

of the CMC) affirmed that the PLA would „protect and escort‟ reforms. (Fewsmith 2008, P. 67) According to Fewsmith, this

incursion by the PLA into issues of domestic politics shows just how deep disagreement on economic reforms within the

Party truly was. (Fewsmith 2008, P. 67) Initially, Deng‟s southern tour was not reported much by the media and it took some

42 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 49 43 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 49 44 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 56 45 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 647 & FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 62 46 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 647 47 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 647 48 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 647 49 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 62 50 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 63 51 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 63

prompting from smaller local outlets to make the important publications such as the People’s Daily in Beijing take notice.

(Fewsmith 2008, P. 66) It is also interesting to note a talk by Vice-Premier Tian Jiyun, which suggested that the „leftists‟, as

the conservatives fighting against reform were commonly known, should be relegated to a „special leftist zone‟ where there

“would be total state planning, supplies would be rationed, and people could line up for food and other consumer items.”52

(Fenby 2008, P. 648) Perhaps most importantly, Deng‟s efforts served to convert the formerly reluctant Party Secretary Jiang

Zemin into a member of the Deng camp, although some in the party may have still had doubts concerning his position on

economic matters. (Fenby 2008, P. 648 & Fewsmith 2008, P. 69)

Deng‟s rally for reform and opening culminated with the Fourteenth Party Congress in October 1992, which wholeheartedly

embraced Deng‟s economic theories and policies. Just a year earlier, Deng Liqun had labelled reform and opening an

ideological beachhead which would inevitably lead to the way to „peaceful evolution‟ and further incursions by the west into

Chinese society. Now the Congress was referring to a „historical period‟ and a „new revolution‟ characterized by „reform and

opening‟ and by „fundamentally changing the economic structure rather than patching it up.‟ The congress also specifically

endorsed the creation of a „socialist market economic system‟ and upheld Deng‟s oft repeated formula that market and

planning are not symptomatic of a particular system, but rather „means‟ for regulating the economy. (Fewsmith 2008, P. 72)

The Congress also echoed Deng‟s call to „guard against leftists‟ and personally recognized and lauded him for his „tremendous

political courage in opening up new paths in socialist construction and tremendous theoretical courage in opening up a new

realm in Marxism.‟ The newly adopted political agenda was very much a personal victory for Deng. And as Fewsmith goes on

to add, “rhetorically at least, Deng‟s status became comparable to, if not higher than, that of Mao.” (Fewsmith 2008, P. 72)

The fourteenth congress was also fundamental in that it saw the personnel changes take place that would ensure the

preservation of Deng Xiaoping‟s economic reform into the future. (Fewsmith 2008, P. 73 & Fenby 2008, P. 651) It was

during this time that Hu Jintao, the current General Secretary, was promoted to the Standing Committee of the Politburo at

Deng‟s insistence. (Fenby 2008, P. 652) Several other changes were also made that saw either the removal or retirement of

several important hard-line conservatives and the dissolution of key organs of conservative power such as the Central

Advisory Committee formerly headed by Chen Yun, a staunch anti-reformist. (Fewsmith 2008, P. 74 & Fenby 2008, P. 653)

Although these changes reflected an overall shift away from the conservative line and toward more reform-minded political

approach, Deng was careful not to overhaul the CCP in its entirety. He realized that purging leftists with excessive zeal might

contribute to political instability down the road and to this end left several high-ranking conservatives at their posts.

(Fewsmith 2008, P. 77, 78, 175)

Political Consequences of Economic Reform: Enlarging Legitimacy and the Rise of New Nationalism

o some extent, a section title such „Political Consequences of Economic Reform‟ might lure the reader into imaging

that economic changes can and do manifest themselves politically in linear and causal manner. As a brief glance at

China‟s modern history demonstrates, politics and economy seem deadlocked in way that makes separating between

the two almost impossible and sometimes pointless. Possibly because the ideology behind China‟s political system is so

potent, the debate about the economy has been such a long a protracted one. To a certain extent even the most liberal and

reform-minded of the Chinese elite including the late Deng Xiaoping himself seem incapable or unwilling to recognize the

serious faults that might lay behind their political reasoning. The economic momentum initiated by the 1978 reforms

manifested themselves in May and early June of 1989 at Tiananmen Square. Tiananmen made it clear that the CCP could no

longer compartmentalize economic growth and hoard the engines of wealth creation under the pretext of public ownership.

The Party‟s widespread corruption and gross malfeasance laid bare by China‟s increasing wealth would no longer be tolerated

52 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 69

T

by the Chinese people and when a group of students began to protest for democracy, thousands of Chinese elected to join

them. At this crucial moment, the old guard of the Chinese communist establishment remained irreverent and unyielding

towards their people, pursuing instead the interests of state and party. It is Tiananmen that exemplifies how increased

economic liberty might actually manifest itself in a desire for political change. However, such a desire is only relevant within a

system that is capable, and willing, to accommodate it. But the CCP, rather than considering the demands of the Chinese

people, ascribed the protests at Tiananmen to a “small conspiratorial group”53 and, as per historical precedent, responded

with a violent crackdown. As for the thesis that political change can be expected to court economic reform, it would appear

that China is a case study on the one hand and a paradox on the other.

In this way, China does indeed represent something akin to an economic anomaly. In general, most states that enjoy a free

market system consider themselves capitalist economies where the state‟s foremost goal is to secure property rights and rights

of the individual. Such states also tend to have a parliamentary democracy, with regularly held elections where the leaders are

chosen from the bottom up or „by the people‟. While this method of representative government is not necessarily the ultimate

guarantor of freedom and equality, it has proven itself to be relatively effective and superior to many other models. Yet

China, despite having remodelled its economy around key capitalist concepts such as „privatization‟ and the „free market‟ sti ll

retains an authoritarian regime. Hu Jintao, the current President and General Secretary, was in fact preselected to take the

reins of power by Deng Xiaoping, who died in 1997. (Fenby 2008, P. 652) Although the path to reform and opening was

greatly contentious, the CCP managed to resist the calls of its conservative faction and succeeded in forging a new

understanding of socialism that embraces market economics yet remains ideologically faithful to original Maoist thought and

theory, at least on the outside.

However, whether or not the abrogation of market economics is necessarily intrinsic to socialism and communism is a

subjective matter, as demonstrated by the abundant strife within the CCP since the very introduction of reforms. Jiang Zemin

for example, has explained that “the communist society is the one affluent in wealth [where] the individual is bestowed with

the rights to develop freely and in an all-round way.”54 Thus, it can be regarded a matter of one‟s personal interpretation of

Marxist thought whether there is in fact any tension between communism/socialism and free market economics. It seems

relevant to mention that many of the conservative hard-liners did not necessarily have a problem with reforms per se, but

rather with some of their immediate consequences such as „bourgeois liberalization‟ and „peaceful evolution‟. These are seen

as corruptive influences and are considered unwholesome in the context of a true communist society. However, they are

inevitable consequences of reforms, which have kept progressing and have even intensified since Tiananmen. It therefore

seems fit to ask how the CCP has managed to maintain is legitimacy in the face of what conservatives perceived to be the

mortal enemies of socialism.

A political party that wishes to stay in power must adjust its politics and policies to rapidly changing realities. In democratic

systems, these realities make themselves manifest through the voters. Such politicians are chosen which seem „in-touch‟ and

representative of the greatest number of people. However, when no possibility exists for the citizenry to stake its claim on the

future as is the case under most authoritarian regimes, it falls to the government to self-adjust to these realities so as to pre-

empt social unrest. This brings up the idea of government legitimacy. Compactly formulated, legitimacy deals with the

fundamental question of who deserves to have power and why. (Guo 2003, P. 2) An elected government can be considered

legitimate, providing the elections were free and fair, because power has been bestowed upon it by the people. This notion is

a simplification of David Beetham‟s concept that legitimacy is a “power relationship justified in terms of people‟s beliefs.”55

53 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 616 54 Professor Liu Ji: The Reform of the Chinese Political System [http://www.ceibs.edu/ase/Documents/EuroChinaForum/liuji.htm] (05.03.2011) 55 GUO, Baogang: Political Legitimacy and China‟s Transition. Journal of Chinese Political Science. Vol. 8, No. 1 & 2, Fall 2003. P. 7

Legitimacy for an authoritarian regime is somewhat more difficult to justify. When the CCP first rose to power, it enjoyed

genuine popular support from workers, intellectuals and peasants largely because communism was in tune with the Chinese

desire for a da tong [great harmony] society. (Guo 2003, P. 8) Under Mao, legitimacy was furthered by a “mixture of Marxist-

Leninist leadership structures and traditional concepts of moral integrity and political morals."56 The personality cult that

surrounded Mao also served as the basis for a certain charismatic moral legitimacy because he was idealized as the

embodiment of the party and what it stood for. (Guo 2003, P. 8) The Communist Revolution in China first gained a foothold

amongst the peasantry and it was politically beneficial to present Mao as a “godlike figure … and saviour of the Chinese

people.”57 (Fenby 2008, P. 440) The CCP never professed to represent all of society but rather a majority on whose behalf it

could justly impose tyrannical rule. (Guo 2003, P. 8) The Party also derived a degree of legitimacy from historical precedent

and synthetic polarization by attributing to the communist cause the mission of eradicating capitalism. Taken from Mao‟s

writings is the following statement: “The socialist system, will eventually replace the capitalist system; this is an objective law

independent of man‟s will.”58 It is by this reasoning that the CCP decided it would be the party bodies rather than

government agencies that would have ultimate decision making authority – a concept known as „unified leadership‟ or yi yuan

hua. This demonstrates how in every possible way, the idea of a socialist society (and its economic mainstays) was intricately

linked with CCP‟s very existence. Under such an atmosphere, the economic shakeup of 1978 could not but result in serious

reflection upon the Party‟s ideological roots.

The Tiananmen protests of 1989 signal the beginning of the CCP‟s most acute legitimacy crisis, one that lasted well into the

next decade, and arguably continues to this day. (Sausmikat 2006, P. 73 & Guo 2003, P. 14) Despite the “enshrinement”59 of

„market socialism‟ by the Fourteenth Party Congress in 1992, debate within the CCP about reforms was continuing to the

extent where it began to affect the Party‟s capability to rule. The issue of economic reforms and their impact on the Party‟s

ideology was not solved in 1992, despite the sweeping personnel changes within the Politburo and extensive pro-reform

rhetoric in official documents and manifestos. Questions were also eventually raised about the possibility of political reform

to accompany the broadening economic changes and resultant growth. (Sausmikat 2006, P. 73) Political reform, particularly

the suggested separation of party and government, had already been brought up pre-Tiananmen and was largely supported by

former Secretary Zhao Ziyang. But this debate was quickly overshadowed by the far more poignant one about the ideological

contradictions behind reform and opening. (Sausmikat 2006, P. 72) Jiang Zemin, who was granted the position of General

Secretary after the 1989 crisis shared the same ambivalence toward political reforms as Deng Xiaoping but was similarly

convinced of the benefits of economic reforms (not least of all due to Deng‟s personal efforts in this regard). After

Tiananmen, the Party employed a „two-track‟ approach to achieve some form of political revitalization. Gradual reforms

would be continued under a new nationalistic neo-conservative movement that would shepherd China into a century of

strength and prosperity. Intellectually, this movement rationalises the establishment of an enlightened authoritarianism to be

used as a lever to “drive Chinese modernization forward.” (Guo 2003, P. 74)

The emergence of a new Chinese nationalism is significant, because this was seen by many intellectuals as the only way a one

party state could hope to maintain its legitimacy. (Sausmikat 2006, P. 74 & Nam 2006, P. 143f) This strain of thought also

helped rationalize Tiananmen and the CCP‟s subsequent military crackdown on the protesters. Because domestic stability is

considered paramount to the People‟s Republic, and modernisation without internal stability is not possible, suppression of

turmoil is legitimate in the name of preserving growth. (Sausmikat 2006, P. 75) Neo-authoritarianism, in some ways a

precursor to neo-conservatism, even went so far as to argue for strong authoritarian rule as a perquisite for the development

of individual freedoms that would eventually lead to democracy. Wu Jiaxiang argued that on the path toward democracy, a

56 SAUSMIKAT, Nora: More Legitimacy for One-Party Rule? The CCP‟s Ideological Adjustments and Intra-Party Reforms. ASIEN 99, April, 2006. P. 72 57 GUO, Baogang: Political Legitimacy and China‟s Transition. Journal of Chinese Political Science. Vol. 8, No. 1 & 2, Fall 2003. P. 7 58 GUO, Baogang: Political Legitimacy and China‟s Transition. Journal of Chinese Political Science. Vol. 8, No. 1 & 2, Fall 2003. P. 8 59 SAUSMIKAT, Nora: More Legitimacy for One-Party Rule? The CCP‟s Ideological Adjustments and Intra-Party Reforms. ASIEN 99, April, 2006. P. 74

deposed central authority might somehow cede some of its power to social structures and forces, resulting in the dispersal of

power and the non-development of personal freedoms. Thus a „new‟ authoritarian regime must take it upon itself to self-

consciously use its power to guide a society through this dangerous intermediate stage and keep it aligned to a path that will

eventually lead to “freedom, modernization and democracy.”60 (Fewsmith 2008, P. 83f) Another intellectual, Zhang Bingjiu

argued that a semi-authoritarian system might be used to facilitate the separation of the economy from politics. As Zhang saw

it, “in traditional authoritarian systems, economics and politics were conflated so that economic units could not have real

autonomy.”61 Zhang saw this intermediary step as a prerequisite to the eventual blossoming of democracy and was wary of

the alternative „shock treatments‟ practiced by the former east bloc countries. (Fewsmith 2008, P. 85) What Tiananmen made

clear to the CCP was that the old dichotomy of „reform‟ and „conservatism‟ had been broadened by “an unpleasant third

alternative: social and political collapse.”62 This concern about a situation of possible domestic anarchy is not limited solely to

intellectuals and the realm of theory however. One liberal observer is known to have remarked that “if an anarchic situation

appears in China, the violence that Chinese will inflict on each other will far exceed the barbarism inflicted by the Japanese

army when it invaded in 1930.”63 (Fewsmith 2008, P. 88) In some ways, neo-conservatism was an answer to this grim

realization.

As Fewsmith explains, neo-conservatism is not a formal ideological movement but rather an amalgam of particular

(occasionally divergent) views on the state, economics and socialism. Neo-conservatism accepts market economics but also

foresees an expanded role for the state‟s involvement in the process of marketization. Nationalism by no means came about

with the advent of neo-conservatism, but had actually been underlying Chinese politics for most of the twentieth century.

(Fewsmith 2008, P. 104) The process of opening up to the outside world initiated by reforms in 1980‟s was revised in the

aftermath of Tiananmen. The West was no longer regarded as a benign economic partner, but seen as “threatening and

subversive.”64 The „new nationalism‟ that came into existence as a response was increasingly conscious of China‟s role in the

world its interrelationship with the West. Some intellectuals that championed nationalism, such as He Xin even went as far as

to regard the West and the U.S. in particular as hypothetical enemies. (Nam 2006, P. 145 & Fewsmith 2008, P. 104)

Nationalism has seemingly made a substantial contribution to Chinese solidarity in the face of serious social problems such as

the “widening gap among regions and social classes, rampant corruption, increased unemployment, and the collapse of the

legitimacy of its communist ideology.”65 Indeed, nationalism was promoted by the CCP in the wake of Tiananmen precisely

to this end. (Nam 2006, P. 103) Before the 15th Party Congress the government introduced special “‟patriotic projects‟ and

educational campaigns for the promotion of a „national spirit.‟”66 Although the emerging tide of nationalism helped smooth

over certain intra-party disagreements, at times it was also contradictory in nature. For example, although the West was

considered to be demonizing China, Chinese elites were still going there to be educated and integration in the world economy

was heralded as a success. (Sausmikat 2006, P. 75f) More recently, Chinese nationalism has made itself felt in the form of anti-

U.S. and anti-Japanese staged by ordinary people in Chinese cities. Furthermore, “Chinese arts and culture were extolled, so

that the PRC would not become the „vassal‟ of western cultures”67 and in 1996 a book was published bearing the title „China

Can Say No‟. Squarely anti-American and unabashedly emotional, the volume sold more than two million copies and

“demonstrated that the same broadening of mass culture that had previously been evident in popular literature, television and

the entertainment industry was also available for political mobilization.” Whereas as nationalism had formerly been a matter

for elite politicians and academics, China Can Say No served to sow the seeds of the movement amongst the general public as

60 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 84 61 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 84 62 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 88 63 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 88 64 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 104 65 NAM, Lee Jung: The Revival of Chinese Nationalism: Perspectives of Chinese Intellectuals. Asian Perspective, Vol. 30, No. 4. 2006. P. 141f 66 SAUSMIKAT, Nora: More Legitimacy for One-Party Rule? The CCP‟s Ideological Adjustments and Intra-Party Reforms. ASIEN 99, April, 2006. P. 75 67 FENBY, Jonathan: Modern China: The Fall and Rise of a Great Power, 1850 to Present. Harper Collins, New York. 2008. P. 658

well. (Nam 2006, P. 146) It also remains to be said that Chinese nationalism, particularly the new nationalism of the 90‟s

stems to great extent from a modern understanding of Chinese history, which is regarded as “dishonourable and shameful,

and longing for the glory of bygone days.”68

After his initial embrace of economic reforms in 1992, Jiang Zemin shifted back to the centre as Deng began to fade from the

picture. While Jiang did tolerate de facto privatization, he eventually struck a political course that demonstrated a certain

degree of neo-conservatism “albeit without the explicit nationalistic or populist appeals that some neo-conservatives called

for.”69 The old hardliners considered this to be a moment of opportunity where they could either “convince or force Jiang to

identify himself with leftist causes.”70 To this end, a document was drafted in 1995 (later named the „The 10,000 Character

Manifesto‟) which sharply criticized the on-going reforms and their potential consequences for the Chinese state. As evidence,

the document stipulated that proportion of industrial output that could be attributed to state owned enterprises had fallen

from 76.8 per cent in 1980 to 48.3 per cent in 1994. It also mentioned that there were over “328,000 registered private

enterprises, with over 5 million employees and 100 billion Yuan of capital.” The paper warned that China was slowly being

undermined by the West and that the nature of the party itself was also changing. Most notably, the document vehemently

accused Deng‟s southern voyage combined with his anti-leftist stance of having caused the rampant spread of bourgeois

liberalization. (Fewsmith 2008, P. 176) The leftist advocates were bolstered by the failure of reforms in the USSR and the

relative success of China‟s proprietary economic model, which embraced gradualism and ran contradictory to the

development model mandated by the West. (Nam 2006, P. 147) Jiang however, was unfazed by these attempts to demonize

economic growth and remained determined to strike a middle way that would consolidate both the demands of state and the

imperatives of economics.

Jiang Zemin and The Search for a New Centre

ao‟s reign can be appropriately characterized by the consolidation and concentration of power while Deng‟s

tenure as Paramount Leader saw the widespread dispersal of authority. “Mao‟s concentration of power …

brought an end to a period of domestic disorder and international war, while Deng‟s devolution of authority

unleashed the economic energy that brought a new level of prosperity to the country.”71 Jiang found himself faced with the

daunting task of striking a balance between centralization and decentralization. How could the serpent of state power be

wound around the economy in such a way as to encourage growth without ceding relevance and authority? This problem was

compounded by the fact that Jiang‟s position as political leader of the Party remained a matter of opinion in the eyes of

certain CCP members. He was by no means granted the „core‟ status that Deng had enjoyed, which him aided him in pushing

through his economic vision despite heavy opposition. (Fenby 2008, P. 643 & Fewsmith 2008, P. 22f) In late spring of 1996,

a series of articles were published that demonstrated the ideological tightrope Jiang was walking. Without attempting to

appease or negate either the left or the right, these articles (authored by Jiang) stipulated a political path and took clear aim at

the political effects of economic policies. They affirmed that China was to strive toward a socialist democracy while criticizing

the Western parliamentary model. “‟Democracy,‟ the commentary stated in its opening line, “is one of the fundamental goals

for which our Party has always struggled.”72 Another article called for the opening up of the Chinese economy to be infused

with patriotism so as to prevent or hinder corrosive external influences. The series of commentaries also alluded to the

existence of „vulgar‟ and „dogmatic‟ strains of Marxism that should have no place within Party ideology. Marxism, it was

68 NAM, Lee Jung: The Revival of Chinese Nationalism: Perspectives of Chinese Intellectuals. Asian Perspective, Vol. 30, No. 4. 2006. P. 146 69 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 175 70 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 175 71 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 183 72 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 186

M

declared, needed to develop so as not to lose its “vitality and energy.”73 Along these lines, a further influential article was

published which had a direct impact on how reforms were regarded. Xing Bensi argued in the People’s Daily that while some

parts of original Marxist theory hold permanent and irrevocable truth, many of its precepts had lost relevance in the

intervening 150 years since they were written. Xing further argued that determining the line between Marxism and anti-

Marxism needed to be done on the basis of „developed‟ or contemporary Marxism. Cleverly, Xing also identified a „Right‟ in

his article which he claimed to be just as “anti-Marxist as the left.”74 His comments in this regard proved to be far less

convincing however, giving credence to the notion that he was actually in search of a polarizing factor to make his opinion

appear more like a „middle way‟.

Despite all the intellectual posturing, Jiang found himself constantly oscillating between right and left. His attempts to define

a new centre were consistently constrained by conservative clamour and he found it increasingly difficult to satisfy leftist

demands. (Fewsmith 2008, P. 187) A breakthrough came with the publication of book entitled Heart to Heart Talks with the

General Secretary which directly embraced reforms – one chapter even bore the title “Reform, Reform, Reform: The Is No

Other Road for China”75 The publication also took a lax stance toward opening up China to the outside world and mentioned

that there was no real alternative should they choose for the economy remain closed. It also analysed the thorny issue of

Soviet collapse and concluded that it was the Brezhnev Doctrine which had caused stagnation and eventually instability rather

than the reforms initiated by Gorbachev. On the ideological front, the book also takes on the idea of Marxist-Leninism being

the foundation of modern China, and recalls the importance of Confucianism in Chinese history. “It [draws] an analogy to a

tree, arguing that China‟s traditional culture can be understood as the roots, Marxism-Leninism as the trunk, and the

outstanding parts of various cultures from around the world as the branches.”76 This concept recalibrated the ideological

balance between competing ideas and helped the Party accomplish its long outstanding goal of drawing a line between

“traditional history and modern revolution.”77 It was only after Deng Xiaoping‟s death that Jiang Zemin began to shed his

caution and exercise power in a politically significant way. Shortly after the Paramount Leader‟s death, state owned enterprises

(SOE‟s) began to emerge as a serious economic issue. SOEs were regarded by the left as important because they directly

represented the State‟s presence in the economy. (Fewsmith 2008, P. 194) Many ministries held close ties with SOE‟s and

their emergence on the free market also raised the question of the involvement of foreign capital in China. This issue led to

sweeping reforms in 1998, which saw the elimination of 11 government ministries and the centralization of SOE oversight

under the State Economic and Trade Commission (SETC). Not only was this move designed to make SOE management

more effective, but it also served to create a viable climate for the development of small businesses which were expected to

create opportunities for the nearly 150 million underemployed people in the countryside. (Fewsmith 2008, P. 211)

Politically and ideologically, Jiang Zemin left his mark on the CCP with a concept called the Three Represents approach. The

increased pace of social change that resulted from expanded economic reforms eventually led Jiang to the realization that the

party had to change its self-conception from that of a “revolutionary party to a ruling party.”78 Three Represents was

introduced by Jiang shortly before his retirement in 2002, and was intended to broaden the CCP‟s social representation and

maintain its relevance in the 21st century. (Pong 2009, P. 383:2 & Guo 2003, P. 16) It made the case that the Party must

incorporate the “new bourgeoisie”79 (private entrepreneurs) and intellectuals and welcome them amongst its cadres. The

Theory also made the case that because the CCP “‟represents the interests of the overwhelming majority of the Chinese

73 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 186 74 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 187 75 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 191 76 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 192 77 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 192 78 GUO, Baogang: Political Legitimacy and China‟s Transition. Journal of Chinese Political Science. Vol. 8, No. 1 & 2, Fall 2003. P. 16 79 PONG, David: Encyclopedia of Modern China. Charles Scribner‟s Sons, London. 2009. P. 234:1

people … [therefore] the Party no longer need concern itself with class struggle.”80 For his part, Guo argues that the

introduction of this theory might actually have been intended to legitimize the fact that nearly one-third of the more than 2

million registered private businesses in China were actually owned by CCP members. These businesses employ nearly 7

million people and have over 600 billion RMB in capital holdings. (Guo 2003, P. 14) However, it can also be regarded as

ironic that the CCP‟s claim to „represent‟ all of China came at a time where income inequality in the PRC had “surpassed …

India and the United States.”81 The root cause of these extreme inequalities was the economic reforms, which had neglected

the countryside and created a 90 million strong class of migrant workers that were forced to find work in the cities. (Guo

2003, P. 15) To some extent, the Three Represents approach was also intended to remedy the problem the Party faced with

regards to the working class. Traditionally, the foundation of communist rule is generally understood to be “based on a

socialist contract between the party state and the working class.”82 Towards the end of Jiang‟s rule, more than 50 million posts

at state run factories had been liquidated and there was an increased push to limit the overall role of SEO‟s in the economy at

large. The relationship between government and workers was no longer mediated by comradeship and collectivism, but

instead by rational economic exchange.

Discussion and Analysis: A New Political Century?

It is paradoxical to justify capitalist economic policies as means to „enhance‟ socialism. This is however, what is

happening in today‟s China.”83 To see these two sentences in the preface of a book about reform in post-Mao China

indicates that an explanation to China‟s political-economic situation remains elusive. On the one hand, it is obvious

that it must be so. China‟s economy is still growing and in many ways the state and the Party are still trying to adapt. The

commonplace prophecy that economic freedom will eventually result in political liberation could yet come true however.

Even certain home-spun Chinese theories such as neo-authoritarianism foresee the existence of an „intermediary‟ stage where

a strong authority is meant to guide the state through modernization and to eventual democracy. It is also equally possible

that it might fall to the Chinese regime to find a „third-way‟, one that would allow them to legitimately stay in power while

increasing marketization and integration into the worldwide economy. The era of Hu Jintao and the coming of the

technocrats (known as the „fourth generation‟) still presents little by which to prognosticate China‟s political future. The

members of the CCP‟s fourth generation might not have revolutionary credentials but they have accepted Marxist-Leninist

ideology and have also experienced the same tribulation during the Cultural Revolution as their predecessors. Overall the

senior leadership seems to embrace reforms and acknowledge them as a necessity, yet their rhetoric is laden with ideology and

the Party remains central in many ways. Premier Wen Jiabao has promised to focus on issues such as “unemployment, the

social security system, increasing fiscal revenue and cutting public spending, and correcting and standardizing the economic

order.”84 Hu Jintao himself seemed to proclaim direct support for continuing and even expanding reforms: “We should

unswervingly adhere to the reform orientation, further strengthen our determination and confidence in the reforms,

repeatedly perfect the socialist market economy, and fully exercise the role of the market in the allocation of resources.”85 Hu

has also made it clear that he envisions a “‟harmonious society … serving the interest of the public and governing for the

people.”86 In contrast to the reformers of the 1980‟s, Hu has stipulated that the Party should very much remain involved in

running the government. To this end, he proposed democratizing more of the intra-party proceedings through methods such

as public announcements of future appointees, examination of multiple candidates for certain post as well as promoting

80 PONG, David: Encyclopedia of Modern China. Charles Scribner‟s Sons, London. 2009. P. 234:1 81 PONG, David: Encyclopedia of Modern China. Charles Scribner‟s Sons, London. 2009. P. 234:1 82 GUO, Baogang: Political Legitimacy and China‟s Transition. Journal of Chinese Political Science. Vol. 8, No. 1 & 2, Fall 2003. P. 14 83 CHEN, Feng: Economic Transition and Political Legitimacy in Post-Mao China: ideology and reform. State University of New York, Albany. 1995. P. ix 84 GUO, Baogang: Political Legitimacy and China‟s Transition. Journal of Chinese Political Science. Vol. 8, No. 1 & 2, Fall 2003. P. 16 85 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 276 86 FEWSMITH, Joseph: China Since Tiananmen: From Deng Xiaoping to Hu Jintao. Cambridge University Press, Cambridge. 2008. P. 256

“

competition amongst the candidates. (Fewsmith 2008, P. 256) Yet the changes in leadership are regarded with mixed feelings

by many, and are certainly not seen as any guarantee of a true democratic turn. (Tsai 2006, P. 116 & Gallagher 2002, P. 338)

In contrast to the uncertainty surrounding political reforms is the progress made by the economy. To a large extent, reforms

have worked and China has become wealthier as a result. Growth in the last decade has been astronomical and a middle class

has emerged. (Pong 2009, 425:3) China‟s economic resume is impressive: it has overtaken Japan as the world‟s second largest

economy, it has the U.S. in a financial stranglehold due bond ownership and it constitutes the world‟s foremost

manufacturing hub. Economic reform since 1978 has been so thorough that some are even speaking of „irreversibility‟:

“Indeed, China‟s economic reform has reached such a point that any attempt to return to the previous centrally planned

economy would be economically counterproductive and politically suicidal.”87 China‟s path has also demonstrated that shock

treatment is not necessary to kick-start an economy out of socialism and into a laissez-faire model, as the proponents of “big

bang”88 would have it. Despite these overt economic successes, ideology maintains a day-to-day role in the formation of

policy decisions. Any introduction of policies deemed non-orthodox must be laboriously scrutinized, analysed, rationalized,

discussed and reformulated so as to somehow fit within the Party‟s current ideological gestalt. Lip service must constantly be

paid to Marxist-Leninist theory and Mao Zedong Thought and any attempt at criticism must first begin with exultation. In

China, the hulking monolith of state and party survives on these formalities.

“Of course, in today‟s China, the ideology remains relevant not because the party still needs to derive

policies from it, which happened in the Mao years, but because the party has to present policy changes

through the overlay of ideological rhetoric. As what follows will show, the relevance of ideology to China‟s

reform from 1979 through 1991 is reflected in two facts: (1) Economic reforms in this period had

recurrently been plagued with ideological controversies; and (2) the party had to redefine pragmatic (and,

later, capitalistic) economic policies in terms of existing ideology. In other words, even a pragmatic policy

must be made ideologically sound.”89

With the new Fourth Generation now at the helm, the accent on ideological backing for policy decisions might soften, but

whether true overhaul of the political system will eventually take place remains uncertain.

Concerning political reforms, McMillan and Naughton put it most succinctly: “China has had perestroika without glasnost.”90

Just before the Sixteenth Party Congress, an internal document compiled by the Chinese Central Organization Department

received attention from the New York Times. Shortly after it noticed the commentary, the State withdrew the memorandum

from the public domain. What the document contained was sensitive in nature because it detailed the extent of „mass

disturbances‟ throughout China. More alarmingly, a general trend was evident that showed such disturbances to be increasing.

2003 saw some 58,000 demonstrations and in 2005 this number had already grown to 87,000. (Fewsmith 2008, P. 231) “A raft

of recent police reports also indicate that protests are not only growing in number but also increasing in size and becoming

better organized.”91 The official reason cited for these incidents was „income inequality‟, but it also seems that local cadres had

been using their position to exploit economic opportunities. Party corruption was a major contributing factor to the

Tiananmen unrest and the question must be asked, how far can Hu Jintao‟s inner party reforms truly satisfy popular

demands? Is it even possible to monitor and control corruption in party with over 77 million members? A great many

Chinese democrats believe the fall of communism to have started in China. They regard Tiananmen as the first domino in a

chain that eventually wound around to Europe and “culminated in the dissolution of the Soviet Union.”92 On the other hand,

87 CHEN, Feng: Economic Transition and Political Legitimacy in Post-Mao China: ideology and reform. State University of New York, Albany. 1995. P. 1 88 McMILLAN, John & NAUGHTON, Barry: How to Reform a Planned Economy: Lessons from China. Oxford Review of Economic Policy. Vol. 8, No. 1 P. 131 89 CHEN, Feng: Economic Transition and Political Legitimacy in Post-Mao China: ideology and reform. State University of New York, Albany. 1995. P. 2 90 McMILLAN, John & NAUGHTON, Barry: How to Reform a Planned Economy: Lessons from China. Oxford Review of Economic Policy. Vol. 8, No. 1 P. 131 91 TANNER, Murray Scot: China Rethinks Unrest. The Washington Quarterly, Vol. 27, No. 3, Summer 2004 P. 137 92 NATHAN, Andrew J.: China‟s Path from Communism. Journal of Democracy, Vol. 4, No. 2, April 1993 P. 30

questions must also be asked concerning the relevance of CCP and the state in modern day China. Economic reforms have

resulted in the vast multiplication of opportunities, even for ordinary Chinese. If the state does not prevent the Chinese from

satisfying their desires and people see their lives as fulfilled, then what incentives are there to protest? However it remains a

matter of debate whether moderate economic concessions can replace true political reform in the long run. But there is

nonetheless a feeling amongst many Chinese that for the time being, “heaven is high and the emperor is far away.”93

But so far, China seems to have broken the modern interpretation of the transition paradigm; that is, if a country is moving

away from dictatorial/authoritarian rule it must be moving toward democracy. An alternate theory is that globalization will

eventually lead the world‟s disparate political-economic systems to converge on a model that best facilitates trade, in this case

the “combination of market economy and a liberal democratic political system.”94 However 2001 marks the year of China‟s

WTO ascension, and it can hardly be said that China has gotten any more democratic since. Increasingly, the status of China

as a political-economic entity is being regarded as „exceptional‟ and the CCP has proven itself the bane of those who thought

communist rule might end in the twentieth century. (Gallgher 2002, P. 339) Francis Fukuyama, in his now infamous paper

„The End of History?’ prophecies the imminent universalization of Western liberal democracy and the establishment of a

„universal homogenous state‟. In such a state, “all prior contradictions are resolved and all human needs are satisfied”.

Because the struggle over „large issues‟ has abated, Generals and Statesmen have been robbed of their relevance. Fukuyama

characterizes this point in time as the “end point of mankind‟s ideological evolution.”95 This vision rests upon the assumption

that the “twin principles”96 of liberty and equality are infallible and that any remaining conflicts are the solely the result of

improper implementation of these principles. Behind this idea reside other older concepts. “Both Hegel and Marx believed

that the evolution of human societies was not open-ended, but would end when mankind had achieved a form of society that

satisfied its deepest and most fundamental longings.”97 The study of Fukuyama is significant when trying to understand China

because it strips away the veneer of plausible deniability regarding the CCP‟s desire to change. Fukuyama holds it to be self-

evident that proxy-solutions such as the granting of economic freedoms and a policy of non-intervention in citizen‟s lives can

placate, but never truly satisfy. Economic realities and the “struggle for recognition”98 will inevitably make themselves felt in

the People‟s Republic because they are constantly resurgent. The hourglass turned on the CCP back at Tiananmen, and the

struggle begun there has yet to end.

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