Even the economic collapse and millions of deaths caused by the "Great
Leap Forward" off 1958-1961 did not challenge the legitimacy of the regime.
De-Maoisation
But doubts began to spread among the population, and particularly among Party cadres.
It was the Cultural Revolution which completely transformed the population'sperception of the regime. This period, in all its complexity, with its multiple tendencies, carried by and torn appart by many concealed passions and interests, had one indisputable result: a serious decline in the legitimacy of Communist power.
Mao, the indisputable victor of the conflicts during the Cultural Revolution, was now percieved as a despot to be feared, as an absolute master. The population was terrorised and passive, and longed for far reaching changes. The silence of the population could no longer be taken as assent. The urban world (20% of the population) lived a relatively privileged life, completely separated from the rural universe which lived off its local resources and was forcibly confined to the villages (access to the towns was practically impossible for the peasants). An increasingly inefficient bureaucracy of party cadres governed (or tried to govern) every aspect of Chinese life. They exerted a strict tutelage over the working class, which was favoured economically in comparison to the peasants, but which, like the peasants, was deprived of political and social autonomy.
Towards the end of Mao's life, sections of the state apperatus began to undermine Maoist directives, even while paying lip service to them.
Recent Chinese history would not have known such a brusque turning if the population, above all its urban component, had not emerged traumatised from the Cultural Revolution. This period, which officially ended with the death of Mao in 1976, but in fact ran out of steam in 1972, only three years after it was unleashed, was experienced as a nightmare (at best a dream which became a nightmare), by both actors and victims (the student Red Guards, numerous cadres of the CCP, certain unfavoured sections of the working class). For the majority of the population (the peasants), the Cultural Revolution was perceived as an incomprehensible political action, which had little direct effect on their lives.
Whatever the meaning of the Cultural Revolution, or the genuine anti-bureaucratic passions which Mao unleashed and manipulated, the essential effect was that, at the end of the Mao era, the Communist regime was delegitimised. The population was subjected to a very close police and bureaucratic tutelage; but the "mandate of heaven" - the survival of the regime - was in question for the people as much as for numerous party cadres, misled during the Cultural Revolution and disorientated since.
The society on which the lid was being held down was a boiling pot. Mao's successors knew that dramatic and visible steps must be taken to maintain their control. As they says, "the more things change, the more they stay the same."
In other words, de-Maoisation was not motivated primarily by economic factors. True, autarky was not sustainable. Certainly, the dissatisfied peasantry, cramped by the low incentive system of the communes, and practically imprisoned in the villages, was not very productive; agriculture hardly kept progress with the population. Yes, the Soviet-inspired "command economy" was in the process of exhausting its potential for development. But none of these evils implied immediate transformations. After all, the industrial economy was still developing rapidly in the mid-1970s; agriculture still produced enough of a surplus to feed the urban population; rural dissatisfaction did not mean a visible and immediate risk of revolt; and a less strict economic autarky could continue for some time.
In fact, the reforms were based on the elite's perception of political and social factors. The regime had to initiate change nues rocker as e Zhang Kai The price index for consumer goods rose 27.7% between October 1993 and October 1994. In nine major cities, the increase was over 30%, and in Chongquin City 38.2%. The main victims of soaring inflation and devalued currency are the general population. Official claim that average incomes are rising faster than inflation are based on manipulated statistics. And the behaviour of the 'average' wage is irrelevant for the mass of citizens given the sharpening differentiation in salaries. What we do know is that in Sichuan province, 45% of households experienced a decline in real income. The same is tru of cities like Taiyuan, Nanjing and Urumqi. The cause of inflation is not high salaries or bloated social security, health care or education. Instead, the cause can be found in the model of economic growth being persued by Beijing. Since 1980, the economy has grown by an average of 9.3% per year, but the China Peoples' Bank has increased the money supply by over 20% per year!. This reflects the rapid increase in investments in fixed assets. Despitethe introduction of regulations which should have caused a dramatic decline, fixed assets conomy overheats increased over 37% in 1993, and by at least as much in 1994. At the same time, the liberalisation of foreign currency markets led to a net inflow of US$23 billion in the first 10 months of 1994. This helped increase foreign currency reserves by 110%, to almost US$50 billion. The Chinese currency (RMB) released to cover these new funds was equivalent to 700-800 billion yuan - about 20% of the total already in circulation. This flood of new notes pushes prices up. With most prices not controlled, this means an increase in costs to the public, rather than an increase in state subsidies. A top level meeting on inflation closed December 1st with the brief press statement that Jiang Zemin, Li Peng and Zhu Ronji had each made an "important speach." Contrary to usual practice, none of these texts was published. This suggests that they contain important differences. It seems that the Party center is finding it more and more difficult to justify its "socialist" market reforms. * Notes 1. MO 24.7%, M1 20.6%, M3 25.3%, according to Deputy Director Dai Xianglung. Reprinted from October Review, vol.21 issure 5/6 1994
International Viewpoint #263 February 1995 31
without delay or risk being dragged into changes against its own wishes. A consensus was fairly quickly established in the highest spheres of power to eliminate the most Maoist current (the "Gang of Four"), to dispose of Mao's immediate successor Hua Guofeng, an opportunist who owed his entire career to Mao, and to replace them by a reformist team headed by Deng Xiaoping! , who seemed capable of assembling a broad coalition of CCP cadres.
The essential for the party-state was to renew minimal links with the population, to render the regime once again presentable, and in the process to deal with the malfunctionings of the system. Despite Mao's criticims of the Soviet model, China faced more or less the same problems as the other post-capitalist societies. These problems stemmed from a more or less strict application of the "command economy" and the police, bureaucratic and authoritarian straitjacketing of the population (the concentration camp system, controls at the workplace, and the "houku" residence certificate, which blocked all geographical mobility.
The reformist project was accepted by consensus among the Party elite once the more outspoken Maoists were overthrown or imprisoned) and launched by Deng at the end of 1978. The aim was to render less strict the control of economic life, to enlarge the sphere of economic initiative of the directors of the units of production in the town and the countryside. The goal was to introduce also a form of "system of responsibility" in place of a passive obedience to orders from above. In this context, the reintroduction of some market mechanisms into economic life was supposed to render more visible the needs of the population, and ensure that they be satisfied better and quicker. While the centrally-planned sector was to remain at the heart of the economy, there was to be more flexibility, and greater emphasis on light industry and small-scale rural enterprises. In other words, the reformers did not want to challenge the regime, just to improve it Economic reform
The reform was an attempt to preserve and perpetuate the bureaucratic power of the party-state; the social domination of the cadres of the party over the Chinese people. The objective was also the economic opening of China to the world. based on the belief that it was impossible to maintain economic autarky indefinitely. This autarky was in any case incompatible with the political opening launched by Mao himself in 1970-71, and symbolised by U.S. President Nixon's visit to China at the beginning of 1972.
The reformist team wished to obtain a rapid increase in the standard of living, in parallel with a loosening of political and economic controls, and an economic and political opening to the external world. In fact history took a very different course.
The reform in its first stage produced in effect few results in the cities and the industrial sector - the heart of the system. Faced with a traumatised population and a fearful Party, and lacking the technical knowledge to manage such changes, the regime advanced prudently, multiplying local experiences while avoiding generalizations (which had been so costly during the Great Leap Forward). This prudence led to a semi-stalemate; the conservative and incompetent apparatus blocked the reform of the state enterprises, and used bureaucratic chicaneries to block the reemergence of petty private commerce and enterprise, both re-legalised for the first time since the beginning of the 1950s. Three years after the launching of the reform, by 1982-83, it had virtually come to a standstil, as far as the towns and industry were concerned. Quiet revolution in the countryside
But to the regime's suprise, changes in the countryside pushed the reforms further than the Party has proposed. By steady and growing pressure, the rural population imposed a non-violent decollectivisation of
Party and THE RELATIONSHIP between the Communist Party and Chinese society has always been complicated. Both have developed since 1949, partially in the same direction, and under the influence of their mutual interaction. Chinese society does not present a total separation between "them" and "us," even if every individual knows his place in what is still a strict and authoritarian hierarchy. The Communist Party, which in itcal forms large and itself forms a large ana complex society, has been strongly influenced by the evolution of the widder society. Despite the constant efforts of the higher-placed cadre to keep the "leaders" and the "followers" appart, Party members have been affected by the expectations and needs of the population, and by the blind pressure this exercises on those who govern a country like China. Industrialisation and modernisation have had a marked effect on Chinese society, at least in the cities. DeMaoisation has become irresistible: personal, intellectual and sexual liberties have gained new space. This is in part due to the rejection of the regime provoked by the Cultural 32 International Viewpoint #263 February 1995 population were ready to attempt something which went beyond Maoism. All this without necessarily rejecting Mao himself, or indeed of openly giving a name to what one was doing and dreaming; ie. to leave "actually existing socialism benina, "antally stin socialism" behind, and build some form of capitalism. It wasn't just the Party which refused to see where it was going, or refused to give the new dynamic a name in order not to frighten those who might be opposed to the restoration of capitalism. After all, the population itself was less interested in the nature of capitalism, or of any other system, than in the practical and immediate results any new system offered. The pragmatism of Deng is based on an appreciation of the pragmatism of the population, which is inpregnated with peasant values, and where town-dwellers are only one generation removed from their rural roots. * [RL]
Chinese society does not present a total separation between "them" and "us"
Revolution, but also, paradoxically, to the experience of the masses of young Red Guards, who's first taste of political chaos, autonomy, and the loss of power of bureacrats small and large was precisely during the Cultural Revolution. During the 1980s, many cadre and a good part of the During the 1980
Revolution, but also, paradoxically, to the experience of the masses of young Red Guards, who's first taste of political chaos, autonomy, and the loss of power of bureacrats small and large was precisely during the Cultural Revolution. During the 1980s, many cadre and a good part of the Chinese society does not present a total separation between "them" and "us"
the land by about 1982. The regime had not envisaged and did not want this return to family agriculture, but accepted it, in view of the remarkable economic results obtained by the peasants. In effect, the peasants transformed the "responsibility system" proposed by the Party into a return to family-based agriculture. The land remained state property in principle, but was to all extents and purposes privatised by the peasants.
The rural population immediately responded to decollectivisation, the reconstitution of agricultural markets, the possibility to create small private and cooperative enterprises and trading structures, in the hope of improving their standard of living.
De-collectivisation, the rapid rise in the peasant standard of living, and the decline in social tensions in the countryside changed the face of China. After thirty years of a "socialist" system based on industry and the towns, China was again an ocean of small peasant proprietors. The logic of these rural reforms began to undermine, slowly, the basis of state "socialism."
Why did the Party accept the unexpected privatisation of land and the remergence of petty capitalism in the countryside? The desperation of the Communist Party, and the disorientation of its members after the Cultural Revolution, are only partial explications. The main explaination was that Communist leaders judged (correctly) that better-nourished but socially fragmented peasants were not a threat for the regime, even if they were no longer subject to tight party control. Chinese history suggested to the bureaucrats that only a desparate peasantry could pose a threat to the survival of the ruling dynasty. In other words, the capitalist renaissance in the countryside was not seen as a mortal threat for the regime, but as an element which improved its chances of survival. setorm in the town and industr
1984 was a record year for agricultural production. The success of reforms in the countryside encouraged the reformers to retake the offensive against conservative forces in the towns and industry. Before, reformers had tried to introduce market mechanisms to help regulate an economy still subordonate to the plan. But the de facto privatisation of agricultural land in a country where 80% of the population live in the countryside, coupled with the introduction of market mechanisms in the towns, meant a mutation of the original reform project. What started to happen was nothing less than the unacknowledged restoration of capitalism.
At this point, everything started to go wrong. While the reforms led to important changes in industrial and urban life, the core of the state sector hindered the changes, and distorted the reforms in the benefit of the cadres. The majority of cadre wished to hang on to the past privileges of power and felt themselves incapable of adapting to the new rules. A smaller group tried to leech off the reforms, unleashing a spiral of corruption. The weakest fraction, initially, was made up of those working for a de facto privatisation of the state economy, and their personal transformation into capitalists, at that time more or less illegally Breaking the iron rice bowl
The workers in the core state sector have waged a lively and largely successful stuggle to protect the gains of the Maoist period; such as the guarantee of a job for life, equality of wages, social security, subsidised housing or food.
This is not the case of the "collective sector" - enterprises which belong to the organs of local and regional government, and workers' collectives. It is here that one finds a superexploitation of labour comparable to the horrors of the 19th century in Europe, and common to all capitalisms in their early phase. This new sector, in part composed of workerpeasants newly arrived from the villages, is tending to absorb the majority of the working class. It already counts 36 million people in the cities; and 90% of the 110 million people who work in rural enterprises. In short, the citadel of the state sector is besieged and menaced.
The new Chinese capitalists
Small-scale, often family based capitalism (defined as private enterprises employing seven persons or less, employs nearly 30 million people in some 18 million enterprises. Some 240,000 Chinese-owned private companies employ eight people or more, (for a total of 3.5 million workers). Finally, about six million Chinese work for foreign-owned or joint venture capitalism (in 170,000 enterprises). This capitalist sector is far from insignificant. At the same time, for a country like China, it is still very small.
The quickest growing capitalist companies are those linked to the high cadres of the CCP, either through taking advantage of the progressive privatisation of the economy in the cities, or though parasitic control of a state enterprise. Equally successful are the big importexport companies, or the international investment enterprises (such as CITIC) set up by the state or the provinces and directed by high ranking Beijing or regional bureaucrats. Foreign capital
Foreign capital began to flow towards China at the end of the 1980s. 'Only' US$42 billion of foreign investment took place between 1979 and 1991: in 1992 alone US$58 billion was invested. And in 1993, over US$100 billion of foreign capital arrived in China. Most foreign investors are ethnic Chinese, from Hong Kong, Taiwan or the diaspora. Foreign capital usually works through joint ventures with a local partner. October Review
Chinese-language analysis of
Hong Kong, China and the world
GPO Box 10144, Hong Kong
International Viewpoint #263 February 1995
33
The future of Chinese capitalism depends on the evolution within the top nomenklatura and particularly the sons (less often the daughters) of the top Party chiefs. The "Party of the Princes" is preparing the total restoration of capitalism in China, but keeping its options open. The state has always played a considerable role in economic life (during the imperial period, under Chiang Kaishek's Guomindang (1928-1949) and under Mao). Not suprisingly, a number of top bureaucrats and capitalists favour some form of state capitalism, or private capitalism under state supervision. Any new capitalist China must take account of the particularities of the long Chinese past, including the traditional preeminence of the state and the mandarin-civil servant. Not surprisingly, top leaders of the Chinese Communist Party are literally fascinated by the Taiwanese model. Where is the opposition?
Despite the generalised social crisis, discontent is not yet converging in a way that could bring down the regime. Nevertheless, the malcontents are more and more numerous. After benefiting from the early reforms, many peasants are now encountering abuses of the tax system, stagnation of the standard of living, and a growing gap between the price of agricultural products and those of the goods they buy. They sense that the countryside is again falling back in relation to the evolution of urban life.
At the same time, many city dwellers are also dissatisfied. Workers in the core state-owned enterprises are threatened with the loss of their protected status, while workers in the "new sectors" face conditions of superexploitation - it is no longer uncommon to work 16 hours a day, 6 or7 days a week.
The number of strikes and protests by "new sector" workers is increasing. The creation of embyonic structures to defend workers' rights continues. As for the official trades unions, they remain inactive, or stand clearly behind the bosses. It is not uncommon for the director of an enterprise to combine his managerial role with the positions of Communist Party secretary in the enterprise and Chairman of the trade union.
Even the small capitalists are
In recent issues of International
Viewpoint...
For a different evaluation of current reforms in China, see The costs of growth (IV 259, September 1994) and
China in transition (IV 260), both by
Livio Maitan, author of II dilemma cinese (Rome 1994)
complaining. Bureaucrats incesantly demand bribes; cadres bully them or illegally hinder their economic activity.
On the margins of society, tens of millions of unregistered peasants scratch out an illegal existence in the towns. An old-new Chinese "milieu" of delinquency and gangsterism is developing.
The China which affirms itself more and more on the international scene, is still a nation menaced by a vast social crisis, five years after the explosion at Tiananmen. The end of the regime
The country is at a turning point. Choosing a successor to Deng, is more than a struggle between factions, a difficult and uncertain task in itself. The end of Deng's reign will signal the end of the regime. If it can take new initiatives, it may succeed in managing the mutation of the system and of society; and transform itself into a capitalist elite. Otherwise, it will dissapear.
As in many other countries, the perspective of social emancipation, of a liberating socialism is not an imminent possibility. Nevertheless, a popular explosion cannot be completely ruled out in the current context. It remains one of the great fears of the regime as Deng fades away. * Roland Lew teaches at the Université Libre, Brussels
Notes
1) Born in 1904, Deng Xiaoping is an old man at the top of a pyramid of old men. Deng became a Communist in the early1920s, and rose through the party-state structures as a faithful Maoist. He carried out some of Mao's dirty work (including the purging of the intellectuals in 1957), before taking his distances from the Great Helmsman after the Great Leap Forward (1958-1960). Not surprisingly, he was one of the most prominent victims of the Cultural Revolution. Deng, who turned 90 years old in August 1994, has not been seen in public for over a year. No successor is apparent
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