China: 1973-

The three years prior to Mao’s death in 1976, marked a time when the second echelon leaders were jockeying for position in the power struggle that would ensue. By the early 1970s, even Mao had become disenchanted with the leftist clique led by his wife, Jiang Qing. Also, the death of Lin Biao eliminated a very powerful force within Chinese politics. Therefore, the leadership succession was very uncertain.
Further complicating the picture was the decision to rehabilitate Deng Xiaoping and bring him back into the leadership sphere in 1973. Unlike Lin Biao, Deng had survived the cultural revolution living on a collective farm in South China. In 1974, Deng was named 1st Deputy Premier and Vice Chairman of the Central Milititary Affairs Commission. In early 1975, Deng was named Chief of Staff of the PLA and vice-chairman of the party Central Committee. This move was initiated by Zhou Enlai, but occured with the consent of Mao Zedong.

- Why was Deng rehabilitated. Well, first of all, he had a long and respected link with the Chinese military which was in a state of disarray and near rebellion in the aftermath of the Lin Biao affair. Secondly, in 1974, Zhou Enlai reiterated his 1964 call for four modernizations in China, agriculture, industry, the military and science and technology. As Zhou Enlai was dying of cancer at this time - he would pass away in early 1976 - Deng was seen as being the ideal person to bring this policy to bear after Zhou’s passing. Due to this statement by Zhou Enlai it has been asserted that he brought Deng back over Mao’s objections. However, this is not entirely accurate. Mao was also enthusiastic about bringing Deng back into the fold, he stated his faith in “that little fellow” prior to Deng’s redmission to the party. However, as was the case throughout his life, Mao’s support proved to be short lived.
Deng had convened a series of conferences in 1975 which produced a call for a the primacy of results over political correctness and economic development over ideological purity. Had this call been heeded it would have resulted in a complete reversal of the cultural revolution. This drew the ire of the leftists, led by Jiang Qing and the Gang of Four along with Kang Sheng. Following the death of Zhou Enlai in early 1976, they were able to convince an ailing Mao Zedong that Deng should once again be purged. This happened in June of 1976.

1976 - A Watershed Year For China
1976 proved to be a very turbulent year for China. Not only was there an earthquake in North China that killed over a quarter of a million people, but a large component of its senior leadership passed on - Zhu De, Zhou Enlai and Mao. This left the country in a political shamble with three factions each vying for succession to Mao’s throne.
In the spring of 1976, there were three factions jockeying for the control of China in the post-Maoist period.
1. Deng - who had the support of the military, the state council and many of the senior bureaucrats. “Rightists”
2. Jiang Qing and the leftists - They had sought to put forward Zhang Chunqiao for the Premiership which had come vacant with the passing of Zhou Enlai. This group controlled the party propaganda machine. “Leftists”

3. The Whatever Faction - Led by Hua Guofeng. Hua was a relatively recent addition to the Chinese leadership, having been a former Party Secretary in Mao’s home province of Hunan. He had earned Mao’s favour by heading a commission which looked into the death of Lin Biao and producing the proper results. Mao allegedly chose Hua as his successor “With you in charge, I will be at ease”. Hua represented a compromise between the leftists and the rightists. Leftists did not believe that he would present an obstacle to their plans and eventually supported him to check Deng. This faction was called the “whatever” faction, due to its tendancy to say “whatever Chairman Mao wanted”.

Tiananmen Square Incident #1
By the spring of 1976, the leftists were attacking the memory of Zhou Enlai in an effort to discredit Deng Xiaoping.
These attacks were taking place in the party controlled magazines and prompted a response from the Chinese people, many of whom journeyed to the Heroes Monument in Tiananmen Square and place wreaths and garlands on the monument dedicated to Premier Zhou. The leftists claimed that these were the works of state enemies and ordered them removed, on April 5 (the day after Qingming) a crowd of people milled around the monument and demanded that the wreaths be returned, later in the day the police intervened and the protesters were beaten and thousands were arrested. Following the disturbance, Deng was dismissed from all of his party posts, he spent the next 6 months in seclusion waiting for Mao to die.
Deng had been blamed for the demonstration, the leftists suggested that this was a clear attempt to discredit them. Reality, never underestimate Deng Xiaoping, possible but one should not underestimate the affection that the Chinese people held for Zhou Enlai - untouched by any of the previous leadership debacles.

After purging Deng, with the compliance of Hua Guofeng, the leftists were very sanguine about their political futures. Deng was now out of the picture and with Zhou Enlai dead, they did not feel that he could make another comeback. Hua was a rather uninspiring bureaucrat, and the Gang believed that he would pose no threat to their long term ambitions.
Mao eventually went to meet Marx on September 9, following his death the radicals sent out messages to the state organs and through the party newspaper intimating that they were in charge and decisions should be routed through them. This gave Hua Guofeng and the other leaders a chance to do what none had dared try when Mao was alive - to arrest the gang of four. Actually, while it is unlikely that Mao would have approved of the arrest of his wife, no one was quite certain how he would react, he was certainly not pleased with his wife and the Gang of Four, but the question was never put to him.
Hua in 1977 - “In 1976, as Chairman Mao’s illness worsened, the Gang of Four became more unscrupulous in their anti-party activities. However, in consideration of Chairman Mao’s health and with the overall interest in mind, Comrades of the Politburo, while adhering to principle, exercised restraint.”

Anyway, the Gang was arrested in early October and accused of plotting a putsch against the government. This was followed by the arrests of their supporters throughout the country. When this news finally was released to the Chinese people, mass celebrations ensued. The Gang was closely linked to the cultural revolution and eventually became scapegoats for the entire decade - Mao was not to be implicated.

However, the arrest of the Gang of Four did not mean an immediate rehabilitation for Deng. While he sent Hua a letter congratulating him on arresting the Gang and generally flattering him, Hua did not immediatelly reinstate Deng, despite the fact that Deng’s old allies in the military and in the bureaucracy were lobbying for this. Why Not? Well, he had taken an active part in the suppression of the protests in April and in Deng’s dismissal, to reverse himself would be either an admission that he had been duped by the Gang of Four, or that he had simply used this as an opportunity to get rid of a rival. If we assume the latter to be the case, then the question emerges of why Hua would suddenly no longer consider Deng a rival?
Eventually a deal was struck in 1977 that allowed Deng to resume his old offices and return to power. Hua would agree to admit that the 1976 demonstrations were simply an understandable show of grief for Zhou Enlai and Deng would agree to support Hua, admit to some past mistakes and not attack Hua’s statement that China must follow “whatever Chairman Mao instructed or approved.” Deng later neatly got around this last fact by instead stating that Chairman Mao’s work must be judged in its totality, rather than simple adherence to recent slogans, and after all had Mao not once said to “seek truth from facts”. This last statement would give Deng the necessary ammunition for the return to pragmatic policies which would come in the next year. Deng’s return was made at the 11th CCP Congress in August of 1977.

Deng’s Return
Following his return, Deng was able to promote some of his key supporters - Hu Yaobang being the most significant - to positions of responsibility. Hu was named in charge of the Party’s organizational committee, which gave him a great deal of influence in filling party positions. Articles also began to appear in the party papers criticizing those who “follow the wind”, an obvious reference to the whatever faction.

Hua sought to consolidate his fragile power base by attempting to craft his own cult of personality, by cloaking himself in the shroud of Maoist infallilibility. This was one of the key motivations behind his demand that Deng not criticize the choices to follow whatever Mao had instructed or approved. Of course, Hua’s leadership was one of the things that Mao had allegedly approved, and therefore, this could not come under criticism.
In 1978, Hua also sought to gain from the legacy of Zhou Enlai by announcing his support for Zhou’s call for an all around modernization of agriculture, industry, the military and science and technology by the year 2000. Of course, in and of itself, this call could hardly be seen as being controversial.
Hua sought to present himslef as the paramount leader by utilizing both the mantle of Mao and the reform policies of Deng. The former would serve to capitalize on Mao’s memory, while the latter was intended to eliminate Deng’s political base. Hua borrowed such ideas as: the acclerated acquisition of foreign technology, decentralizing economic management, adopting managerial responsibility systems (where the firms would be responsible for their own profits and losses - hopefully eliminating the need for state subsidies), expanding the size of the private plots for the peasants, allowing profits and losses to direct economic activity rather than the plan, and increasing the incentives for increased production by the widespread employment of bonuses as rewards for individual and enterprise production. This would make up the early basis for the modernization campaign that Deng would later put into practice. Hua also called for increased intellectual freedom to begin to repair the damage that the cultural revolution had wrought on the intelligentsia of China.

While Hua had coopted many of Deng’s beliefs, he also sought to utilize Mao’s legacy by calling for a behavioral constraints and political limits. These ideas, if brought to bear, would serve the purpose of negating the modernization program. How do you encourage people to work harder through the creation of incentives if you simultaneously ask them not to gain at the expense of their compatriots, if you promise them material incentives but ask them not to use them.
- incompatibility of incentives and egalitarainism.
Hua decided that the best way for China to achieve economic modernization was to stress the industrial development via the acquisition of foreign technology from Japan and the West. This was an effort to not only industrialize China, but to attract the support of the bureaucrats that had previously championed the cause of Deng Xiaoping. Export earnings from China’s oil industry were to be used to pay for these imports. This also earned Hua the temporary support of the powerful leaders of China’s petroleum industry.
However, the problem with this idea was that China was still a poor country, and was therefore going to find it rather difficult to find the resources to pay for a large scale industrialization of its industrial sector. A number of state of the art Western facilities were imported that were fundamentally incompatible with China’s infrastructure.
- This led to a series of highly publicized disaster.
- Steel Plant and dredging the river
- Electricity and modern plants.
In the first year of the campaign, China experienced a record budget deficit. Oil exports were simply not sufficient to pay for the wide-scale imports, in 1979, China had a budget deficit that was over 15% of its total revenues. The program was seeming to be a failure. It is rather ironic that borrowing from Deng’s ideas cost Hua dearly, this was one of the main nails in his coffin.

In the spring of 1978, Deng advocated going beyond simply trading with the West, he wished to see China learn from the West as well. This was reflective of the broad scope modernizers during the latter part of the 19th and early part of the 20th Centuries. People who wished to see Chinese culture transformed as well an acquisition of foreign technology. Deng also wished to see China transformed, however, and this goal was to remain unstated at the time, he wished to see China shed the vestiges of Maoism to achieve practical growth.
This was part of a general appeal to the intelligentsia. He sought to reverse the anti-intellectual policies of Mao. Mao essentially distrusted practical education, and believed that those who focused on technical expertise as opposed to ideological correctness were somehow tainted - accordingly, he had stressed the emulation of the peasant and the worker as opposed to the scholar or the scientist. Deng instead held up the scholar and the intellectuals as being equally useful to the cause as the worker or the present - to elevate them any higher would have been ideologicaly heresy and gone against not only Mao, but Marx and Lenin as well.
Deng went on to criticize the Gang of Four for their pogrom against China’s intellectuals. He advocated a series of reforms to rebuild China’s educational system: rigorous examinations; a two track system that would favor the establishment of elite schools and universities; sending Chinese students to Western institutions; and creating linkages between Chinese and Western Universities.
Also in 1978, Deng sharpened his attacks against Hua Guofeng and the Whatever faction. Deng criticized those who simply unthinkingly repeated the slogans of Mao instead of following the Great Helmsman’s adage about seeking truth from facts.

Such comrades.... talk about Mao Zedong thought every day, but often forget, abandon, or even oppose Comrade Mao’s fundamental Marxist viewpoint and method of seeking truth from facts... Some people even go further: they maintain that those who seek truth from facts... are guilty of a heinous crime. In essence, their view is that one need only parrot what was said by Marx, Lenin and Comrade Mao Zedong-that it is enough to reproduce their words mechanically...This no minor one.

By employing this tactic of using the Chairman’s words to seek truth from facts, Deng was calling into question many of the givens in Chinese politics over the preceding 10 years, in particular the elevation of Hua Guofeng as his successor - which was the sole source of Hua’s legitimacy.
Interesting in that Deng was attempting to use ideology to defend pragmatism. Explains how seriously Mao’s thoughts and words were taken in China.
Deng had the support of the bureaucrats and the military. Mention the role of Chen Yun. Hua’s support was never very deep and Deng was able to gain support from senior party leaders who had either previously sat on the fence or had supported Hua. Rehabilitation of victims of GPCR and Anti-Rightist campaign gave Deng a fresh well of support.
November work conference of the CCP, party agreed to two initiatives put forward by Deng - to open up to the outside world, and to press ahead with normalization of relations with the United States.

The third plenum of the CC took place in December of 1978 and this confirmed Deng’s victory over Hua Guofeng and the Whatever faction. The plenum rehabilitated most of the remaining victims of Mao’s anti-rightist purges and initiated some rather broad changes to China’s economic direction: an emphasis was placed on reform and rationality. The decentralization of economic planning and the increase in responsibility, where factory managers would be more responsible for their own profits and losses, production was to be based more on demand and some market forces rather than the plan, incentives in the form of rewards for the workers, they would receive bonuses for exceeding the quota. These would be the foundations for the early stages of the modernization campaign. Changes to the political system were also announced, the use of mass campaigns would be ended in the pursuit of political goals. The new emphasis would be on stability and regularized patterns of interaction. This came at a time when the population of China was exhausted after 10 years of the Cultural Revolution, and the chaos of the Great Leap Forward prior to this. China had a population that was terribly tired of political struggle and more interested in economic gain. The people had been asked to make one sacrifice after another during Mao’s time and the reforms enunciated were intended to instill some regularity in the political process and to offer the prospect of tangible improvements in the lives of the ordinary Chinese citizen.
- Hua and his associates were allowed to retain most of their positions for the short term future, but their power was gone.

What Factors Were Responsible For Deng’s Victory ?
- Decision by Hua to arrest the Gang of Four
- Deng’s ability to co-opt Maoist thought in order to strip Hua of the only factor promoting his political legitimacy.
- Hua’s problems with the emphasis on heavy industry and capital investment, yet this did not really become acute until after the issue had been settled. Misgivings existed earlier.

- Support by the military and the bureaucracy for Deng. Recognition of the need for reform and faith in Deng. Personal authority was greater than Hua’s.
- Support of the former victims of the GPCR, who remember Hua’s silence during the GPCR and his actions during qingming affair.
- Support of Hu Yaobang and the YCL - footsoldiers in his seek truth from facts campaign. Hu was rewarded by being made Party Secretary two years later.
- Support by Chen Yun, who was able to assist in the mobilization of the veteran cadres in opposition to the whatever faction. Rather ironic considering how Chen was later seen as the last of the central planners, but he was an early advocate of reform, it was more a question of balance.
- Triumph of pragmatism and cats over dogmatism. Deng once stated that “Engels did not ride on an airplane; Stalin did not wear Dacron”. What this means is that the answer to all of societies problems are not to be found in the old marxist theoriticians and to claim otherwise is silly.
By the end of 1978, Deng had succeeded in rising to power in China - mention the abscence of titles - Hua Guofeng had been emasculated. Question of what direction China’s modernization policy would take at this time.

Deng’s Consolidation of Power - 1978-80

The New Leadership
Three person triumverate of leadership of the CCP with Deng, Chen Yun and Hu Yaobang. Deng paramount leader.

- Developed a series of changes to China’s domestic policy. Brought about by the perceived defects of the economic program initiated by Hua Guofeng. Chen Yun criticized the program for its over investment in heavy industry, with light industry being more or less ignored, and the resulting heavy deficit spending. The emphasis was now to be placed on light industry - this had several advantages: (1) it was less expensive in terms of capital and energy than heavy industry; (2) this could provide goods to satiate the pent up demand of the Chinese consumers, and also inspire them to work harder with the new emphasis on responsibility; (3) the goods could also be produced for export, these exports would help China increase its foreign trade and finance future capital purchases.
The idea of light industry producing consumer goods for export fit very nicely with another innovation of this group in 1979 - the creation of the special economic zone. The SEZ, was, and is, an area where foreign investment is enouraged by tax incentives, increased flexibility in investment. Beyond these governmental inducements, China also offers a very inexpensive source of labour. Four SEZs were created in 1979, three were in Guangdong Province in close proximity to Hong Kong. One of these, Shenzen, sprang from a small collection of villages to become a city of over 1 million people in less than 15 years. Engine of growth for Guangdong Province. The final SEZ was located in Fujian Province, across the straits from Taiwan. These enterprises were establishe to accelerate China’s acquisition of foreign technology.

1979 also saw fundamental changes to the system of agriculture in the PRC. Origins, initially in two provinces (Anhui and Sichuan) of the household responsibility system. In essence what this meant was that the household would become the basic accounting unit - this was de-collectivization. Basically, what would evolve would be a system where the household would be responsible for submitting a certain quota of its production to the state, at state determined prices, while the it was free to sell and profit from any production above the quota. This led to an explosion of growth in the incomes of the Chinese peasants that lasted for the first six years of the modernization program, this growth began to slow after the mid 1980s, but the lifestyles of the peasants had been dramatically changed in this time.
Also, this year saw Zhao Ziyang promoted to the Politburo, from which he would succeed Hua Guofeng as Premier of the State in the following year.

Demands For A Fifth Modernization
As mentioned earlier, one of the key initiatives of Deng Xiaoping was an increased amount of freedom for China’s intellectuals. Not only did Deng seek to elevate their status, but he also wanted their creativity to help the advancement of China. Their support was also quite useful as a means of criticizing Hua Guofeng and the GPCR to assist Deng in his power struggle with Hua. Series of large character wall posters were erected on a street near Tiananmen Square in downtown Beijing. Initially these posters focused on the criticism of Hua, the GPCR and to a lesser degree, Mao. Deng was not entirely displeased with this development, at one stage he even offered his cautious approval. However, the posters soon went beyond what Deng considered to be acceptable, they began to be critical of communist rule and demanded a fifth modernization - Democracy. These wall posters were accompanied by protest movements and people flocking to the cities to petition the government for reforms and changes.

Strong debate within the party over the manner in which to deal with this dissent emerged, Deng, Chen Yun and Hu Yaobang appeared to favor some degree of leniency toward the protestors, but they were not willing to jeapordize the modernization campaign over the issue. By the spring of 1979, a series of directives emerged that limited the space in which the wall posters could be hung and the limits of protest. The leading advocates of democracy were also arrested. Finally, the limits of ideological discourse were set: “All activities in opposition to socialism, in opposition to proletarian dictatorship, in opposition to leadership by the party, or in opposition to Marxism-Leninism-Mao Zedong thought ...are prohibited by law and will be prosecuted.”
In General Deng began to take a much harder line toward dissent in 1979-1980, while he strongly supported economic freedom and allowing for the independence of the people in this realm it was never extended to the political realm. Throughout the last 15 years, the pattern has been relatively similar - political opposition was dealt with harshly. This is reflective of the belief of Deng, and some of the other top leaders, that allowing dissent to blossom will lead to instability at a time when the government craves stability in order to allow the reform program to bear fruit. Also, it is worth remembering that the last time that these leaders saw demonstrations and a relaxation of central authority was during the GPCR, a time that they all remember rather well.
Also, the Chinese invasion of Vietnam in Feb of 1979, 30,000 Chinese casualties in a two week “lesson” opened Deng up to criticism that he did not care for, and gave the democracy types additional ammunition, it was after these criticisms that the crackdown and arrests began in earnest.
End of the career of Hua Guofeng in 1980, his supporters were picked off one by one and removed from positions of power and he eventually surrendered his office in the latter part of the year.
- Deng’s visit of the US in early 1979, visits Rodeo and Disneyland. Display of China’s outward leanings, also a belief that the US gave their support to the Vietnam incursion.

- The year of 1980, saw a number of changes introduced into the Chinese economy. There was a clear recognition that the economic plan constricted the state enterprises and hampered their ability to exercise local initiative. They realized that their factories lagged far behind those of the West. It was proposed that the managers be allowed greater autonomy to hire, reward and fire workers in the name of productivity. The state firms were to be responsible for their own profits and losses, they were expected to behave as though there was a free market - managers were to be given the responsibility for obtaining raw materials and selling their product and were not to be dependent on the state to cover their losses. There was also a cry for the end to the Iron Rice Bowl - the system of job security and welfare in the PRC that sought to meet the needs of the worker from the beginning of his/her career to the end. Explain the concept
These ideas have been partially heeded by the Chinese since that time. They have indeed created some market conditions and increased the autonomy of the mangers; but, the state continues to lay out vast sums of money to subsidize the state firms - one of the real challenges to the reform efforts.
- Allowing Private Enterprises
- TVEs
- No Sin to Get Rich

The End of the Gang of Four
In November of 1980, the Gang of Four finally came to trial.

The trials had been postponed repeatedly, while the CCP sought to gain confessions from the Gang of Four. Total of 10 people tried. There were 24 prosecutors who tried the case in front of 35 judges. Attempt at formal legal trial, but this was not the case in reality, each had been held for much longer than the supposed three month limit for defendants between arrest and trial. The goverment had already made a series of pronouncement about their guilt and many of the judges had themselves been victimized during the GPCR.
They stood accused of masterminding the GPCR and the fraudulent trials within it. They were held responsible for causing the deaths of 34,800 people and the torture, or severe mistreatment on three quarters of a million others. Also, accused of plotting a coup after Mao died.
Jiang Qing refused to confess to her “crimes”. Until the end she contended that the trial and the government were illegitimate, she finally rested her argument by stating that she had acted entirely at Mao’s orders. The only real question was how serious the sentences would be, the outcome having been determined in advance. Jiang and Zhang Chunqiao were each sentenced to death, with the sentences being later (in 1983) commuted to life in prison, while the rest recieved sentences ranging from 16 years to life in prison. Following this trial thousands of people were arrested and accused of guilt during the GPCR. However, the ten (Gang of Four, plus Lin Biao aides) were principally used as the scapegoats and to quell the demands of the people for vengeance. Jiang committed suicide in 1991.
End of GPCR and scapegoats established.

China - 1981-86 Deng’s Victory?

Introduction and Fang Shou

Following the triumph of Deng and his proteges over Hua Guofeng and the forces of whateverism, China entered a five year period of intense change. The efforts of modernization had both their proponents and their opponents, the interplay between the two and the political and economic results will be the subject of this lecture. Neither side was ever able to conclusively defeat the other, and since 1981 the reform program has vacillated between years of openess and extreme economic growth and years where the environment was more constrained and efforts were made to slow the economic growth because of the attendant social and economic problems (inflation, corruption) that it engendered.
Not only were these cycles the results of the factional disputes within the CCP, but even the liberalizers (and especially Deng, who tended to stay above the factional fighting intervening on one side or the other in a decisive manner) were concerned that the rapid social changes were placing society out of their control, this also accounted for the vacillating policy. Each attempt at liberalization was followed by an attempt to regain control, the perspective that Baum offers is that after letting go with one hand (fang) they instintively sought to tighten control with the other (shou). In this idea of the fang/shou cycle, reform was strongest in the even numbered years, and attempts to retake control were assertive in the odd numbered years. For example, following the defeat of the anti spiritual pollution campaign of 1983 (shou) and the temporary set back to the leftist challenge, China embarked on a wide spread campaign of reform in 1984. This year saw 14 cities (including Shanghai, Guangzhou and Tianjin) given the same liberal investment rules as the SEZs. That year also saw the creation of millions of family based urban enterprises and the expansion of the TVEs. The resulting inflation and the development of personal and regional inequalities spawned the retrenchment campaign of the following year. In general, this schizophrenic nature has characterized the reform campaign from its inception.

The dispute between the liberals (reformers) and the conservatives (opponents) has been well documented. In general, during this time there was a collection of leaders who favored the rapid expansion of the modernization campaign (Hu, Zhao) and a collection of leaders that favored a more measured approach to the efforts (Chen Yun, Deng Liqun-Little Deng). Deng Xiaoping stood above the two factions interceding on behalf of one or the other, much like Zeus in the Iliad. However, while this is substanitively accurate it tends to obscure some of the more subtle divisions within the leadership. For example, in 1982 the origins of a conflict between Hu Yaobang and Zhao Ziyang became apparent. The latter was more cautious and favored a larger role for the state enterprises within the campaign. This was important as not only did it reveal that neither side was monolithic, but it also serves as an example of something that we discussed earlier - the personal networks and the idea of institional loyalty. Zhao was the Premier, and the head of the State Council. His support base and allies within the leadership were the Ministers of China’s industry, who favored the larger role for the state as this would allow them to keep their power. True to his insitutional interests, Zhao was favoring a larger role for the state in 1982. In general, this divergence was more of an exception than the rule, by the following year, Zhao and Hu stood together as the leading advocates of reform and collaborated against the leftist efforts to forestall change.
We will now set to examine several features of the time period: the reorganization of the party; corruption; relations with the army; and the issue of spiritual pollution.

1. Party Reorganization

The period marked the beginnings of an effort by Deng and the reformers to try to shed some of the older party veterans and to replace them with younger, more technically educated party members. In 1991, the elders were offered the opportunity to retire from their formal party and state positions, yet they would be able to remain as senior advisors and still retain the perks of the job. Mention the importance of these perks. Not only did the party wish to promote younger members, but also to trim the bloated state bureaucracy. It should be mentioned that by this time, the party leadership was dominated by men in their seventies and eighties, many of whom had been with the party since the long march almost 50 years earlier.

This effort was only partly successful at first, the formal establishment of the CAC at the 12th party congress of 1982 institutionalized the advisory posts and the maintenance of the perks. This party congress did see a number of upper level party changes, but those who were retired were not necessarily the eldest of the party, rather they were the last remnants of the supporters of Hua Guofeng and the whatever faction and the average age of the Politburo members actually increased due to the changes made at this conference.
The first real results of this goal of retiring the old party stalwarts came in 1985, when 64 members of the Central Committee stepped down under pressure and were replaced by younger party members. However, it has been rumored that the carrot that the party promised in exchange for these retirements was high level jobs for their childred in state industry, the princelings begin to become apparent. One of the young members promoted at this time was Li Peng, China’s present Premier, who was a youthful 56 at the time of his promotion.
In general, the efforts to replace the elder leaders of the party has only been partly successful and generally it has required the cooperation of the grim reaper in order to make these changes.

2. Corruption

Corruption is a problem that has plagued the CCP since the inception of the modernization campaign. In the aftermath of the Cultural Revolution a aura of cynicism existed throughout Chinese society and especially throughout the party. The years of sacrifice and political struggle had done little to advance China and the seeming swing of the party toward capitalism left many with pondering the question is what was left to believe in? Also, in the mix of the market and the plan that was taking place in China led to a demand for scarce resources, no longer allocated by the state, and the easiest way to gain this access was to grease a palm or two - guanxi (connections). Again this is a problem that still exists in China in extreme degree - rule of law vs arbitrary enforcement.
The first salvos in the attack on corruption and the exercise of special privelege began in 1981 with the arrest of scores for profitting from these activities. Another anti-corruption campaign in the latter half of 1983 led to the execution of between six and ten thousand lawbreakers. But, perhaps the most spectacular of these cases came with the uncovering of a large scale conspiracy to bring in goods for later resale to the mainland. The conspiritors redirected over $1 billion worth of state funds to buy a conucopia of black market items - among them 89,000 Toyota cars, 16,000 vans, 122,000 motorcycles, 2.9 million television sets, and 252,000 vcrs. This led to a widespread anti-corruption campaign that led to tens of thousands of party expulsions.

One of the other ramifications of the Hainan Island scandal was the involvement of the children of some of the party higher ups. They were slapped on the wrist for their sins, but the drive against corruption would become a political weapon in China. One could target the children or supporters of one’s opponent for involvement - corruption was so widespread that they were likely to be guilty anyway. The former head of the Chinese Navy, Ye Fei, saw his daughter arrested on charges of selling state electronic secrets to foreign concerns. Ye Fei had been an opponent of Hu Yaobang and it was suspected that this arrest was politically motivated. One of the continuing causes of displeasure in China.

3. Relations with the PLA
The relations between the People’s Liberation Army and the modernization efforts have always been somewhat tenuous. On the one hand, the party favors anything that will strengthen the ability of the country to defend itself, but on the other, the placement of the military as the last of the four modernizations, as well as the fact that by the early 1980s, it was simply being called the modernization program, indicating that there were no longer 4 mods and that the military had been removed from this group. The military was very concerned about the shrinking defense budget - though as we shall see later, these cuts have been more than restored and the army has profitted handsomely from the mods.
The first sign that the military was displeased with the new leadership came when Deng became head of the Military Affairs commission at the Sixth Plenum and not Hu Yaobang. The military twice vetoed Deng’s suggestion that Hu become head of the MAC, once in 1981 and again in 1985. They never quite trusted Hu and there was a belief that he lacked the military competence to become de facto chief of the PLA. At one point the military asked for leadership input as to how best handle a militarty crisis with Taiwan, they were horrified to learn that Hu proposed maritime invasion. The reason for their horror is that the ROC had air superiority at that time, and the invasion fleet would have been sitting ducks for the Taiwanese aircrafts. How, they asked, could they trust someone so ignorant of military affairs?

Earlier, I mentioned the arrest on corruption charges of the daughter of the former head of the Chinese navy. Without drawing any conclusions about her guilt or innocence, this was presumed by the military as simply being another example of how Hu was prepared to use his power against the military, by bringing corruption charges against the child of one of their compatriots, they perceived this as an attack on the military as a whole.
In general, the relations between the leadership and the military were rather tenuous, while the military implicitly trusted Deng, it was not prepared to extend this same privelege to his underlings.

4. Spiritual Pollution
The term “spiritual pollution” was introduced in 1983 by Deng Liqun and refers to the unhealthy aspects of the West that are perceived as accompanying the modernization campaign. The opponents of reform class everything from dissent to street crime to corruption as examples of how the modernization campaign is polluting the spirit of China. This plays a large role in the swings of the campaign, at some points, about year out of every two, the opponents of fast paced modernization are able to point to some recent event in China and blame it on Western influences and place the campaign in jeapordy. However, after a few initial defeats, the modernizors are able to regain the initiative during the following year. Accordingly, it is usually in odd numbered years that these campaigns are at their most successful.

The first of the counter-attacks began in 1981, before the term was even coined. A script for a film, which was eventually made, called Unrequitted Love displayed the heroic patriotism of the protagonist, who eventually realizes, that despite his efforts, China does not love him back. The release of this film, coupled with a few others, elicited a firestorm of protests within the CCP. They saw it as fundamentally unpatriotic and deemed it unhealthy for the Chinese people. The conservatives claimed that this and other examples of “bourgeois decadence” was a result of the very nature of the reform program.
Belief that a new hedonistic culture had developed among the young.
By 1983, the conservatives, led by Deng Liqun and supported by Chen Yun, used the idea of spiritual pollution to attack Hu and the entire reform program. Hu and Zhao Ziyang buried their differences of a couple of years earlier and banded together to defend the reforms. Zhao even threatened to resign as state Premier if these attacks were not curtailed, Deng eventually sided with them and the anti-spiritual pollution campaign was shelved, however, the attacks would return in 1985. But in the interim, the urban reform campaign was promoted and the number of the SEZs was expanded. Of course the following year, the attacks on the SEZs mounted and the criticism of “bourgeois speech” intensified. That year, following the failure of the anti-reform effort, Hu Yaobang was able to achieve a short lived victory as Deng Liqun was demoted from the Politburo. Yet, the newly cleared air would not last long as a series of urban and student protests in 1985-86 would lead to Hu Yaobang’s eventual loss of power in early 1987.

Sources of Urban Discontent
Baum identifies three primary sources of the urban discontent of 1985-86.

1. The rise in liberal expression in Chinese literature, art and speech following the dismissal of Deng Liqun as party propaganda chief. With the removal of “little Deng” and the somewhat more tolerant attitudes of his successor, an opportunity was provided for the airing of the discontent that had been rising since the onset of the modernization campaign. As it had been stifled for so long, there was a belief that, by sacking little Deng, the party was indicating its willingness to have these grievances aired. The basis for these grievances was the changes that were taking place in Chinese society and the belief that not all were benefitting equally from the modernizations. Essentially, when ever one converts to a more open economy, there will be some social dislocation and this will prompt complaints - not all will benefit equally, and not all will benefit at the same time, this prompts criticism if the channels of discussion are opened. The catch-22 for the Chinese leadership is that it is torn between allowing this dissent to emerge and potentially damaging the reform efforts (which is what they believe happened in Eastern Europe and the former Soviet Union) or allowing it to build in hopes that future gains will erode it.
The problems with the latter perspective is that unless you want to have continual repression, then the pressure will cause some of the dissent to escape and this will be cited by the opponents of reform as proof of the damages wrought by the reform efforts.
- How much do they want from the West?
- Class Opinions
- What are the sources of the discontent.
2. Inflation and Corruption. For those on fixed incomes, state pensions, even state employees, or students on stipends, were not the primary beneficiaries of the reform program. The inflation that has accompanied the rapid growth has made their lives substantially more difficult. They see the prices of the commodities rise, while their ability to pay for these goods depreciates. More importantly, they see people in the newly created private sector having incomes that vastly exceed their own, cab driver vs a college professor. These emerging inequalities serve the stretch the social fabric to the near breaking point.

Another key complaint of the urban residents was the rise of corruption. They could see the party cadres and the state businessmen getting rich, corruption was ubiquitous and virtually everyone had heard some horror story about a local official or the child of a party member who had gotten away with a crime, this led the students to demand greater party accountability.
3. Rise of Crime. By 1986, the crime rate in urban China had risen dramatically, this led to demands for a greater accountability for the party, as there was a perception that it was the corruption in China that was allowing this crime to go unpunished.
The urbanites contended that the only way to get rid of these problems and cleanse China of the endemic corruption was to make the party and state officials more accountable to the people, that the removal of their special priveleges would allow them to be properly punished when they sinned. By 1986, the constant party campaigns against corruption were inviting cynicism among the people, there was a belief that nothing was really accomplished except the removal of political opponents under the guise of combatting corruption.

The calls for political reform began in the summer of 1986 (an open year), favoring the ideas of increased intellectual freedom - to allow people to speak up against the urban problems; a less pervasive role for the party; and increased accountability for the party officials. At a summer meeting of the Central Party School, cadres were urged to study Western political systems for analysis. Seemed that China was heeding the calls for reform. In late September Hu Yaobang made a speech to the party in which he spoke of the need for widepread political and economic reform and increased freedom of expression, this outraged the party conservatives and Deng Xiaoping came down on the side of the conservatives. This cuts to the basis of Deng, while he favored economic reform, he was and is, deeply skeptical about the potential ramifications of political reform.
By drawing a distinction between his vision and Hu Yaobang’s, Deng placed Hu vulnerable to the criticism of the conservatives whose attacks became more pronounced and the reform program seemed to slow by the latter part of the fall.
The conservatives certainly had a fresh range of targets. Fang Lizhi, a Chinese astrophysicist, since to become China’s preeminent symbol for human rights, delivered a series of lectures on college campuses in 1985 and 1986. These speeches called for increased democracy in China as a means of guaranteeing personal freedom and dealing with the abuses by the party officials.
The core problem is: If China’s reforms depend completely on the moves of our top leaders, China will not become a developed nation... Democracy granted by the leaders is not true democracy. What is the meaning of democracy? Democracy means that each human being has his own rights and that human beings, each exercising his own rights, form our society. Therefore, rights are in the hands of every citizen. They are not given by top leaders of the nation.

Fang later went on to state the unthinkable:

I am here to tell you that the socialist movement, from Marx and Lenin to Stalin and Mao Zedong, has been a failure. I think that complete Westernization is the only way to modernize.

These two provactive pieces are excerpts from speeches that Fang gave on college campuses, and while the students seemed to heartily approve, the leadership, including the liberals were not so enthusiastic. Their anger was increased when a series of protests swept through the Chinese univerisities in December of 1986. Virtually all of the major universities in China saw some form of student protest.
Publicly, the CCP leadership was largely silent until late December, first the party hard liners (the conservatives) and then Deng Xiaoping spoke out opposing the trend toward “bourgeois liberalization”, and offered chilling words promising to oppose future demonstrations. The protests ran out of steam in January and abated. But the protests did secure one unintended aim - the fall of Hu Yaobang.

The Dismissal of Hu Yaobang
The student protests of 1986 gave the conservatives the rope that they needed to hang Hu. Having lost the support of Deng Xiaoping, Hu found few allies in the Politburo or elsewhere in the upper echelons of the Chinese leadership. While, perhaps he had some silent support, few were willing to risk their careers to support him. At a Politburo meeting in mid January of 1987, Hu was removed from his post as General Secretary of the CPSU. Essentially he was cashiered for failing to properly deal with the spiritual pollution of the democracy protests and for creating an environment where such protests were possible. Even Zhao Ziyang was allegedly critical of Hu, though this criticism was muted and was a possible means of securing his own position within the party.

General reaction was not indiscriminate, targets were expelled from the party - Fang Lizhi among them - but in general, Deng had a fear that this would serve as a means for the conservatives to mount a broad based campaign against the modernizations. However, strong efforts were made to limit the collateral damage of the backlash. Zhao Ziyang was promoted to leader of the CCP, in an effort to demonstrate to Western investors that the modernization campaign would continue.

1987-89 From the Fall of Hu to Tienanmen
This time period marked a watershed for the CCP, Deng had dsicarded his first chosed successor, and a man who had smoothed the way to Deng’s ascent to power in Hu Yaobang and China had to attempt to achieve a number of aims simulataneosly: regain the trust of the military in the second rank leaders (ie those after Deng; Deal with the emerging urban unrest in the PRC; attempt to restore the spirit to the modernization campaign; and deal with demands for political reform coming from within and without the Communist party. Obviously, considering the demonstrations in Tienanmen Square in the spring of 1989 and the reprisals launched by the leadership, the CCP was not successful in at least the second and fourth of these challenges. This lecture will focus on how the CCP dealt with these issues in the period up to the the massacre in June of 1989.

1. Party Army Relations

The PLA still was uncomfortable with the second line leaders in the CCP. While the military trusted Deng, it had a great deal of difficulty summoning up the same degree of faith in his successors, the dismissal of Hu Yaobang did little to mollify their concerns, as their was an equal suspicion of Hu Yaobang. At the 13th CCP Congress in October-November of 1987, Deng sought to resign his last remaining formal leadership post - head of the MAC - and turn this over to Zhao. Deng attempted to do this in an effort to place more of a secure foundation to Zhao’s power base, as de facto chief of the military, he would be able to build the support of the military, which would be very useful in any efforts to consolidate power after Deng’s passing. Not that this would have greatly affected Deng’s power in any real way.
Anyway, the PLA showed the same reluctance to accept him that they had displayed toward confirming Hu Yaobang and Deng was forced to withdraw his attempted resignation.

2. Urban Unrest
Inflation problems of the earlier remained in existence in China at this time. The economy was growing at an extremely quick pace, the central government was unable to control the money supply in China, and the ability of China’s industry to produce enough consumer goods to meet the burgeoning demand caused dramatic price increases within urban China. The other relevant factor at this time was Zhao’s attempts to introduce price reforms (more on this later) on non-staple foods (meat, sugar, eggs & vegetables), alcohol and cigarettes. This alone was a spur to inflation, but the rumors that this would spread to other commodities led to the buying and stockpiling of goods in order to avoid the future increases. Tendency of inflation to feed on itself.
Problems of urban China were reflected in survey done in 1987 of 2300 households in 33 Chinese cities. The results of this survey were rather sobering, it revealed that more than two thirds saw their real income as declining, with inflation identified as the culprit.

By 1988, China was facing a number of serious problems in the cities. Firstly, student protests broke out, but were quickly put down on the 12th anniversarry of Qingming, however, they would prove to be more telling the following year. Secondly, the plan by the government to decontrol rents and begin to privatize housing horrified the citizens of urban China who were used to absurdly cheap housing. Thirdly, increased migration from the countryside to the cities, many were those who had formerly been sent down, others were from the poorer interior provinces who had yet to reap the benefits of reform. This created a floating underclass of millions who lived illeagally in the major cities of coastal China (increase in begging, prostitution and petty crime). Finally, the increased autonomy that had been granted to the managers allowed them to lay off redundant workers, while this did not take place at a rate that would have reflected completed economic rationality (Half the labour force is redundant), this does mean that a couple of million people were now out of work. Led to the emergence of labour problems, and tentative attempts at strikes.
In general there was an increase in the crisis of confidence in the CCP. The party had been able to take anything but short swipes at the problems of corruption and the increased uncertainty that the reforms yielded caused a certain degree of mistrust toward the party in the cities.

3. Fang - Shou Cycles
After his promotion to CCP general secretary, Zhao Ziyang took great pains to assure the Chinese people and more importantly, the potential foreign investors that the political crackdowns would not curtail the modernization efforts - in short, that China was still open for business. The clear priority at this time was economics over politics and Deng and Zhao attempted to ensure that the modernization program itself was not placed in any real jeapordy.

After Hu’s fall the conservatives sought to turn the resulting campaign against bourgeois liberalization into a general pogrom against the modernization policy, and in the spring of 1987 a group of conservatives stepped forward to claim that bourgeois liveralism in the economic realm was even more dangerous than bourgeois liberalism in the ideological realm. This galvanized Zhao and Deng into action and they immediatelly put a stop to the campaign against bourgeois liberalism, lest it endanger the modernization program.
At the 13th party Congress, Zhao essentially stated that economics would heretofore take priority of politics in the CCP.
Whatever is conducive to the growth (of the productive forces) is in keeping with the fundamental interests of the people and is therefore needed by socialism and allowed to exist. Conversely, whatever is detrimental to this growth is detrimental to scientific socialism and is therefore not allowed to exist

What is particularly intriguing about this statement is that Zhao was defending market principles as a means of promoting scientific socialism, How can this be justified? Statement that China was in the early stages of socialism and what this meant.
However, no timetable was ever presented to suggest that this was simply a part of the dialectic. Gets to the heart of the inconsistency of the reform program
Zhao had assumed the mantle of the leader of the reform efforts; in March of 1988, he announced a number of policy stances that would have done Hu Yaobang proud. Among them was adocating the breaking of the iron rice bowl and limiting the ability of the managers of the state industries to draw on state resources to meet budgetary shortfalls. He also wished to expand the scope of price reforms, so that state subsidies in this area would be reduced (mention subsidized shelter and food). Finally he called for a development strategy that would enable the coastal provinces to expand the array of benefits that they could provide foreign companies in order to increase China’s foreign investment.

While Zhao had filled the role of the active reformer, he was not without opposition within the CCP. When Zhao moved over to assume the position of the General Secretary of the CCP, his old post of State Premier was filled by Li Peng - who would emerge as the dominant voice amont those who cautioned slower and more controllable economic growth. In general this faction, grandfathered by Chen Yun, sought to limit the scope and pace of structural reform and to preserve a dominant role for the state in the economy. While Zhao had stressed the need to reform and then stabilize the economy, Li favored such reforms only after the economy had been stabilized. In short, he advocated a much slower pace to the reform efforts.

4. Demands for Political Reform
While the emphasis on economic reform was still in existence, the political realm became even more constrained. Not only were Chinese intellectuals subject to tightened security, but the old guard sought to re-establish their position as the last line of defense against policy shifts. While the 13th party congress saw the retirements of nine of the twenty members of the politiburo, including most of the old guard - both Deng and Chen Yun were among this group - the old guard was able to retain its influence in two ways: the first was through the use of proxies in the body - ie men who were loyal to the primary leaders of Deng and Chen Yun; the second was a stipulation put in place that in future the standing committee of the Politburo would have to consult with Deng Xiaoping before taking any important political decisions and would have to consult with Chen Yun before taking any important economic decisions. One can be reasonably certain that this would have occured anyway, but this formalized the decision making path in China. While the concessions of retirement be formally made, the top leaders would retain veto power over the decision making powers of their heirs.

One of the interesting things about this period is that while Hu Yaobang was stripped of his position of head of the CCP, he was allowed to retain his position on the Politburo. This would prove to be important point for the events a year and a half later. The 13th CCP congress also marked the ascent to the Politburo of Jiang Zemin, the present General Secretary of the CCP.
By Autumn of 1988, Zhao’s star was clearly falling. Deng had begun to back away from Zhou’s pet policy of structural economic reform and the de-control of urban commodity prices. The inflation of the summer and the general over-heating of China’s economy led to a belief that the brakes should be applied. Primary power for economic decision making shifted to Li Peng, the emphasis went to slowing down the economy and declaring a two year freeze on consumer prices.
Zhao was unable to attract the support of his most likely allies, China’s intellectuals who favored rapid modernization and complete westernization because his political program saw China emerging as an authoritarian but market driven state. Therefore, Zhao alienated both the liberal intellectuals, who disapproved of his political platform and the economic conservatives who could not support his marketization plans.
During the winter of 1988-89, the liberal intellectuals began anew to press for political reforms, even though there was no longer an ear in the party who wished to hear them. Fang Lizhi and others submitted protests to the government with respect to the treatment of China’s political prisoners and the need for political change. These protests took the form of open letters that were signed by a spate of noted scholars and scientists. Alarmed the gov’t as this was a sign of the possibility of unity among the intellectuals - not a pleasant prospect in the midst of a campaign that was designed to utilize these skills.

Due to the economic and political problems, in March a number of senior party leaders went to Deng and called on him to discard Zhao Ziyang. Deng decided to put the question off until after Gorbachev’s visit in May. Why? Successor roulette, no one capable to replace him, coming conference, perhaps a desire to save Zhao.
Fang and Bush in Feb.
Hu Yaobang died of a heart attack on April 15, 1989. Led to the origins of the China spring.

Factors: Economic Uncertainty,Lack of Political Reform
Corruption, Fang-Shou, Spiritual Pollution.

China: 1989-Present

With the popularity of the student movement, and the brutal fashion in which it was put down, it seems somewhat remarkable that the reform program was able to escape the Tiananmen Square indent more or less unscathed. While there certainly was a backlash within the party, the predictions that this would mean the end of the rule of the C.P. in China proved to be unfounded. Baum offers 7 reasons why this proved to be the case:
Factors Preventing the C.P. From Collapse After Tiananmen

1. Despite the problems, the decade of reform had given most Chinese a stake in the system. As we shall discuss on Friday, while there was some dissatisfaction over the inflation, corruption and other problems, the simple truth was that the reform program had changed the lives of the average Chinese within the ten years after its inception. Especially in rural China, home to 80% of China’s population.
2. Assertion of Party Discipline After June 1 gave the opinion of unity among the leaders. While, as we have seen, the upper leadership was certainly not unified as to how best handle the demonstrations, both Zhao and Chen Yun favored dialogue with the students, and more than 800,000 party members participated in pro-democracy rallies, yet to the general public the divisions in the party leadership were not apparent (Zhao seemed to stand alone) and a rectification campaign took place after the incident to ensure that the party members did not criticize the decision and affirmed the Party’s actions. The p.r. displays and backslapping following the incident demonstrated this apparent unity.
3. Loyalty of the PLA to the civilian command. While the original attempt to take the square failed and there were changes and reassignments within the PLA command following the June incident, the army did follow the civilian command and march on the square. Had there been blanket refusal by the army to fire on the demonstrators, Russia in 1917, Romania, then the party would have lost its ability to govern. Once the party was able to secure the support of army units to fire on Chinese civilians (always a delicate issue), the outcome was ensured.

4. Absence of alternative organizations, unions, etc. One of the things that separates China from Eastern Europe was the lack of organized dissident groups that could serve as alternative organizations to the CC. By the latter part of the Brezhnev period, anything other than overt dissent was more or less tolerated in the Soviet Union and Gorbachev courted the intellectuals as a means of getting his idea of perestroika past a very reluctant party apparatus. However, China lacked any alternative means of organization - in essence it lacked a civil society. Dissent was rather fragmented and could not present a coherent organization under which the opposition forces could form.
5. Schisms within the student movement. As I mentioned when discussing the protests themselves, the students initial seven demands were reduced to two, but in reality virtually every student had a different agenda. All wanted democracy, but few were sure what it meant, it was simply taken to be a panacea that would solve all of China’s problems. Also, the objectives from the outset were never completely clear, were the students seeking a negotiated settlement that would yield limited concessions, or were they more interested in embarassing the government in an effort to prove its illegitimacy. In either event, it was clear that the government was not willing to give any ground and allow the students even a moral victory.
6. Elitism of students who refused to collaborate with the workers until it was too late. As I mentioned earlier, the workers role in the occupation of the square was more or less confined to providing security after it became apparent that the government planned to take some action. We should also remember that the involvement of the workers was something that truly terrified a government that had flashbacks to the solidarity movment in Poland, as well as a general belief in the potential of an organized workforce inherent in Marxism. Yet, due to the elitism of the students, this did not come to be.
7. Fear of chaos. Essential component of Chinese culture and particularily important at this time, with memories of the Cultural revolution still reasonably fresh. The Chinese people had ten years of stability and had seen their lives improve materially for the first time in memory. The fear of the uncertain led many to question the utility of the protests - while the government may have had serious flaws, it was the first government in memory that had actually brought about improvements to the lives of the Chinese people.

Chinese Politics Since Tiananmen

Since Tiananmen, Chinese politics and society has continued the patterns of the reform program illustrated in the decade preceding this period. In general, the reforms and the general opening of the economy has continued, yet they have retained their schizophrenic character and the question of political reform has yet to be addressed.

1. Party Reforms
The collapse of the USSR following the abortive coup of August of 1991, greatly concerned the leadership of the CCP. Gorbachev was now branded as a traitor. Actually this had started when he abolished the monopoly rule of the CPSU in 1990, but intensified after the abolition of the CPSU in 1991. This helped the party hard liners in their efforts to have the events of may/june 1989 classed as a counter-revolutionary rebellion instead of a disturbance, or chaos, or any other milder euphamism.

This also helped in the initiation of a party rectification that followed the events in Tiananmen. This campaign lasted from 1989 to 1992; yet, unlike previous efforts, this did not yield any significant results. Since the correct wind campaign of 1942, the party has conducted campaigns intended to eliminate those who were not seen as being entirely supportive of the objectives of the leadership. While this tactic was more closely identified with Mao, the CCP attempted to use this as a means of ferretting out those who had supported the students. Yet, of the more than 800,000 party cadres that took part in the pro-democracy demonstrations in the spring of 1989, only about 1,200 people lost their party cards. The hardliners in the senior leadership were outraged by the apparent failure of their efforts. There are a couple of inter-related reasons for the failure of this campaign. Firstly, the number of people that sympathized with the students was very large and contained wide elements within Chinese society outside of the senior leadership. To have purged all of those who had some sympathy for the students would have decimated the party. This led to the second explanation, the conspiracy of silence that forestalled any efforts to isolate those who demonstrated public support for the students. The members of the CCP did not turn on each other during these efforts, which enabled the sympathizers to keep their party memberships.
- Changes in China since Mao
- Public condemnations but private sympathy
- Problem that Deng faced in that most of the supporters of reform at the lower ranks also supported the students at least tacitly. Interconnected goals

2. Corruption
Corruption has continued to dog the reform program and is an issue that has simply not gone away in China’s politics. According to opinion polls taken of students in 1990, the largest contributing factors to the student unrest were economic crime, corruption and inequality of opportunity. Accordingly an attempt to gain back public support produced yet another anti-corruption campaign, thie led to the disciplining of almost 3/4 of a million cadres and the expulsion of more than 150k from the party. Yet, this has principally netted the smaller fish, the higher ups have emerged largely unscathed. Now, this may be changing, recently the First Party Secretary of Beijing, Chen Xitong, was expelled from the Politburo on charges of corruption. The government has recently set up a hotline, where citizens can dial in their complaints and accusations, and now contends that 83% of those arrested come from citizens complaints. Nevertheless, this problem is pervasive throughout China.

3. Fang/Shou
Within the CCP from 1989 to this year, the party was marked by a sharp conflict between Deng Xiaoping and Chen Yun. The latter had several personal grievances, ranging from Deng’s imperious manner of rule to his tendency to take sole credit for the modernization program. Chen Yun was an essential part of the coalition that allowed Deng to outmanouvre Hua Guofeng and was one of the early architects of the modernization program. Yet, he felt that he had not been given his proper due.
This personal enmity was coupled with genuine disagreements of how best to pursue the reform program - Chen desired more of a role for the plan and for the state industries, while Deng was an advocate of the marketization policy and the emergence of private emterprise.
The other element in this general dispute was the role of foreign trade (now worth 25% of China’s GDP) and foreign investment, the conservatives have argued, and with some success following Tiananmen and the collapse of the Soviet Union, that the opening of the economy is part of a campaign directed at China which aims at the peaceful evolution of the system away from socialism and toward capitalism. In December of 1991, the SEZs drew the ire of the conservative members of the CAC who sent a letter to the Central Committee stating that the SEZs were capitalist in nature and had become “hotbeds of peaceful evolution”.

Facing this criticism Deng asked Chen Yun to accompany him on a tour of the SEZs in early 1992, so that they could witness first hand the development of these areas. Chen declined the invitation, but Deng went ahead, partly as a means of demonstrating his point that the continued success of the mods were the only thing preventing the CCP from going the way of the CPSU and also partly as a means of recapturing the image of China’s force modernization, an image that had been tarnished by the Tiananmen Square incident. On his trip, Deng gushed at the gains in Guangdong Province - esp. Shenzhen - and the potential of Shanghai. He attributed these successes to preventing the collapse of the CCP and chaos following Tiananmen. While there was some initial opposition to Deng’s praise of the SEZs, the liberals were able to overcome this and were able to gain the support of the fence sitters, and isolate the conservatives. In general, the Liberals were able to carry the day in 1992 and China’s push for the increasing vitality of the SEZs had continued.
- Importance of Shanhai and Pudong.
The 14th Party Congress of 1992 confirmed Deng’s assessment of the SEZs and the general fast paced scale of the modernization program. This conference also saw personell changes take place in the party with more younger technocrats assuming leadership positions. While these were not the supporters of Zhao Ziyang, who were dropped from the leadership roles, they were generally committed to reform. On the other hand, the conservatives suffered greatly, with the loss of many of their members. In general, the party leadership was now largely either pro-reform or centrist in their orientations, which greatly assisted the reform program. The other development of note was the abolishment of the CAC, this body had supposedly reccomended this move itself, and the deaths of four of its members further weakened the body. This did not mean that their influence was over, the personal ties still guarenteed access, but the formal body was gone.

In general these changes did not mean that all opposition to reform had been eliminated, far from it, the problems will still cause the occasional backlash, but the conservative forces have been greatly weakened over the past years. Li Peng is hated by the Chinese people and Chen Yun’s passing last summer removes its most powerful advocate.

- Failure of rectification campaign, emergence of traditional values in the countryside, corruption, and ability to smuggle out the student leaders. These signs seem to indicate that the Party has lost a great deal of its moral legitimacy. Yet, we should not assume that it will dry up and blow away. There is still no visible alternative to its rule other than some sort of authoritarian gov’t, the key will be the succession question.

The Chinese Modernization Program
Four Modernizations

- Pragmatic Gradualism
- Marketization
- Privatization
- Outward Orientation - Foreign Trade & Investment
- Political Control by CCP
1. The Military
- Size of the PLA was reduced
- Streamlined - emphasis on technical proficiency - expert over red
- Professional rather than political; questioned the idea of "people's war"
- Vietnam (1979) - China gets a bloody nose
- Least emphasized of the modernizations - limited investment although the army has become active in weapons sales
2. Science and Technology

- Openess to Western Thought
- Journals
- Exchanges: Chinese Students in US
- Expert
- Restore damage of GPCR
- Intellectuals were also used early on to discredit the efforts of previous gov'ts
3. Industry
- Western Capital
- Initially Heavy
- Baoshan
- State Industry to become more accountible; the managers were forced to look at the bottom line rather than meeting a quota.
- Incentives to workers
- They were also forced to employ different means to acquire inputs, more than 85% of industrial capital goods now fall outside of the plan.
- Role of state industries has also declined. In 1978, industrial output by state owned industries was 90% of the total, now over 1/2 is produced by non-state owned companies, 25% by 2000.
- However, these entities still employ 70% of China's urban workforce and have not become as efficient as the emerging private industries; a vast majority of them lose money and almost 1/2 of the state revenue goes out in subsidies. Quandry for CCP leaders - cash drain or major dislocation of workers.

- Private Forces, emerging - Consumer goods - role of light industry - energy and investment are cheap
- Intially Small/later large
- Western Capital
- Special Economic Zones
- Taxes, Profits
- Emergence of Regional and Sectoral Inequality
- Phenomenal Growth
4. Agriculture
- Breakup of Communes
- Responsibility System
- Quotas
- At this time, 90% of farm produce falls outside of the plan
- Private Plots
- One Child
- Pass On - Do not destroy soil
- Agricultural output has grown at an average rate of 10.8% per year between 1978 and 1976
- Support for Reforms, 80% of China's population is rural
5. A Fifth Modernization
- Democracy
- Unlike Soviets and E.Europe reforms were economic in origin
- Deliver the goods why reform?

- Limits on what dissent is allowed
- Tienanmen - No Surprise - GPCR
- E. Europe scared them
- Spiritual pollution
- Chinese do not see connection between market & democracy

Benefits of Reform
1. Material Welfare - China is still very poor, but it is gaining ground rapidly. By 2002, the economy will be 8X larger than it was in 1978.
2. Quality of Life
Urban Households/Hundred
1978 1992
TVs 1 70
Washers 6 80
Fridges .2 50

3. Industrial and Agricultural Output - annual increase in io for last several years has been in excess of 20%, agriculture has grown at a rate of 4%.
4. Household Savings - 100 billion yuan in 1982 to 1,500 billion yuan in 1993.
5. Foreign Trade - 1978 - 20.6 billion yuan; 1993 - 200 billion Yuan
6. Foreign Investment - FDI - 300 million Yuan yearly between 79-82 from virtually nil; 1993 - 25.8 billion yuan. China is currently first among developing nations as a recipient of FDI, worldwide it is second only to the United States.


1. Inflation - 20% annual - rough control
2. Cycles of Expansion and Contraction
3. Unemployment - Open, disguised and potential
- 1/2 pop is under 24
- Floating pop of between 60-100 million
- If privatization of state industries occurs, it is estimated that between 35-40 million workers will be out of work - out of danwei
4. Growing income and wealth disparities
- regional, personal, enterprises
5. Budgetary Defecits
6. Corruption & Crime
7. Political Uncertainties
(i) while authoritarianism has worked elsewhere it depends on the character and calibre of gov'ts
(ii) Succession
(iii) Regionalism - South China
(iv) External Relations