China Since Mao Zedong

1. China Since Mao Zedong Kevin J. Benoy

2. Hua Kuafeng • Mao’s successor was a little known party functionary. • He sought a middle path – somewhere between the leftist inclinations of Mao and those who wanted greater economic freedom – people like Deng Xiaoping.

3. Hua Guofeng • The official story, though apocryphal, is that just before he died in 1976, Mao said “with you in charge of business I can relax.” • Nobody else was present, but the story became legendary and was publicized in posters.

4. Power Struggle • Even before Mao died, his Party was rent with the succession struggle. • Led by radical leftist Jiang Qing (Mao’s wife), the Gang of Four sought radical egalitarian policies. • Moderates, led by Deng Xiaoping, wanted to restore some market-driven economic activity.

5. Power Struggle • Zhou Enlai’s 1976 memorial service became the focal point of protest against the policies of party radicals. • Wreaths were removed in April and riots followed. • Deng was arrested, as he had been during the Cultural Revolution. • However, the army, fearing a return to the chaos of the Cultural Revolution, threw their weight behind more moderate HuaGuofeng. • Mao’s death in the same year resulted in a seemingly smooth succession.

6. Power Struggle • The Gang of Four were attacked and in what might be described as a coup d’etat, were arrested and given show trials. • The verdict was never in doubt. All were convicted, though none were ultimately executed.

7. Power Struggle • Hua announced the Four Modernizations, insisting on reforms to agriculture, industry, science and technology, which would make China a powerful country by the year 2000. • Such policies had been enunciated by Zhou Enlai, but were central to the ideas of Deng’s reformers.

8. Power Struggle • On the other hand, Hua’s proclamation of the Two Whatevers – “We will resuolutely uphold whatever policy decisions Chairman Mao made and unswervingly follow whatever instructions Mao gave” seemed to contradict the Four Modernizations. • Hua was trying desperately to find a balance. • However, Hua faced criticism for his handling of the 1976 demonstrations. • The 1976-79 Democracy Wall Movement, which denounced the excesses of the Cultural Revolution also undermined Hua.

9. Power Struggle • In 1980 Hua lost his position as head of the CCP and was replaced by HuYaobang – a protege of Deng. • Within another year Hua lost his position of Party Vice-Chairman when the post was abolished. • Although he held no official high government position, Deng Xiaoping was the effective ruler – the Paramount leader of China.

10. Deng’s Reforms • Deng was committed to change, reversing the leftist economics of the late Mao era. • The Communes were dismantled and replaced with the Household Responsibility System for farm families – each household paid a portion of its produce to the state and could keep or sell the surplus – GaigeKaifang – “reform and opening up.”

11. Deng’s Reforms • Long term leases effectively privatized agricultural land ownership. • Entrepreneurship was encouraged. • Foreigners could participate in joint ventures with Chinese companies – and eventually wholly own Chinese companies under Chinese regulations in special economic zones.

12. Deng’s Reforms • Foreigners still faced significant problems working in an economy not used to competition – but they salivated over the possibilities presented by a market consisting of almost a quarter of the human race. • Would early involvement result in record profits?

13. Deng’s Reforms • As Deng said: “what does it matter if a cat is black or white, so long as it catches mice.” • Economic growth was the goal and the means of arriving at it was subordinated. • This was like the old Soviet NEP, but with far more restrictions removed.

14. Deng’s Reforms • When Hong Kong was returned to China in 1997, considerable business expertise came with it – along with strong international connections. • In addition, Taiwanese businessmen saw huge potential in China and these Mandarin speakers jumped in.

15. Military Reforms • The stress on economic growth brought changes to China’s military. • The weakness of a force relying on quantity, rather than quality, was apparent in the 1979 border war with Vietnam. • The roots of the conflict lay in the Sino-Soviet split and Vietnam’s choosing Soviet, rather than Chinese, clientship.

16. Military Reforms. • Furthermore, Vietnam intervened in Cambodia to end the genocidal acts of the Khmer Rouge – who were Chinese clients. • Speaking to American President Carter, Deng Xiaoping said: ``children are not listening, it is time they be spanked. • 200,000 Chinese troops invaded Vietnam. • Despite their huge numerical advantage, the Vietnamese blunted the attack and inflicted heavy Chinese casualties.

17. Military Reforms • The experience led China to embark on modernizations. Huge numbers and old equipment were not enough. • Large numbers were cut from the armed forces and more resources went into technological updates. • This involved international purchases and improved home-grown technology. • The success of Western arms in the Gulf Wars confirmed China`s belief that quality must be stressed over quantity.

18. Military Reforms • China took advantage of Russia`s need for cash in the 1990`s, buying the latest generation Soviet aircraft. • They also upgraded their navy to build a true blue-water capability to project power offshore. • In 2010, China unveiled a home-made stealth fighter.

19. Freeing the Economy • Before liberalization in 1979, economic growth rates were a respectable 5.3% annually. • Since then, astonishing 10% growth rates have been more common. • Even the terrible global downturn of 2008 only reduced growth to 9.6% -- a drop from 14.2% the previous year.

20. Freeing the Economy • Since reforms began, China’s economy doubled in size every 7 years – a rate paralleling and surpassing Japan’s Jimmu Boom. • At the time of writing (2013) China’s economy ranks 2nd in the world and is poised to surpass the USA around 2020 in terms of purchasing power parity.

21. Freeing the Economy • More importantly this growth came without surrendering control to foreign companies. • Investment was enormous but China continues to control its major industries and financial sectors. • China is the largest recipient of foreign investment and holds the second largest foreign exchange reserve in the world -- $1 trillion in 2006. • It is now the world’s manufacturing heart.

22. Freeing the Economy • China is now increasingly investing in global resources – African minerals and Canadian carbon products – with government owned corporations doing the investing to meet Chinese national needs.

23. Domestic Affairs • Part of China now exhibits European levels of prosperity – especially Shanghai. • In 1978 China was one of the poorest countries, with per capita GDP about 1/40th of that of the USA. • Today is around 1/5th.

24. Domestic Affairs • Such growth has not occurred without stress. • Agriculture’s share of the workforce dropped from 69% to 50% in the first 6 years of reform as people moved to town and village enterprises. • Urban growth followed, but government restrictions on personal mobility prevented the growth of slums as happened in other countries.

25. Domestic Affairs • In 2011 about 40% of China’s population was urban. • Another 350 million people will live in cities by 2025. • In 1980 there were no skyscrapers in Shanghai; in 2011 there were twice as many as in New York. • The Chinese call it “Tan da bing” – the spreading pancake – urban sprawl.

26. Domestic Affairs • However, the Chinese are well aware of the problems of rapid urbanization and are trying harder than most countries to use green technologies and invest in public transportation. • Even so, the rapid growth has led to terrible pollution from the use of coal.

27. Domestic Affairs • Development has created two Chinas – the prosperous cities of the East and the largely poor rural rest. • Until 1994 the state had a policy of “reform without losers,” where unprofitable state enterprises were propped up to keep employment stable – the “iron rice bowl” as the Chinese referred to it. • After 1995 this was abandoned and bankruptcies increased. • State employment dropped from 17% to 12% of the workforce. • Productivity rose, but so too did the risk of social dislocation if growth did not continue. • Explosive economic growth occurred elsewhere in the world – though never on this scale. • A slowdown must be inevitable. Some political change is also needed for growth to continue. • Rule of Law must exist and corruption must be reduced if investment is to continue. • The global consequences of social breakdown in China are terrible to contemplate.

28. Political Affairs • The Chinese largely accepted economic growth and improved lifestyles as compensation for lack of political freedom. • True, there was a strong democracy movement in Hong Kong since it rejoined China in 1997 – but meaningful gains have been few.

29. Political Affairs • For a brief time, in the heady days of Gorbachev led reforms in Europe, students took to the streets of China too – in the Spring of 1989. • As in Eastern Europe, it looked as though political change might come. • Demonstrators even occupied the heart of Beijing – Tienanmen Square, starting in April.

30. Political Affairs • The death of reformer Hu Yaobang served as the trigger for events. • The causes were high inflation, party corruption and a lack of democracy in China. • At first the government did little – until sympathy demonstrations erupted around the country. • Divisions in the party leadership were overcome and Deng and his supporters cracked down.

31. Political Affairs • On May 20, Martial Law was declared. • After a false start, in which local troops were reluctant to attack, new forces were brought in from the countryside and a bloody suppression ensued. • Hundreds, perhaps thousands, died and were injured.

32. Political Affairs • Tanks and armoured personnel carriers crashed through makeshift barricades. • Live ammunition was fired. • On the night of June 3-4 it was clear that China’s economic liberalization would not be followed by political freedom.

33. Foreign Relations • The Tienanmen Square Massacre was a public relations disaster for China – but it did not disrupt economic growth. • Curiously it may have helped. • Foreign investors saw that workforce discipline would be maintained by the government. • Labour disputes were as unlikely as political demonstrations following the crackdown.

34. Foreign Relations • China/Vietnam relations remain tense – mainly over control of offshore resources in the South China Sea. • This conflict involves other regional competitors too – the Philippines, Malaysia, and even Japan. • The ongoing issue of Chinese sovereignty over Taiwan is another challenge to regional and global peace.

35. The Future • Chinese citizens have traded freedom for increasing prosperity. Will this continue? • Even in good times there have been protests about corrupt officials and human rights abuses. Does this hint at bigger trouble to come? • Chinese workers toil longer hours for less pay than their Western counterparts. Will they continue to do so?

36. The Future • Can the government continue to manage the high rate of urbanization? • Can it replace polluting old industries with greener alternatives – before doing irreparable harm to nature?

37. The Future • The legacy of the One Child Policy in China is an oddly unbalanced population. • There are far more males than females – and brought up in families that dote on these little emperors, one wonders whether the Confucian work ethic will continue in China. Military analysts worry if they have the toughness needed to be effective soldiers. • In addition, China has an aging population.

38. The Future • Though China has developed a moderate ability to project power overseas, it still lacks anything remotely close to America’s capabilities. • China’s military spending is still under 1/3 of what the US spends. • Can China ensure that globally sourced resources are maintained without the military capacity that guaranteed such supplies to the US? • The future of China remains an enigma

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