CHINA UNDER DENG XIAOPING

(1976-1997)

After Mao Zedong died in 1976, Deng Xiaoping(DUHNG SHOW*PIHNG) emerged as China’s new leader. Although a Communist, Deng seemed willing to change the way of life imposed by Mao in order to make China into a more modern nation. Deng aimed to show that not all of Mao’s actions had been perfect. He allowed the people more freedom of thought, greater contact with other nations, and a new legal code. Although a lifelong Communist, Deng boldly supported moderate economic policies. Unlike Mao, he was willing to use capitalist ideas to help China’s economy. He also introduced greater economic freedom by permitting some limited private enterprises to exist.

THE ECONOMY UNDER DENG XIAOPING: Deng faced many economic problems when he replaced Moa as leader. The most serious problem was China’s growing population. Therefore, Deng changed Communism in China by adding some capitalist features to its economy.For example, farmers were now able to own land, people could run their own small businesses, and productive workers could earn bonuses. These reforms were quite successful. In addition, China started producing more radios, televisions, and other consumer goods to Western Countries like the U.S.

FOUR MODERNIZATIONS- ECONOMIC REFORMS OF DENG XIAOPING
Responsibility System
Allowed peasants to own land and keep the profits. / Incentive Program
The best and most efficient factory managers received bonuses. / Foreign Capital Technology
Foreign investment is encouraged in China.
Foreigners could set up their own business in special economic zones. / Entrepreneurship
Some private ownership of businesses was allowed to make and keep profits.
Outcome: Crop production increases / Outcome: Increases industrial production / Outcome: Helps Chinese businesses and industries to modernize. / Outcome: The amount and quality of goods increases

DENG XIAOPING’S FOUR MODERNIZATIONS OF CHINA:Deng supported the economic growth that been introduced after the Cultural Revolution and introduced a plan known as the Four Modernizations of China. The Four Modernizations called for progress in agriculture, industry, defense, and science/technology.

AGRICULTURE: The production of food became the nation’s highest goal. To increase food output, communes, were replaced by family-run farms that used land leased from the state. The farmers paid rend by delivering a fixed quota of food to the government. The government took some produce for rent but families could keep or sell the remainder. The farmers could then grow crops and sell them for a profit after paying their quote. Under this system, the food production increased by 50% between 1978 and 1984.

INDUSTRY: Managers were given the power to make industrial plants (factories) more efficient by setting their own production goals; they could also rely on supply and demand to determine their production levels. Individuals were allowed to own small businesses and private property. Foreign investment and technology were welcomed.

SPECIAL ECONOMIC ZONES: China's Special Economic Zones China's remarkable process of economic growth through globalization began in 1978 with the implementation of the "Open Door Policy". From the 1980s, special economic zones (SEZ) played an instrumental role in the integration of China to the global economy and in its economic development. Their setting aimed at attracting foreign investments and technology (many through the setting of joint ventures), provide employment, utilize Chinese and imported resources, and support capital formation. The bulk of the output was to be exported to foreign markets, underlining that SEZ were part of an export oriented strategy that has characterized many Asian economies since World War II (Japan being the first to develop such a strategy in the region). The following incentives were offered to foreign investors:

  • Labor. The ability to use the Chinese vast pool of low cost labor was a powerful incentive to locate in SEZs. Foreign firms have also the right to hire and fire labor, which was different from the then prevailing Chinese lifetime system of public or collective firms.
  • Land use. SEZs were physically developed as planned entities with infrastructures and access to a container port complex (airports played a more significant role later) so that parts and raw material could easily be brought in for processing and shipped to foreign markets. A degree of protection of private property was also significant, since until 2004 there was no constitutional protection of private property in China outside SEZs.
  • Tax incentives. SEZs offered reduced corporate income tax rate, including income tax exemptions for foreign nationals working in SEZs. No custom duties were levied on imported materials and parts as long as they were for re-exports.

The development of SEZ went through several stages which were linked with the setting and expansion of major container port infrastructure. By 1992, 60 SEZs have been set in China, including 5 initial SEZs, 15 coastal port cities, 8 river port cities, 19 inland cities and 13 border cities. Then, the process received wide adoption, particularly through the coastal provinces of China as many jurisdiction (provincial governments, municipalities, counties) started to develop and promote their own development zones. Ten years later, by 2005, there were 210 national development zones and 1,346 provincial development zones.China's geography of production is therefore strongly coordinated by its proximity to coastal areas and their capabilities to access global markets through port and airport terminals.

EFFECTS: Deng’s economic policies produced striking changes in Chinese life. As incomes increased, people began to buy appliances and televisions. Chinese youths began to wear more stylish clothes and listened to Western music. New hotels were built for the influx of foreign tourists who came due to China’s new policy of openness.

Deng’s economic reforms also produced a number of unexpected problems. As living standards improved, the gap between the rich and poor widened. Increasingly, the public believed that Communist Party officials profited from their positions. The new policies admitted not only Western investments and tourism, but also Western political ideas of democracy that did not line up with the Communist government. As more Chinese students studied abroad, more learned about the differences. But to Deng, the benefits of opening the economy far exceeded the risks. Nevertheless, as Chinese students learned more about democracy, they began to question China’s lack of political freedom.

TIANANMEN SQUARE: (TYAHN*AHN*MEHN) New ideas entered China through the newly open doors to the west but despite these changes, critics of the Communist system were still arrested. However, new freedoms in economics led to ideas of freedom in government and thousands of people, including pro-democracy students, began to demonstrate.

PROTESTS IN TIANANMEN SQUARE: When Chinese students began to learn about democracy they wantedmore political freedom and civil rights for the Chinese people. In Beijing, (China’s capital city) in April 1989, over more than 100,000 Chinese students peacefully protested in Tiananmen Squarefor more democracy. The student protest won widespread support. When thousands of students began a hunger strike to highlight their cause, more Chinese poured into the square to support them. Many students called for Deng to resign.

Angered by these demonstrations, Deng declared martial law. He sent in about 100,000 troops and tanks to surround the square. Although many students left the square after martial law was declared, about 5,000 students chose to remain and continue the protests. The students revived their spirits by building the 33-foot tall statue named the “Goddess of Democracy.”

On June 4, 1989, the standoff came to an end. As the world watched, Premier Li Peng ordered tens of thousands of troops into the square to break up the demonstrations. Tanks smashed through barricades and crushed the Goddess of Democracy. Soldiers sprayed gunfire into the crowds of frightened students. They also attacked protestors elsewhere in Beijing. Many students were killed; others were executed after brief trials. Still others were arrested or never heard of again. “TheTiananmen Square Massacre” showed the world what Deng and the Chinese government would do when they believed that the Communist system was being threatened.

The attack on Tiananmen Square marked the beginning of a massive government campaign to stamp out all protest. Police arrested thousands of people. The state used the media to announce that reports of a massacre were untrue. Officials claimed that a small group of criminals had plotted against the government. Television news, however, had already broadcast the truth to the world.

The brutal repression of the pro-democracy movement left Deng firmly in control of China. During the final years of his life, Deng continued his program of economic reforms. In February 1997, after a long illness, Deng died. The Communist Party chosen Jiang Zemin (JEE*AHNG*ZEH*MEEN) to replaced Deng as president.

China Under Jiang Zemin (1997-2003)

Many questions arose after Deng’s death. What kind of a leader would Jiang be? A highly intelligent and educated man, Jiang had served as mayor of Shanghai. He was considered skilled, flexible, and practical. However, he had no military experience. So Jiang had few allies among the generals. He also faced challenges from rivals, including hard-line officials who favored a shift away from Deng’s economic policies.

Other questions following Deng’s death had to do with China’s poor human rights record, its occupation of Tibet, and relations with the United States. During the 1990s, the United States pressured China to release political prisoners and ensure basic rights for political opponents. China remained hostile to such pressure. Its government continued to repress prodemocracy movement. Nevertheless, the desire for freedom still ran through Chinese society. If China remained economically open, but politically closed, tensions seemed bound to surface.

In late 1997, Jiang visited the United States. During his visits, American protestors demanded more democracy for China. Jiang admitted that China had made some mistakes, but he refused to promise that China’s policies would change.

President Jiang Zemin and Premier Zhu Rongji announced their retirement in late 2002. Jiang’s successor was Hu Jintao. However, Jiang was expected to wield influence over his successor behind the scenes. Hu became president of the country and general secretary of the Communist Party. Jiang remained political leader of the military. Both supported China’s move to a market economy.

Another major issue for China was the status of Hong Kong. Hong Kong was a thriving business center and British colony on the southeastern coast of China. On July 1, 1997, Great Britain handed over Hong Kong to China ending 155 years of colonial rule. As part of the transfer, China promised to respect Hong Kong’s economic and political liberties for fifty years.

Many of Hong Kong’s citizens worried about Chinese rule and feared the loss of their freedoms. Others, however, saw the transfer as a way to reconnect with their Chinese heritage. In the first four or five years after the transfer, the control of mainland China over Hong Kong tightened.

Conclusion:

The case of China demonstrates that the creation of democracy can be slow, fitful, and incomplete process. Liberal reforms in one area, such as the economy, may not immediately lead to political reforms.

In China, there has been a dramatic reduction in poverty. Some experts argue that China managed to reform its economy and reduce poverty because it adopted a gradual approach to selling off its state industries and privatizing the economy rather than a more abrupt approach. At any rate, as the global economy slowed in the early years of the 21st century, China managed to maintain economic growth.