The old guard THREE years after the bloody events of Tiananmen fades away Square and the repression of the student and popular movement in China, nothing is yet resolved. The conquerors are less triumphant than ever: it is rather their factional adversaries who have the wind in their sails, enjoying the solid support of that formidable tactician Deng Xiaoping.
The rebels of 1989 are silenced or repressed - with some of them who have connections in high places turning to business. Both social peace and the regained strength of the "reformers" — who wish to combine economic and social changes with preservation of political continuity involving a capitalist "reconversion" of a part of the Communist bureaucracy - are underpinned by current it is often, on the other hand, powerless in the depths of country, and is frequently thwarted by provincial authorities who are masters of their own regions. These regional powers, even when they are not especially enthusiastic about the content of the reforms, fear the recentralizing tendencies of the prime minister Li Peng - and this is not to mention provinces such as Guangdong and its capital Guangzhou, or Zhejiang, which have become great free trade zones for capitalism.
The conservatives are still able to win battles and exercise the power to make a formidable nuisance of themselves, but the whole trend of the times is against them; they have no clear project of their own nor do they have real support in the country.
It seems that they have even lost the support of the army. In order to bring this about, Deng has had to agree to a Sharp increase in the military budget sharp increase in the military budget which has no justification in the current international situation. Given that its economic record is far from negative, the pitiable state of the Li Peng team may seem strange. The economy is far from stable and the ills of the past remain, but, nonetheless, the Chinese economy has performed better than expected over the past three years, to the surprise of foreign observers.
A fragile dragon
While the achievement may be fragile, for the moment China is among the "dragons" of Asia, with 6 to 7% growth a year. Even more unexpectedly, the regime has succeeded in bringing inflation down sharply, demonstrating that it has some control over the economy and thus some capacity to exact obedience, something that was by no means clear three years ago.
However, if these positive results are looked at a little more closely, it is clear that they reflect the victory of Li Peng's opponents. The necessity of the struggle against inflation and austerity was recognized by all currents and applied since 1988.
But the attempts at recentralization and even partial recollectivization in the countryside promoted by Chen Yun or Li Peng have run up against tough and ultimately victorious resistance by an irresistible alliance of new economic forces in the towns and countryside, regional officials attached politically and materially to their newly won autonomy and peasants opposed to any measures of recollectivization, however limited. This allianeconomic successes. ROLAND LEW — May 7, 1992. A T THE TOP levels of the state the pendulum continues to swing. Currently, Deng Xiaoping, through a rapid and resolute offensive, has imposed a return to a line clearly favourable to the "reformists" Their project is increasingly explicitly that of a transition to a type of state capitalism, favourable to private initiatives, open to the outside world and with a firm hand on the political tiller, exercised by the "Communists" at the centre (who, in the case of success, will adopt another name). Starting with a visit by Deng in January to the southern provinces most heavily involved in the reform, the offensive was pursued from March onward by a big media campaign designed to pressure the central apparatus to give way. It is revealing of the fragility of the situation that, according to Le Monde of April 22, 1992, "the new offensive's success remains tied to the health of Deng Xiaoping" - and one may add, that of his opponents. In China the future of a billion people depends on the remarkable longevity of a few very old men. Indeed, it is being said that Deng has gone on the offensive because he has little time left - and because many of his opponents are no longer in a fit physical state to fight back. Deng (88 years of age) will carry the day at the forthcoming Chinese Communist Party (CCP) congress in October if he 6 gets the support of Peng Zhen (90) and
Bo Yibo (85), or if he can really count on Yang Shankun (85), China's president, one of the main organizers of the 1989 repression, and somebody who is known to have influence on the army, which is expected to play a crucial role in the succession. And then the big question of Chinese politics; can Deng outlast his conservative rival, Chen Yun (87)?
The whole population is watching its leaders die; a spectacle that recalls the last years of Mao, with a vast gulf between the regime and the rest of society, including many CCP cadres. Irresistible social pressure
However Deng's current successes are not due only to his undoubted tactical skill. He owes it above all to the mounting pressure of society and the growing power of those sectors of the apparatus who support reform, and who want to narrow the gulf between a profoundly changed Chinese society and the atrophied apparatus, which talks and thinks in a way totally out of touch with the reality of the country. Furthermore, significant sections of the apparatus are already far along the road to their social reconversion. The battle at the top is becoming more and more ferocious as the conservative current fights with its back to the wall. While it continues to control many command structures at the centre, at the summit of government and in the propaganda apparatus,
International Viewpoint # 230
June 8, 1992
ce moreover enjoys the support of Deng and many other top cadres.
Post-1989 China has continued to open up economically to the outside world. Furthermore it has successfully undertaken an aggressive policy of exporting low technology goods — exports doubled between 1985 and 1990, at a time when imports were sharply cut by the austerity policy.
More striking still, the trade balance was in the black in 1990 and 1991 and China is, after Japan, the country with the biggest surplus in trade with the United States (+$11.5bn in 1990). This is a much more serious source of tension with the US than human rights violations, constituting a serious crime of disrespect for US economic power and big business.
This policy of taking over the low tech crannies vacated by countries like Singapore, Taiwan or South Korea was first proposed by Zhao Ziyang, the former reformist secretary of the CCP ousted in spring 1989; it thus represents a victory for his line. Even more worrying for Li Peng is the fact that most of the economic growth is provided by the nonstate sector companies and the cooperative sector (which are in fact more or less privatized).
While the written projects for economic development, such as the 1991-95 five-year plan, were the result of laborious compromises between conservatives and reformers, the policies actually put into practice have tended towards an extension of reform and towards the progressive entry of China into the world capitalist economy, and thus subordination to its logic. Deng himself recently made a self-criticism for not having allowed the great industrial centre of Shanghai to earlier become a site of capitalist activity (a "special economic zone") capable of attracting foreign capital.
### Pathetic struggle
While the conservatives continue their somewhat pathetic struggle to hold back an apparently irresistible tide, there is an absence of autonomous activity within society.
The regime has not only won economic victories —which, however fragi-
CHINA le, are precious for this profoundly discredited regime. It has also succeeded in breaking or diverting challenges to its rule. Social problems, the break down of social discipline, zones of insecurity in both town and country, worker resistance in the enterprises and intellectual disaffection continue, but there is no organized challenge. Furthermore, it seems that clandestine activity is not widespread.
This is the period of everyone for themselves. Some critics have turned
Democracy Most favore nation to business, others are simply discouraged. The intellectuals are turning away from politics as their forebears did after the disastrous beginnings of the first republic of 1912. Nor are there as yet any signs of worker selforganization.
There remains a considerable gulf between the energy of worker resistance at the rank-and-file level, a resistance which often has a very narrow focus, and the absence of any significant independent worker organization, whether as trade unions or in other forms. It is true that any efforts in this direction meet with swift and ferocious repression of a much more systematic kind than that employed against intellectuals.
This level of control of the situation is certainly temporary, but it has provided a welcome respite for a regime that looked on its last legs and ready to disappear beneath general opprobrium. The cities remain rebellious but the agitation there is economic, resulting from the population's various efforts to make ends meet. A select few meanwhile are able to profit from the pro-business atmosphere; in today's China one moves quickly from rebellion to the passion for business, from the exaltation of the mission of the intellectuals to praising the role of the businessman.
The countryside meanwhile is relieved by the failure of the attempts at resocialization (nobody dares use the term recollectivization any more.
Rural China has benefited significantly from a substantial rise in agricultural prices, a record harvest and an upturn in non-agricultural activity.
The significant rural small industrial sector, which had suffered under the post-1988 austerity policy, benefited from its subsequent relaxation. Those in the countryside have gained a degree of economic independence and freedom to run their own day-to-day affairs;
on the other hand, they do not challenge the regime.
This consent without approval, which is not without calculation, remains the regime's biggest strength; the political passivity of the three quarters of the country's population who live in the rural areas, and fear of instability are the regime's major weapons, far more than the army, which, in any case, is largely composed of conscripts from the countryside.
Sources of instability
All this does not mean that the vista for the regime is entirely rosy. There are still many sources of instability in the country.
Demographic, as is being constantly emphasized both inside and outside-
China.
Economic - inflation is taking off again (5 to 6% this year and rising)
and a mixed economy made up of a parasitic capitalism and a subsidized state sector which are always out of balance.
Social - with ever increasing inequality in this vast country where the social and geographical margins have been left to rot, provoking growing tensions with the national minorities which are strongly present on the periphery.
And political — with the unending war of succession which blocks off the search for new political openings and
7 must give rise to a great unknown that
June 8, 1992
CHINA / SRI LANKA frightens everybody both inside and outside China. The outside world is an important issue in itself. Li Peng has made increasing efforts to get the country out of its international isolation, first with some small successes and latterly with some bigger ones, such as his foreign tour, although even here some of his hosts felt obliged to mention the serious human rights problems in China.
But the essential fact is that a China which is economically open to the world cannot remain too long outside the international political game, at least in Asia.
This is all the more true in that, with the break-up of the USSR, China counts for less than it did on the global scene, being no longer indispensable to the USA in its system of anti-Soviet alliances.
Furthermore, China is surrounded by countries whose power is increasing, including Taiwan, whose independence movement, although supported by only a minority at the moment, is increasingly feared by China.
Beijing must re-enter the concert of nations to defend its interests and in particular find an answer to the new situation arising from the collapse of the USSR - a situation rich in both possibilities (the disappearance of a powerful enemy) and dangers (with the impact on inner China of developments in the Islamic republics of the former USSR).
Thus, China cannot retire into splendid isolation. It must and will pay its price for reentry into the world arena. And this does not work in favour of Li Peng, the symbol of the 1989 repression, the most hated man in the country, whose elimination would have symbolic weight, and would be a more credible sign of change than the recent successes of Deng, rendered uncertain by the latter's fragile state of health.
The regime has proved both more resistant and more flexible than expected — it has been pragmatic and shown a determination to get to grips with the processes of change.
Whether it will succeed remains an open question, but Chinese-style "really existing socialism" is in its death agony, even if the clinical moment of death is being postponed by fear of chaos, by bureaucratic manoeuvres and by the astonishing longevity of : some historic figures. * International Viewpoint # 230