Deng Xiaoping recognized the need to restore a sense
of “socialist legality” and credibility to a system that was
on the verge of breakdown and hoped that rapid economic
growth would satisfy the Chinese people and prevent
them from demanding political reforms. The post-
Mao leaders demonstrated a willingness to place
economic performance over ideological purity. To stimulate
the stagnant industrial sector, which had been under
state control since the end of the era of New Democracy,
they reduced bureaucratic controls over state industries
and allowed local managers to have more say over prices,
salaries, and quality control. Productivity was encouraged
by permitting bonuses to be paid for extra effort, a policy
that had been discouraged during the Cultural Revolution.
State firms were no longer guaranteed access to precious
resources and were told to compete with each other
for public favor and even to export goods on their own
initiative. The regime also tolerated the emergence of a
small private sector. Unemployed youth were encouraged
to set up restaurants, bicycle or radio repair shops, and
handicraft shops on their own initiative.
Finally, the regime opened up the country to foreign
investment and technology. The Maoist policy of selfreliance
was abandoned, and China openly sought the
advice of foreign experts and the money of foreign capitalists.
Special economic zones were established in urban
centers near the coast (ironically, many were located in
the old nineteenth-century treaty ports), where lucrative
concessions were offered to encourage foreign firms to
build factories. The tourist industry was encouraged, and
students were sent abroad to study.
The new leaders especially stressed educational reform.
The system adopted during the Cultural Revolution, emphasizing
practical education and ideology at the expense
of higher education and modern science, was rapidly
abandoned (Mao’s Little Red Book itself was withdrawn
from circulation and could no longer be found on bookshelves),
and a new system based generally on the Western
model was instituted. Admission to higher education
was based on success in merit examinations, and courses
on science and mathematics received high priority.
No economic reform program could succeed unless it
included the countryside. Three decades of socialism had
done little to increase food production or to lay the basis
for a modern agricultural sector. China, with a population
now numbering one billion, could still barely feed itself.
Peasants had little incentive to work and few opportunities
to increase production through mechanization, the
use of fertilizer, or better irrigation.
Under Deng Xiaoping, agricultural policy made a rapid
about-face. Under the new “rural responsibility system,”
adopted shortly after Deng had consolidated his authority,
collectives leased land on contract to peasant families,
who paid a quota as rent to the collective. Anything
produced on the land above that payment could be sold
on the private market or consumed. To soak up excess labor
in the villages, the government encouraged the formation
of so-called sideline industries, a modern equivalent
of the traditional cottage industries in premodern
China. Peasants raised fish or shrimp, made consumer
goods, and even assembled living room furniture and appliances
for sale to their newly affluent compatriots.
The reform program had a striking effect on rural production.
Grain production increased rapidly, and farm income
doubled during the 1980s. Yet it also created problems.
In the first place, income at the village level became
more unequal as some enterprising farmers (known locally
as “ten thousand dollar” households) earned profits
several times those realized by their less fortunate or less
industrious neighbors. When some farmers discovered
they could earn more by growing cash crops or other specialized
commodities, they devoted less land to rice and
other grain crops, thus threatening to reduce the supply
of China’s most crucial staple. Finally, the agricultural
policy threatened to undermine the government’s population
control program, which party leaders viewed as
crucial to the success of the Four Modernizations.
Since a misguided period in the mid-1950s when Mao
had argued that more labor would result in higher productivity,
China had been attempting to limit its population
growth. By 1970, the government had launched a
stringent family planning program—including education,
incentives, and penalties for noncompliance—to
persuade the Chinese people to limit themselves to one
child per family. The program did have some success, and
the rate of population growth was reduced drastically in
the early 1980s. The rural responsibility system, however,
undermined the program because it encouraged farm
families to pay the penalties for having additional children
in the belief that the labor of these offspring would
increase family income and provide the parents with
greater security in their old age.
Still, the overall effects of the modernization program
were impressive. The standard of living improved for the
majority of the population. Whereas a decade earlier the
average Chinese had struggled to earn enough to buy a
bicycle, radio, watch, or washing machine, by the late
1980s many were beginning to purchase videocassette
recorders, refrigerators, and color television sets. The
government popularized the idea that all Chinese would
prosper, although not necessarily at the same speed. Earlier
slogans such as “Serve the people” and “Uphold the
banner of Marxist-Leninist-Maoist thought” were replaced
by others that announced that “Time is money”
and instructed citizens to “Create wealth for the people.”
The party announced that China was still at the “primary
stage of socialism” and might not reach the state of utopian
communism for generations.
Yet the rapid growth of the economy created its own
problems: inflationary pressures, greed, envy, increased
corruption, and—most dangerous of all for the regime—
rising expectations. When the economy failed to live
up to those expectations, as in the late 1980s, disillusionment
ran high, especially in the cities, where high
living by officials and rising prices for goods aroused
widespread alienation and cynicism. Such attitudes undoubtedly
contributed to the anger and frustration that
burst out during the spring of 1989, when many workers,
peasants, and functionaries joined the demonstrations in
Tiananmen Square against official corruption and oneparty
rule.
During the 1990s, growth rates in the industrial sector
remained high as domestic capital became increasingly
available to compete with the growing presence of foreign
enterprises. The government began to adopt a serious
attitude to the need to close down inefficient state enterprises,
and by the end of the decade, the private sector,
with official encouragement, accounted for over 10 percent
of the gross domestic product. A stock market
opened, and China’s prowess in the international marketplace
improved dramatically.
As a result of these developments, China now possesses
a large and increasingly affluent middle class. The
domestic market for consumer goods has burgeoned, as
indicated by the fact that over 80 percent of all urban
Chinese now possess a color television set, a refrigerator,
and a washing machine. One-third own their homes, and
nearly as many have an air conditioner. Like their counterparts
elsewhere in Asia, urban Chinese are increasingly
brand-name conscious, a characteristic that provides
a considerable challenge to local manufacturers.
But as Chinese leaders discovered, rapid economic
change never comes without cost. The closing of staterun
factories has led to the dismissal of millions of workers
each year, and the private sector, although growing at
more than 20 percent annually, is unable to absorb them
all. Discontent has been increasing in the countryside as
well, where farmers earn only about half the salary of
their urban counterparts (in recent years, the government
tried to increase the official purchase price for grain
but rescinded the order when it became too expensive).
China’s recent entry into the World Trade Organization
(WTO) may help the nation as a whole, but is less likely
to benefit farmers, who must now face the challenge of
cheap foreign imports. Taxes and local corruption add to
their complaints. In desperation, millions of rural people
have left for the big cities, where many of them are unable
to find steady employment and are forced to live
in squalid conditions in crowded tenements or in the
sprawling suburbs. Millions of others remain on the farm
but attempt to maximize their income by producing for
the market or increasing the size of their families. Although
China’s population control program continues to
limit rural couples to two children, such regulations are
widely flouted despite stringent penalties. Chinese leaders
must now face the reality that the pains of industrialization
are not limited to capitalist countries.
World History
